Can I take a lodger on ESA and PIP in my privately owned home without losing money?

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Comments

  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    Apologies for the above. I am dyslexic and it can get out of control when I am stressed!
  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    Hi again, Thank you for advising me that you have an income related ESA claim which makes it seem  unlikely that you would lose your entitlement to income related ESA if you were to take in a lodger.  A non dependent for these purpose is an adult who is residing with you.  The reference to "separately liable" in  the ESA regulations envisages a situation when there could be more than one lodger all residing in a property.  In this case there would need to be a separate commercial agreement with each lodger. In your case for your proposed lodger not to be treated as residing with you so that you can retain your SDP entitlement , you need to show there is an enforceable commercial agreement between the two of you.   
  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    Easy for me to say but try not to get stressed.  I understand that it seems a very sensible arrangement and one which could work for the both of you.  If you are able to do a benefits calculation I think that would be helpful so you can consider the options available to you and what will work best for you. 
  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    Thanks so much Sue_Scope! I feel so much clearer on reading this. As for benefits calculations, I have often and with help, done these before and in the past it seemed that ir ESA ha sbeen far better for me that UC. I can' t imagine that this would change but calcualtions are not my special skill. Please could you give some guidance as to what form any benefits check should take? I am familiar with Mandatory reconsiderations with PIP and indeed won one in recent years together with a tribunal to retain my former level of payment. I'm now older and tireder to be doing all this ( but taking your advice not to worry, for which many thanks)! I know that an adviser such as C.A.B might help with this but my 'friend/lodger' is in urgent need as, she has given notice to landlord at present accomodation, to avoid the pitfal of finding somewhere and paying two rents..
  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    Have a go with the online calculator using the link I included in my post earlier. You do have several options and even if your circumstances are such that a commercial agreement would be ultimately accepted by the DWP I am afraid that it might be a long haul getting there. f your main focus is mutual support and companionship you may find that an informal arrangement will work best.  In that event, although you lose your SDP, any payment which is paid to you in respect of living and accommodation costs is ignored.  You then retain your ESA and can reclaim the SDP if your lodger moves on. If you decide to go down the informal arrangement route you could explore whether you would be better off under UC. There is no SDP in UC but if you are in the support group for ESA the equivalent LCWRA element is more than the support group amount for ESA.  You would also need to take into account whether you are also receiving an enhanced disability premium as this too would be lost if you claimed UC. Furthermore, in UC rental income for a room you let in your own home is ignored. However as I have indicated previously once you have claimed UC you cant go back and reclaim ESA and you would not be able to reclaim your SDP if your lodger moved on. 
  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    Oh this is getting clearer now, thank you!

  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    And I will certainly do those benefit calcualtions. Thank you for sticking with me when my mental stamina wobbles a bit! Each comment has helped my understanding and confidence. This could possibly happen and I suppose would need to be based a fair bit  more on trust which I am interested in seeing more of in the world for sure!

  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited May 2022
    Lilegg said:
    As for benefits calculations, I have often and with help, done these before and in the past it seemed that ir ESA ha sbeen far better for me that UC. 
    If you get SDP then ESA will generally pay more than UC. Without SDP then UC is often better.

    One difference which is relevant in your case is that income from a lodger is completely ignored for UC, as mentioned by Sue. This means that if the arrangement is to be long term and the lodger pays a reasonable amount you might be better off on UC even though the SDP is lost. However as you don’t know if the arrangement will work out that obviously means there is a risk.

    Note also that if you moved from ESA (while getting SDP) to UC you would get SDP transitional protection included in the UC (UC would still be less than ESA) and you keep that protection even if you would no longer satisfy the conditions for SDP.
  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    My lodger would pay a rent of £598 per month including bills which on first glance seems too small an amount if I am to lose some of my council tax reduction benefit, water bill reduction for disabled people ( 20 percent off - I use a built in water filter for my health so use more water than most do but MIGHT still qualify if there is a change). My friend could be of enormous help to me as a presence in my home and a person who could bring shopping home for me ( she works in the very store that sells most of the special things I need). I will do those calculations asap! Two medical appointments today though and struglling a bit. Thoughts welcome of course.

  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    And not losing the rent I would receive would seem to more than compensate as wouldn't I receive be more overall in that way? oh but no....I think a walk in the woods may be the best thing for all of this - to take out the mind spin!
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    In my opinion Sue may have over complicated the issue of commercial arrangement. If you are going to have a lodger agreement at £598/month that should be seen as a commercial arrangement in which case your SDP entitlement remains. 

    However lodger income of £598/month will result in ESA be reduced by £118/week. (£598 x 12 /52 = £138 less £20/disregard).

    Are you clear whether your ESA is completely income based or is it a mix of contribution based and income based?
  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    Calcotti - It is income related ESA. My other obvious concern is about my council tax reduction benefit. If I lose too much of that I would be less well off money wise than before however I maybe able to shoulder that because the lodger brings other resources which have qualititive value to me. I can't go broke obviously though! I imagine I need to speak to advisers at Council tax office about this now... Thank you for your help. Keep it coming everyone, if you can please.
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited May 2022
    Lilegg said:
    Calcotti - It is income related ESA. My other obvious concern is about my council tax reduction benefit. If I lose too much of that I would be less well off money wise than before however I maybe able to shoulder that because the lodger brings other resources which have qualititive value to me. I can't go broke obviously though! I imagine I need to speak to advisers at Council tax office about this now... Thank you for your help. Keep it coming everyone, if you can please.
    If it is entirely income based then you will still be getting some income based ESA which is likely to give you entitlement to full CTR (but it will depend on the rules for your local authority).

    If the ESA were a mix of both contribution based and income based the deduction for your lodger will remove all of the income based award leaving you only contribution based ESA and CTR would probably be worked out differently.

    (Note that DWP will label a mixed ESA award as an income based award.)
  • Sue_Alumni
    Sue_Alumni Scope alumni Posts: 484 Empowering
    So the good news is that you've got options to discuss with your proposed lodger. When we communicated on Thursday I didn't know the amount of rent you were planning on charging the lodger so thought it best to put forward the various options available to you both. 
  • Lilegg
    Lilegg Online Community Member Posts: 60 Connected
    Hello again, So grateful for your input on lodger question. Thank you.  If I have a person to stay for 2 weeks do they count as a lodger or a guest?  Sometimes (often where I live) people need a short term stay somewhere between home moves and I think that if someone was to pay for thier stay with me it shouldn't impact my benefits? Please what is the maximum time and or payment limit?  I can do this question as a separate thread if that's better...
  • Alex_Alumni
    Alex_Alumni Scope alumni Posts: 7,538 Championing
    Hello @Lilegg thanks for your query :)

    Citizens Advice has information about Lodging, which I hope is helpful for you. I'm not sure if there are limits on time or payment, but I think it is important to check that you are have permission to have a lodger if you need it.

    Let us know if you have further questions.