Treatment of income from rental property

I have a client who has moved to this area to receive family support.  She has severe depression and this move was to avoid hospitalisation.  Had been receiving ESA previously but new claim took into account rental income from property as income and so not paying her anything.  -This property was part of a settlement on divorce, which she has not lived in but has rented it to her elderly parents for many years.  Has been granted LHA using rental income but offsetting with mortgage payments so is getting part help towards rent.  I have contacted a specialist welfare benefits support service but the information is contradictory.

What I want to know is how should the rental income be treated for her ESA? Is it being correctly treated for her LHA?

Does anybody have any wisdom or experience of similar?

Thanks

Not sure what you mean about offsetting the mortgage payments against the rent.  Her parents would be the ones claiming Housing Benefit, presumably at the LHA rate.

As far as the income from the rental is concerned, I don’t see how the fact that the property is rented to elderly parents could stop the rent being counted in full as income for income-based ESA.  It seems unlikely it could fit the criteria to be disregarded.

Sorry!

It’s quite possible to not be entitled to income based ESA but still be entitled to part HB - it depends how much income she has left from the rent once the amount for the mortgage is taken off.

Rental income counts but only after any mortgage payments on the property offset, assuming the capital value of the property is disregarded because it is occupied by a relative aged 60+. Para.23(2) Sch.8 ESA Regs.

Richard Atkinson