Treatment of Lodger Income for SMI

I know that under UC, income from lodgers is disregarded as income but if the client applies for SMI under UC, is the lodger income treated as earnings thus precluding the housing costs amount from being paid?

LMI not SMI now.  The usual UC calculation applies when considering eligibility for a loan, whether with UC or without UC but where UC would have been payable with SMI.

Thank you for that, it’s more the definition of earnings ie. earnings in any assessment period preclude payment of housing costs in that period. Does lodger income count as earned income thus precluding payment or does it count as unearned income thus permitting payment of housing costs?  I would say it’s unearned income but not 100% sure.

The LMI regs define earned income as

““earned income” has the meaning given in Chapter 2 of Part 6 of the UC Regulations;”

That’s what’s used to exclude eligibility for a loan

“(4) A UC claimant shall not be eligible for the offer of loan payments if—

  (a) where the claimant is a single person, the claimant has any earned income; or

  (b) where the claimant is a member of a couple, either member of the couple has any earned
      income.”

Chapter 2 of Part 6 of the UC regs starts at Reg. 51 and runs to Reg. 64.

Reg. 52 says

“Meaning of “earned income”
52. “Earned income” means–
(a) the remuneration or profits derived from–
(i) employment under a contract of service or in an office, including elective
office,
(ii) a trade, profession or vocation, or
(iii) any other paid work; or
(b) any income treated as earned income in accordance with this Chapter.”

I can’t see any treatment which would apply to a lodger’s payments.

Many thanks for that., Gareth.