SDP and boarder

daniiD

Hi I get SDP and PIP and income related ESA 
And have 1 child on dla 
I have a spare room that a friend of a friend wants to rent 
I wanted to charge £150 for the room since my rent is £675 and I get £529 coverd by my housing benefits 

Would I lose my SDP ? 
How much would I lose from housing and esa for renting the room ? 
Thank you

poppy123456

If it’s a commercial agreement and you’re not related to the lodger then it will not affect your SDP.!

Are you renting privately or social housing? Do you have permission from your landlord to take on a lodger? 

The rent from your lodger will be classed as income for your housing benefit. There’s some information here https://www.citizensadvice.org.uk/housing/renting-a-home/lodging-index/taking-in-a-lodger-what-you-need-to-think-about-first/#:~:text=If%20you%20take%20in%20a,as%20income%2C%20as%20explained%20above.

You will also lose your single person discount for council tax. 

calcotti

For income based ESA only £20 of income from a lodger is ignored. You you charge £150/week you will lose £130/week from your ESA (if it is all income based). As you see from above letting the room only increases income by £20/week. However, if you still have income based ESA after the lodger deduction then your Housing Benefit would still be the maximum entitlement (and the HB would increase because the room would no longer be spare).

You should also check what you might check if you claimed Universal Credit instead. Normally ESA with SDP would pay more than UC but under UC the room occupied a lodger would still be treated as spare but the income from the lodger would be ignored. UC may therefore given you a higher income overall - but if you later decide you don't want a lodger you will not be able to go back to ESA.

You should use a benefit calculator or get advice for a full benefit check before doing anything and consider whether or not having a lodger is likely to be a long term situation or only temporary.

poppy123456

Thanks calcotti, apologise to the OP for giving incorrect information. I thought the decrease would come from HB and not from the Income Based ESA.

calcotti

poppy123456 said:

Thanks calcotti, apologise to the OP for giving incorrect information. I thought the decrease would come from HB and not from the Income Based ESA.

Fairly confident if I've gone this right. Provided there is still income based ESA payable the HB would remain a 'passported' benefit 

If OP has a mixed ESA award with both contribution based and income based ESA the overall income will be different. If the lodger income cancelled out the income based ESA so only the contribution based ESA remained then the HB would have to be calculated.

Definitely not a decision I would recommend without a full benefit check. 

daniiD

It's £150a month for rent to cover the rest of the rent 
It's private rented and yes landlord is OK with it 
I have income based but work relatesd esa 

calcotti

daniiD said:

It's £150a month for rent to cover the rest of the rent 
It's private rented and yes landlord is OK with it 
I have income based but work relatesd esa 

Sorry I took £150 as weekly when I replied before.
£150/month is £34.62/week.
So I would expect you would lose £14.62/week from your ESA but I think the applicable LHA would increase because the room would no longer be spare so your Housing Benefit would increase.
At this level ESA is likely to remain better than considering UC.  
Although you did really do need to do a full benefit check to establish the overall impact on you your overall income.

This may be helpful
https://www.nhas.org.uk/assets/docs/Taking_in_a_lodger_money_matters_FACTSHEET_NHAS_1.pdf
It's a couple of years old but I think is still correct.