How people who are unhappy with a decision on a benefit claim can challenge the decision.
This information should not be relied upon as legal or professional advice. Read the disclaimer.
The rules outlined below apply both to claimants of the housing costs element (HCE) of Universal Credit (UC) as well as to claimants of Housing Benefit (HB). Although, for most people, new claims for HB are no longer possible; they will have to claim Universal Credit to get support with their housing costs.
The Department for Work and Pensions (DWP) administers and delivers Universal Credit, whereas local authorities continue to deliver Housing Benefit.
Guidance on rules outlined below is provided in the DWP’s Advice for Decision Makers (ADM Chapter F2) (PDF 208 KB) in terms of their application to claimants of the HCE of Universal Credit. For convenience, this is referred to and quoted below. Equivalent and very similar guidance concerning the application of these rules in Housing Benefit can be found in the Housing Benefit Guidance Manual (PDF 361 KB).
Is it possible to claim the housing costs element of Universal Credit or Housing Benefit when renting from a close relative?
To be entitled to help with housing costs through the HCE of UC or HB, a person must be ‘liable’ to make rent payments, which means their rent agreement must be legally enforceable. A person may be considered as liable to pay rent, and therefore entitled to benefit support for housing costs, if they rent a property from a relative who does not reside with them.
But a person who resides with, and pays rent to, a ‘close relative’ cannot claim benefit support for housing costs because they should not be treated as liable to pay rent.
What is meant by ‘close relative’?
A ‘close relative’ is defined as:
- a parent;
- a parent-in-law;
- a son or daughter;
- a son- or daughter-in-law;
- a step-son or daughter;
- a sibling; or
- the spouse or unmarried partner of any of these people.
Factors that the DWP or a local authority will consider when the claimant’s landlord is a relative and they don’t share accommodation:
1. Has the tenancy been created to take advantage of benefits which provide support for housing costs?
A claimant is not entitled to benefit support for housing costs if the DWP (in the case of UC) or a local authority (for HB) believes that they have deliberately entered into a tenancy in order to take advantage of either of these benefits (what is known as a ‘contrived’ tenancy). According to the ADM Chapter F2 (PDF 208 KB), “There must be something about the arrangements relating to the liability that indicates it seeks to abuse the HCE of UC.”
It is up to the DWP or local authority to show that such an arrangement exists before determining if abuse is involved. To do this, they must establish the facts, and take account of all the available evidence, before deciding that someone is trying to abuse the system.
Who might be deemed to be abusing benefit support for housing costs schemes?
The person abusing the system might either be the claimant, the landlord, or both acting together. It is up to the DWP or local authority to demonstrate that such an abuse is being attempted.
An example of abuse provided in the DWP’s ADM Chapter F2 (PDF 208 KB) is an arrangement a claimant has entered into which creates a rent liability they cannot meet without benefit support and which they could have avoided and still found adequate housing accommodation.
Contrivance between claimant and landlord doesn’t necessarily have to be the result of explicit agreement between the two. It’s not necessary for the claimant or landlord to have acted deceptively for the DWP or local authority to decide that there has been contrivance. In such cases, the DWP or local authority must first determine that a liability exists before considering whether the tenancy is contrived.
2. Is it a ‘non-commercial’ tenancy arrangement?
Support for housing costs is not payable for tenancies that are not commercial.
The DWP or local authority might consider a rental agreement to be non-commercial when it includes terms and conditions which are not, or which the parties did not intend to be, legally enforceable. For example, charging a low rent does not on its own make an agreement non-commercial if that is what the parties to the agreement intended.
Can the rules be avoided by creating a trust?
Claimants renting through trust arrangements are not entitled to receive the housing element of UC or Housing Benefit if the trustees or beneficiaries of the trust include:
- the claimant;
- the claimant’s partner;
- a child or qualifying young person for whom either the claimant or their partner is responsible; or
- a close relative of any of the above who lives in the accommodation with the claimant.
What if a claimant is renting from a company?
Where a claimant, their partner, their ex-partner, their partner’s ex-partner, or a ‘close relative’ who lives with them is a director or an employee of the company that is the landlord, and they cannot show that the arrangement is not a means of abusing UC or HB, then the claimant is treated as not liable for housing costs (and therefore not eligible for the HCE or HB).
Can a claimant challenge the decision if refused benefit support for housing costs?
Claimants who are refused benefit support on any of the grounds set out above and who are unhappy with this decision can challenge it.
Information on how to do this can be found on the Commons Library’s constituency casework page on challenging benefits decisions.
- Commons Library briefing: Housing Benefit: renting from relatives
- GOV.UK: ADM Chapter F2: Housing costs element (PDF 208 KB)
- GOV.UK: Housing Benefit Guidance Manual (PDF 361 KB)
- GOV.UK: Housing Benefit
- GOV.UK: Housing costs and Universal Credit
- GOV.UK: First-tier Tribunal (Social Security and Child Support)
- Shelter: Claiming benefit if you rent from family
- Shelter: Housing benefit revisions and appeals
- Citizens Advice: Help with your rent – Housing Benefit
- Citizens Advice: Universal Credit
- Commons Library consituency casework article: Challenging benefits decisions
The Commons Library does not intend the information in this article to address the specific circumstances of any particular individual. We have published it to support the work of MPs. You should not rely upon it as legal or professional advice, or as a substitute for it. We do not accept any liability whatsoever for any errors, omissions or misstatements contained herein. You should consult a suitably qualified professional if you require specific advice or information. Read our briefing for information about sources of legal advice and help.
This briefing paper considers evidence of private landlords' reluctance to let to prospective tenants in receipt of Housing Benefit/Universal Credit. The paper looks at the reasons behind this reluctance and action being taken to challenge landlords/agents who operate a "no DSS" policy.
How people can challenge a benefits decision beyond the First-Tier Tribunal