How does a lodger effect my benefits?

Bawbee

Hi, I am classed as SMI and get a full council tax discount. I recieve ESA with SDP and PIP.

If a lodger was to move into my property would I lose my SDP?

Would a lodger be a change of circumstances and if so would this mean I would be pushed onto UC? 

Would I lose my full council tax discount?

Thank you very much

Bawbee

Sorry can't edit. I currently live alone and the potential lodger isn't a family member

poppy123456

If there's a commercial agreement for the lodger then it won't affect your SDP because they are not a family member.

For the council tax SMI it will depend on the circumstances of your lodger.

• A 50% council tax discount. This applies if you/they are SMI and live with one or more other adults who are also disregarded for council tax purposes, but for reasons other than being SMI or full-time students – for instance, because the other adults are classified as live-in carers. Households in which all occupants are disregarded get a 50% discount.

• A 25% council tax discount. This applies if an adult who isn't disregarded for council tax purposes lives with someone who is SMI, and no other adults. Or it would apply if that adult lives with someone who is SMI, plus other adults who are all disregarded for council tax purposes. In effect, a single person's discount is applied to the household, as all bar one person living in the household is disregarded.

https://www.moneysavingexpert.com/reclaim/severe-mental-impairment-dementia-council-tax-rebate/

Do you claim housing benefit for help with any rent?

calcotti

The income from your lodger will need to be declared to ESA and will reduce your ESA payments by whatever you receive from the lodger less £20 disregard/week.

Financially you are likely to be worse off with a lodger if you are on ESA.

If you switched to UC you could be better off because income from a lodger is ignored under UC. You would need to get a proper benefit check to find out. If Uc is beneficial it would be sensible to switch to UC before getting the lodger because your UC would get the SDP transitional element added if you are still getting it when you switch.

On the other hand, if you are claiming Housing Benefit and have a spare bedroom taking in a lodger could increase you HB because you are allowed a bedroom for a lodger but under UC you don't.

poppy123456

Thanks Calcotti, I didn’t realise the income would affect ESA, I thought it only affected housing benefit. Apologies to the OP for incorrect information given! 

calcotti

Thought I'd better double check
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1063461/dmgch51.pdf

51112 Where a claimant sublets part of the home the DM should
1. add together all payments made for the week by that subtenant and/or a member of the subtenant’s

family and 

2. disregard

2.1 £20 or

2.2 the whole of the amount paid where the total is less than £20. 

Note: In this guidance “home” means the dwelling occupied as the home.

Bawbee

I do not claim HB as I own my home.

The switching to UC before taking in the lodger is interesting. 

So if I didn't switch to UC before taking on a lodger I'd be moved onto it regardless but without the SDP transitional element?


Thanks again for this valuable information

poppy123456

No one is automatically moved onto UC, you have to claim it yourself. 

calcotti

Bawbee said:

So if I didn't switch to UC before taking on a lodger I'd be moved onto it regardless but without the SDP transitional element?

At the moment it is your choice whether or not to claim UC (although you will have to switch at some time before spring 2025).

If you were to claim ESA while getting SDP you will get the transitional SDP element added to your UC.

My earlier post was wrong regarding the need to consider UC before getting the lodger. As poppy said, if the lodger has a commercial agreement with you your SDP will be retained in which case it doesn’t matter when you switch. (Apologies - I confused myself.)

While living without a lodger you will be getting more on ESA than you get on UC. With a lodger I suspect you will be better off on UC. However you need to do a proper benefit check so that you can be properly informed before making any decision. Any decision will obviously also be informed by the reason you want a lodger and whether or not you expect it to be a long term situation.

Bawbee

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

I mean im wondering if a lodger is a change in circumstances that would trigger a migration and I'll lose the SDP - unless I voluntarily switch over before housing a lodger?

//

It also seems that on UC a disabled person in my situation gets more financial support than on ESA if you're going to be in the LCWRA group. I'm quite surprised by this, surely I've got something wrong here. I did the online calculations which didn't include SDP transitional or LCWRA but when you add those in, it's better than it is on ESA. Does this sound about right?

poppy123456

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

I mean im wondering if a lodger is a change in circumstances that would trigger a migration and I'll lose the SDP - unless I voluntarily switch over before housing a lodger?

No, it's not classed as a change of circumstances that will prompt a move.

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

It also seems that on UC a disabled person in my situation gets more financial support than on ESA if you're going to be in the LCWRA group. I'm quite surprised by this, surely I've got something wrong here. I did the online calculations which didn't include SDP transitional or LCWRA but when you add those in, it's better than it is on ESA. Does this sound about right?

For someone claiming ESA without the SDP then yes UC LCWRA pays more. For someone claiming SDP like your yourself then UC LCWRA pays less, even with the SDP transitional protection.

Bawbee

poppy123456 said:

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

I mean im wondering if a lodger is a change in circumstances that would trigger a migration and I'll lose the SDP - unless I voluntarily switch over before housing a lodger?

No, it's not classed as a change of circumstances that will prompt a move.

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

It also seems that on UC a disabled person in my situation gets more financial support than on ESA if you're going to be in the LCWRA group. I'm quite surprised by this, surely I've got something wrong here. I did the online calculations which didn't include SDP transitional or LCWRA but when you add those in, it's better than it is on ESA. Does this sound about right?

For someone claiming ESA without the SDP then yes UC LCWRA pays more. For someone claiming SDP like your yourself then UC LCWRA pays less, even with the SDP transitional protection.

I did the entitled.to calculation, it doesn't seem to add the SDP transitional element or the LCWRA.

When I added SDP transitional at 120/month and LCWRA at 354.28/month I ended up with nearly £50 more per week 

And the ESA calculation from the calculatior was correct because its exactly what I recieve at the moment.


(Ignoring the lodger thing for time being)

Bawbee

poppy123456 said:

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

I mean im wondering if a lodger is a change in circumstances that would trigger a migration and I'll lose the SDP - unless I voluntarily switch over before housing a lodger?

No, it's not classed as a change of circumstances that will prompt a move.

Bawbee said:

poppy123456 said:

No one is automatically moved onto UC, you have to claim it yourself. 

It also seems that on UC a disabled person in my situation gets more financial support than on ESA if you're going to be in the LCWRA group. I'm quite surprised by this, surely I've got something wrong here. I did the online calculations which didn't include SDP transitional or LCWRA but when you add those in, it's better than it is on ESA. Does this sound about right?

For someone claiming ESA without the SDP then yes UC LCWRA pays more. For someone claiming SDP like your yourself then UC LCWRA pays less, even with the SDP transitional protection.

Bawbee

Oh the entitled to calc DOES include the LCWRA in the final UC amount, my bad.