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Lodgers and UC
I’m trying to pull together some information for tenants on how lodgers will be treated for Universal Credit.
From the new draft regs, a room is not allowed for any person that is liable to make payments on a commercial basis - so a deduction would be made from the tenant’s housing costs for under occupation.
From the previous briefing note, it was suggested that income from a lodger would be treated as earnings, and subject to a 65% taper.
However the draft regs don’t appear to mention income from lodgers at all - so not clear if treated as earnings, self-employed earnings (where maybe some disregards for expenses might be deducted first) or unearned income.
As it was repeatedly suggested that under occupying social housing tenants take in a lodger whilst the Bill was going through Parliament, it would be useful to know how this would affect their income.
Does anyone have any other information?
Thanks
JK
From the new draft regs, a room is not allowed for any person that is liable to make payments on a commercial basis - so a deduction would be made from the tenant’s housing costs for under occupation.
No, look in Sch. 4 (Ho8S), 11,2(d)
“A person who is liable to make payments….”
From the previous briefing note, it was suggested that income from a lodger would be treated as earnings, and subject to a 65% taper.
However the draft regs don’t appear to mention income from lodgers at all - so not clear if treated as earnings, self-employed earnings (where maybe some disregards for expenses might be deducted first) or unearned income.
Other income gets pointed to ITTOIA 2005, although there some non-taxable letting schemes, but no earnings disregards to be seen, as you say. I’d guess that they are yet to appear.
Sorry Gareth - I’m getting confused -
Para 11 (1)- the members of a renter’s extended benefit unit are -
(c)...any person who is a non-dependant
(2) A person is a non-dependant ....if they are none of the following:
(d) a person who is liable to make payments on a commercial basis
12 (1) A renter is entitled to one bedroom for each of the following descriptions of their extended benefit unit
I interpret this as - a lodger is liable to make payments on a commercial basis, so is not a non-dependant, so is not part of the renter’s extended benefit unit - so is not entitled to be allocated a room.
Am I reading this wrong?
No, I am.
For some reason when I pasted that from my notes I replaced ‘none’ with ‘one’.
I’m now going back to check the rest of my copying macros.
I’d be interested in comments on how people think lodgers who get meals are treated. What is the deduction for meals? It looks like the actual cost, which may be more than the personal allowance
I think there’s more to come Chris.
Actual cost would be a little too difficult to administer, especially for a non-local DM.
Foie Gras on toast today, baked beans tomorrow.
I looked up part 5 of ITTOIA. As far as I can see it is a sweeping-up section and doesn’t include income from lettings. Rent-a-room relief is dealt with in part 7 of ITTOIA. The issue of whether letting a room is self-employment for UC purposes is another question (which I will ask).