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Income from subletting farmland
We’ve got a bit of a stinker of a case and wondering what other people thought about this one. We have couple over SPA, currently receiving Pension Credit Savings Credit but no Guarantee Credit, savings ~£35l.
They live on a large farm, paying £8k a month for house and land. Lived their since 1977. They let out some of the other farmland and receive £4k a month in return. They say their portion of the £8k for the farmhouse is approximately £2,400 a month, so the other £5,600 is for the land and other buildings.
How is this income treated for PC and for HB is the question we’re getting confused on? For HB, reg.12B(3) seems clear that it’s only the £2,400 a month that is eligible for consideration as relevant rent
(3) Where the payments specified in regulation 12(1) are payable in respect of accommodation which consists partly of residential accommodation and partly of other accommodation, only such proportion of those payments as is referable to the residential accommodation shall count as eligible rent for the purposes of these Regulations.
Further, reg.29(v)(iii) deals with the £4k they receive:
Meaning of “income”
29.—(1) For the purposes of these Regulations, “income” means income of any of the following descriptions—
(v)any payment of rent made to a claimant who—
(i)owns the freehold or leasehold interest in any property or is a tenant of any property;
(ii)occupies part of the property; and
(iii)has an agreement with another person allowing that person to occupy that property on payment of rent
So far, so good. However, with respect to PC, we can’t see anything that covers the income from the subletting of the land so we’re assuming it is disregarded? P.449 of CPAG states rent from a property other than your home is not taken into account as income but instead the value of the property generates tariff income. As they don’t own the property, this means no income as such then.
However, we then have reg.29(v) which holds that:
v)any payment of rent made to a claimant who—
(i)owns the freehold or leasehold interest in any property or is a tenant of any property;
(ii)occupies part of the property; and
(iii)has an agreement with another person allowing that person to occupy that property on payment of rent;
So rent payment is treated as income and taken into account. However, that seems to be also based on the claimant and the other person occupying the same property - which isn’t really the case here, given we’ve already apportioned the rent as above and it’s other land they’re letting out.
Any thoughts on this, we’ve been going around in circles a bit? Thanks all.
Are the DWP aware of the income? Should be fine if that’s the case.
See regulation 27 “Calculation of claimant’s income and capital in savings credit only cases”
(1) In determining the income and capital of a claimant who has, or whose partner has, an award of state pension credit comprising only the savings credit, the relevant authority shall, subject to the following provisions of this regulation, use the calculation or estimate of the claimant´s or, as the case may be, the claimant´s partner´s income and capital made by the Secretary of State for the purpose of determining that award.
4) The relevant authority shall modify the amount of the net income provided by the Secretary of State only in so far as necessary to take into account—
(a) the amount of the savings credit payable;
(b) in respect of any dependent children of the claimant, childcare charges taken into account under regulation 30(1)(c) (calculation of income on a weekly basis);
(c) the higher amount disregarded under these Regulations in respect of—
(i) lone parent´s earnings;
(ii) payments of maintenance, whether under a court order or not, which is made or due to be made by—
(aa) the claimant´s former partner, or the claimant´s partner´s former partner; or
(bb) the parent of a child or young person where that child or young person is a member of the claimant´s family except where that parent is the claimant or the claimant´s partner;
(d) any amount to be disregarded by virtue of paragraph 5A or 9(1) of Schedule 4;
(e) the income and capital of any partner of the claimant who is treated as a member of the claimant´s household under regulation 21 (circumstances in which a person is to be treated as being or not being a member of the household) to the extent that it is not taken into account in determining the net income of the person claiming state pension credit;
(f) regulation 24 (circumstances in which income of a non-dependent is to be treated as claimant´s), if the relevant authority determines that this provision applies in the claimant´s case;
(g) any modification under section 134(8) of the Administration Act (modifications by resolution of an authority) which is applicable in the claimant´s case
5) Regulations 29 to 49 shall not apply to the amount of the net income to be taken into account by the local authority under paragraph (1), but shall apply (so far as relevant) for the purpose of determining any modifications which fall to be made to that amount under paragraph (4).
Thanks for that, well spotted. That does seem to clear up some of the possible discrepancies here.
If PC claim is SC only then there is no direct link to HB, so will the capital not be an issue, if over £16k, I think the post says £35k?
If PC claim is SC only then there is no direct link to HB, so will the capital not be an issue, if over £16k, I think the post says £35k?
Good point. This one certainly confused us.
Have to say I just assumed the DWP were already aware of the savings? Reg 27 again says how this will apply, so as you have the details you will know if this affects anything.
(6) The relevant authority shall for the purpose of determining the claimant´s entitlement of housing benefit use, except where paragraphs (7) and (8) apply, the calculation of the claimant´s capital made by the Secretary of State, and shall in particular apply the provisions of regulation 43 if the claimant´s capital is calculated as being in excess of £16,000.
(7) If paragraph (8) applies, the relevant authority shall calculate the claimant´s capital in accordance with regulations 43 to 49 below.
(8) This paragraph applies if—
(a) the Secretary of State notifies the relevant authority that the claimant´s capital has been determined as being £16,000 or less;
(b) subsequent to that determination the claimant´s capital rises to more than £16,000; and
(c) the increase occurs whilst there is in force an assessed income period within the meaning of sections 6 and 9 of the State Pension Credit Act.
Thanks.
The outstanding thing that is puzzling is related to the £4k and the PC entitlement. Can’t see whether it should be taken into account or not - assuming not given the PC Savings entitlement but we’ve not seen any entitlement letters so not sure.