Martin Williams

Martin

The CPAG book says that the £20 plus 50% excess rule for boarders applies where the boarder is not a close relative.  However, there is no mention of close relative in the relevant provision, para 8, schedule 4 of the PC Regs.  Can you (or anyone) enlighten me please?

Thanks

Its in the definition of “board an lodging accomodation” in reg 1: “but not accomodation provided by a close relative of his or his partner, or other than on a commercial basis”.

Thanks Damian

My client gets HB and GPC.  Currently has a boarder under a commercial agreement and The Pension Service and LA currently disregard first £20 of the rent and 50% of the rest.  So far so good.  She plans to end the agreement and set up a new one with her daughter on the same terms.  Daughter working (good wage) so will not be claiming HB, so no issues there.  For PC, CPAG’s view is that the payments made to the claimant are ignored and for HB, the first £20 and 50% of the rest would be ignored.  What do you think?

Hi nevip.

Thanks for naming this thread after me….

I haven’t had a chance to think about this yet - will try and do so Monday but I am sure you are right (because you usually are and not because I have checked anything).

I think that the thinking would be as follows. Reg 15 lists all the income that counts for SPC. Board and lodging are on the list but since payments from close relatives aren’t within the definition of board and lodging payments (in reg 1) then these are not counted as income under that bit of reg 15 and are therefore disregarded. The one thing I am not clear of is why, if it doesn’t fall within the definition of board and lodging payment, it wouldn’t count as rent under 15(5)(i). I can’t see any definition of rent. There probably is a good reason but its Monday morning and my brain takes time to warm up. By Friday it is burnt out so there is really just a short spell in the middle of the week when I have to do all my thinking.

nevip - 19 April 2013 12:00 PM

Thanks Damian

My client gets HB and GPC.  Currently has a boarder under a commercial agreement and The Pension Service and LA currently disregard first £20 of the rent and 50% of the rest.  So far so good.  She plans to end the agreement and set up a new one with her daughter on the same terms.  Daughter working (good wage) so will not be claiming HB, so no issues there.  For PC, CPAG’s view is that the payments made to the claimant are ignored and for HB, the first £20 and 50% of the rest would be ignored.  What do you think?

I may be missing something, but I can’t see why the HB is affected (whether commercial agreement or not) if the person qualifies for guarantee pension credit, as if the person qualifies for guarantee pension credit, the whole of his income (and capital) is disregarded (reg 26)

Regards

Brian

The LA might take the view that the daughter is a non-dependant on the basis that her rent liability would be caught by HB Reg 9(1) if she were a claimant herself.  The issue would be whether or not that part of the definition of non-dependant in HB(SPC) Reg 3 applies irrespective of whether the non-dep has actually claimed HB: can HB Reg 9 only apply when there is a claim for it to bite on?  That raises an interesting point of law.  If the Council does regard her as a non-dep, they will slap on a deduction based on her wages.

For the sake of consistency, the LA and DWP ought to take the same view.  The drafting is not as clear as it could be, but I think the description of “rent” in SPC Reg 15 is intended to cover arrangements where meals are not provided: it is the flip side of board and lodging payments.  I think the intention is that payments from a boarder are either counted as income under that heading, or ignored (and instead there might be a non-dep deduction from the claimant’s HB or SPC housing costs).

The options seem to be:

- non-dep in both SPC and HB (which I think is probably right)
- rent income for SPC and therefore no effect on HB if claimant gets GC (which may be right)
- rent income for SPC and non-dep for HB (harshest outcome and surely not right)
- non-dep for SPC and rent income for HB, but no effect on HB if GC awarded (which would be nice but just as incorrect as the converse)

Thanks people

My advice to my client will be guarded, obviously.  For PC the payments are either rent and are caught under reg 15(5)(i), or are income from capital and thus ignored.  If the latter my client will therefore get GPC.  If the payments are taken into account she will come off GPC due to her SRP.  If she gets GPC she should, as has been pointed out, get full HB as her income should be ignored.  However, in that case, I think the LA will apply a ND deduction which in her case will be about the same as the rent charged.  However, having the payments disregarded in her PC will probably make her better off than she is now.

If the payments are rent for PC, then they will probably still be treated as board and lodging payments for HB.  As her GPC is about £6 then she will be marginally worse off than now.  I think she could probably live with that, particularly as her daughter would probably help her out when the need arises.

The question of whether HB reg 9(1) allows for a NDD is a good one as a matter of law and I had considered that in a slightly different context but, yes, it does require clarification.

- non-dep in both SPC and HB (which I think is probably right)

LA Would see her as a non-dependent definitely and the reg 15 (spc)doesn’t have a knock on effect, well that’s my experience

The daughter will not be a boarder quite simply for the reason that she is their daughter and will therefore be classed as a non dependent with the appropriate non dependent charge depending on her gross earnings.

If the rental agreement was on a commercial basis even if she is their daughter then she should be classed as a boarder.  However the LA would have to be persuaded that the mother was letting this room to her daughter on a commercial basis.  If the LA were presented with this scenario, without any further evidence, it would be something that they would be likely to refer to the Tribunal Service.

The fundamental question for PC is whether the income is disregarded as income from capital or taken into account as rent under 15(5)(i).  The fact that the daughter can be classed as a ND under paras 1(4) and (6) of schedule 2 of the PC Regs is, in itself, neither here nor there as there are no PC housing costs to make a deduction from.  The second fundamental question is whether HB reg 9 bites to treat the daughter as not liable to make payments in respect of the dwelling thus disapplying HB reg 3(2)(e) and making her a ND.  These are crucial as to how much the DWP/LA can deduct from her PC/HB.

Those are the two questions where any dispute is going to lie. If it comes to it I will argue that for PC the income should be ignored as income from capital (also CPAG’s view) but I’ll probably concede that HB reg 9 does apply as it uses the word person rather than claimant and I’m sure commissioners have given that word wide interpretation in similar cases in the past, albeit for other purposes.  I’m re-enforced in that view of the HB scheme as HB reg 3 does not use the phrase “close relative” like the PC/IS Regs do.  The phrase “close relative” can be found in HB reg 9(1)(3).  Thus, the equivalent HB purpose can, consequently, be found there.