I have a client with mental health problems, in receipt of DLA. She's currently got her own flat but needs to move into an extension on her parents' house so they can support her. In the first instance, my feeling is that she could not claim HB for rent paid to her parents but I have heard of this happening in a couple of cases. Under what circumstances can HB be paid when the claimant's landlord / lady is a close relative?
Also, client has been advised that if she moves into extension, council tax liability will be halved. don't see any grounds for this as property value will increase if anything. Any suggestions...?

If she is renting from and living with a close relative (such as her parents) she will not be eligible. It is possible that she could be eligible if it can be established that the extension is a separate dwelling. This would turn on how self-contained the extension is.

There might however still be issues around whether any tenancy is on a commercial basis.

The advice about council tax liability is exeedingly dodgy. How would the council tax liability be halved by the addition of another occupier and a considerable amount of extra house!?

In any case, if you want to convince the HB people that it is a separate dwelling you would ideally need to convince the CT people that it is so that it can be separately valued for council tax.

There are a number of potential issues relating to HB in this case. The fact that the L/L would be a "close relative" is not in itself a bar. But, it depends on the living arrangements and other factors. Therefore, before a proper answer is given, the following info would be really helpful (the relevance of each question varies and some are only for background to build a picture):

1) Why does the client need to move?

2) What is it about the client's current address that makes it unsuitable?

3) When using the word "extension", what exactly will the client's proposed dwelling consist of (i.e. rooms etc)?

4) Will the proposed extension / dwelling be separate and self-contained from the parents' dwelling?

5) Will the proposed extension / dwelling be accessable independently of the existing property?


As for CTAX liability, it sounds as if someone may have suggested that a reduction may be possible where an occupier is severely mentally impaired. However, that also makes it sound as if the daughter will, effectively, be occupying the parents' home. Hence all of the above questions.

Regards

1.& 2. The client needs to move due to her mental health deterioration and an abuse issue where she has been living.
3. the extension will be attached to the parents' house. It will have bedroom, bathroom and sitting room. Will not have own kitchen; client will share parents' kitchen in their house. Don't know whether it will have it's own front door. would imagine that could be achived if helpful to the situation.

An extremely careful read of CH/0542/2006 is highly recommended.

www.osscsc.gov.uk/aspx/view.aspx?id=2074

I suspect it will answer many of the points potentially at issue.

If the daughter's proposed "dwelling" is such that she still resides with her parents, HB will not be payable, per HBR 9(1)(b). Following CH/0542/2006, the daughter's "dwelling" will only be considered as being separate if there is a clear and distinct separation from the parents' dwelling. At least in my view.

That then leads on to thornier issues. For example, is the tenancy on a commercial basis? Has the liability been created to take advantage of the HB scheme? If changes are made to the proposed arrangements (including the set-up of the dwelling(s)) in order to try and obtain / protect HB, an LA *may* decide that either:

1) the tenancy / agreement is not on a commercial basis; or
2) the liability has been created to take advantage of the HB scheme.

Even if there turned out not to be any question marks about the issue of "dwelling", the issues of commerciality / taking advantage could still be looked at independently. But, if there were no issues about the "dwelling", your client's case would unquestionably be stronger.

I'm not suggesting an LA would DEFINITELY arrive at such conclusions but, I would not be anything like 100% confident that HB is going to be payable - at least not based on the info so far.

Sorry the above is not more definitive, one way or the other. But, it really is one of those tricky situations.

thanks v much