If you are in receipt of a means-tested benefit such as Income Support or Income-based Jobseekers’ allowance, the first £20 per week of any rent you receive will be disregarded when calculating your income. If you provide some meals to your lodger only half of any rent over £20 will be counted as income.
You must inform your local Jobcentre Plus office about the rent you are receiving. If you fail to do this, you will have to pay back any benefits you were not entitled to and you may even be prosecuted.
If you are claiming Housing Benefit or Council Tax Support, the first £20 per week of the rent you received will be disregarded when calculating your income. If you provide some meals to your lodger only half of any rent over £20 will be counted as income. If no meals are provided, all the rest will be treated as income. You must tell your local council’s housing benefit office about the rent you are receiving.
If the person you are renting to is a relation, then they will more than likely be treated as a non-dependant. This means that rather than counting the income you receive as rent, you will be asked to provide evidence of their income so that an appropriate deduction can be applied to your benefit. Please contact your local Housing Benefit Office for further advice.
Council Tax
You will remain responsible for paying the council tax. If you live alone and take in a lodger - you will no longer be entitled to the single person discount of 25%.
How will taking in a lodger affect my household utility bills?
An extra person in the household may increase the amount you spend on things like gas, electricity and water. Renting out a room is likely to affect your contents insurance as most insurers will put up premiums, but it's still important to tell them you have a lodger to be sure that your belongings are protected. If you don't tell them, the insurance may not be valid.
Universal Credit – changes ahead
If you go onto Universal Credit your benefits maybe affected in a different way. You can find more information about these changes at the Department for Work and Pensions website: www.dwp.gov.uk
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