Landlord claiming Council Tax Benefit – Friday puzzler

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    Mr x has let a four-bedroom property for £2000 per month. He sublets to three other tenants and they cover the full liability so he has not claimed HB. He is in receipt of JSA and has now claimed CTB. His is the only name on the account.

    This one is puzzling me. I can see nothing wrong with the sole name on the account, Mr x appears to have told the Jobcentre of the position. Can it be right to cover the full Council tax for four persons, three of whom are in full-time employment? Mr x is a landlord so his tenants cannot be non-deps.

    Someone help me out …..

    Carol Meredith

    If the Job Centre are aware of his incme from sub-tenants and are still satisfied that he qualifies for JSA(IB) then I think that he is entitled to the CTB. Like you say, under the heirarchy he has to be the sole liable person and as tenants the other 3 cannot be non deps so no deductions to apply. However, if the rent from sub-tenants is so high that it is covering a rent of £2000 pcm I do find it hard to believe that he really does still qualify for JSA(IB). If he is getting JSA(C) however you will need to add income from sub-tenants to his income to us in the CTB calculation.


    I haven’t had recent experience of this issue arising between LAs and DWP, but in the past it has been extremely difficult to persuade DWP that rent from commercial sub-occupiers in the claimant’s home is a means-testing issue. I always used to find that DWP believed there would be some kind of adjustment to the eligible liability for HB/CTB purposes. But there isn’t (not since 1988 anyway), and so if the DWP is aware of the issue and adamant that it is happy with the JSA(ib) award, I think you are right to conclude that you are lumbered with a passported claimant.


    Thanks Carol and Peter. I also agree that DWP staff do not understand the issues here. If a customer advises that they are just collecting the rent from the other tenants and that it covers the full rent, then so be it. In fact the customer (landlord) is making a potential profit because he is charging an added amount over and above the cost to him. It is arguable that he is acting in a way similar to a self-employed person e.g. he is buying the right to a room at £500 per month and selling it at £700 per month – a gross profit of £600 per month (figures approx). No different from someone selling fruit and veg.

    I have not done the sums but I suspect this claimant would be much better off claiming HB as a self-employed landlord even taking into account the loss of JSA.

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