I think this falls under a separate heading. Reg 42(4)(a)(ii) says that a payment of income is treated as income if it is used for anything which would be covered by benefits - food, clothing, fuel and rent which is covered by housing benefit.
There is then a related disregard in Sch 9, para 30, which disregards any payment made to the claimant intended to be used to pay that part of his rent which is not paid by housing benefit, to the extent it is so used.
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