Taking in a lodger is common for tenants as it increases their income. Through this blog post, we aim to explore whether the lodger that you take in can claim Universal Credit. For an overview of how Universal Credit applies to claimants’ circumstances, we will also analyse different situations in which eligible individuals can claim this state benefit.

Can A Lodger Claim Universal Credit?

Yes, a lodger can claim Universal Credit. To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for child care
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

Universal Credit is a state benefit for UK citizens above the age of 18 and below state pension age. It aims to provide financial assistance to individuals who are either out of work or on a low income. It is a monthly payment that claimants receive to help them to cover living costs.

Universal Credit has replaced six benefits, referred to as the “legacy benefits” by serving a single payment for households and helping them meet housing and childcare costs. These include the following:

  • Income Support
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Additionally, it provides support for health conditions, disabilities or the role of a carer that prevent claimants from working full time or working at all.

What Counts As Income For Universal Credit?

During the calculation of benefits by the DWP, not only is job-related income(s) taken into account, but the authorities will also consider unearned incomes. These are incomes that individuals receive without having to work.  

Unearned incomes that affect Universal Credit payments include the following:

  • Jobseeker’s Allowance (new style)
  • Employment and Support Allowance (new style)
  • Pension Income
  • Carer’s Allowance
  • State benefits that aren’t replaced by Universal Credit

For every £1 earned through any of the above means, £1 will be reduced from your Universal Credit payments.

Which Benefits Are Included In Universal Credit?

Universal Credit has replaced six benefits, referred to as the “legacy benefits” by serving a single payment for households and helping them meet housing and childcare costs. These include

  • Income Support
  • Income-related Employment and Support Allowance (ESA)
  • Income-based Jobseeker’s Allowance (JSA)
  • Housing Benefit
  • Child Tax Credit
  • Working Tax Credit

Additionally, it provides support for health conditions, disabilities or the role of a carer that prevent claimants from working full time or working at all.

According to government statistics, there were approximately 5.9 million claimants of Universal Credit in July 2021, out of which 53 per cent were women. 

Do You Spend 35 Hours In Job Search To Claim Universal Credit?

Yes, if you have agreed in your Claimant Commitment for Universal Credit that you will spend 35 hours per week working or looking for work, you will be required to keep up with this commitment to continue claiming Universal Credit payments. This includes the following activities:

  • drafting an appropriate CV and cover note
  • customising your CV and cover note to each job that you apply for
  • conducting research on employers and transport links
  • setting up online job alerts
  • creating an online employee profile
  • applying for suitable positions
  • following up on job applications
  • social networking with the intent to look for a job
  • preparing for your interview

You must record your activities in order to track your progress and share the results with your work coach. This will serve as evidence that you have managed to keep up with your Claimant Commitment of spending 35 hours looking for a job. Once you do start a job, you can keep the authorities updated on your working hours.

Can You Claim Universal Credit Without Working 35 Hours?

However, if you are a mother whose youngest child is younger than 1 year of age, you will not be expected to look for work while you are on Universal Credit. Below are details of your responsibilities regarding work depending on the age of your child/children if you are claiming Universal Credit:

Age of your youngest childYour responsibilities
Under 1 yearYou don’t need to look for work in order to claim Universal Credit.
1 yearYou don’t need to look for work if you are not already working but you will be asked to attend work-related interviews with a work coach.
2 yearsYou should take active steps to prepare for work including making a CV. 
3 or 4 yearsYou should work or look for work for a maximum of 16 hours per week. This may include training and work-related interviews.
Between 5 and 12 yearsYou should work or look for work for a maximum of 25 hours per week. This may include training and work-related interviews.
13 years and aboveYou should work or look for work for a maximum of 35 hours per week. This may include training and work-related interviews.

If you or your partner have to take care of a child and one of you have limited capability for work, you may be able to claim a work allowance despite one of the partners having a job. However, if you were taking the help of Universal Credit to pay mortgage interest payments, you will lose that claim once you get a job.

Can A Stay At Home Mum Claim Universal Credit?

Yes, stay at home mums can claim Universal Credit. To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for child care
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

What Is The Light Touch Group For Universal Credit?

The Light Touch Regime aims to encourage and motivate its members to become financially independent and not have to rely on Universal Credit in the near future. It is a subgroup assigned to those individuals who belong to the following classification for Universal Credit claim:

  • they are part of the All Work-Related Requirement (AWRR) Group 
  • their earnings are between the Administrative Earnings Threshold (AET) and the CET

It also includes claimants who belong to any of the following situations:

  • individual earnings are above the AET
  • there are no individual earnings but household earnings are above the AET
  • individual earnings are below the individual AET but household earnings are above the household AET

The Administrative Earnings Threshold (AET) for individuals has been set as follows: 

  • £345 per month for an individual
  • £552 per month for a joint claim

Which Change In Circumstances Affect Universal Credit?

Certain changes in your circumstances can bear an impact on the benefits you receive including Universal Credit. Therefore, it is advisable if you face any of the following situations, you must inform the relevant authorities: 

  • a new mobile number, postal or email address
  • a change in your bank details
  • change of residence due to moving in with a partner
  • having a child
  • changes to your health condition
  • being unable to work due to an illness
  • starting to care for a child or disabled person
  • finding or finishing a job
  • changes to your earnings, savings, investments
  • changes to rental payments
  • changes to your immigration status (in case you’re not a British citizen)

Conclusion:

The discussion above has made it clear that lodgers can be Universal Credit claimants as long as they meet the eligibility criteria for this state benefit. In fact, single parents, stay at home mothers and part-time workers can all claim Universal Credit if they qualify to meet the conditions.

FAQs: Can A Lodger Claim Universal Credit?

Do Lodgers Pay Council Tax?

No lodgers do not pay council tax if they live in someone’s house. However, single occupancy residents who have let out their house to lodgers will lose their 25 per cent discount in most cases if they share their home with a lodger. The only exception to this is if the lodger is a full-time student, below 18 years of age, paying a full council tax at another residence or receiving benefits.

Can you let your family live in your house rent-free in the UK?

Yes, you can let your family live in your house rent-free in the UK. However, if any of you claim benefits (including council tax support), these will be reduced as the DWP may consider their income as a joint income with yours. Similarly, sharing a rent-free accommodation with you will not exempt your family members (who are adults) from council tax payment.

Can I pay rent to my mother?

Yes, you can pay rent to your mother if you share a house with them and she owns the property. However, if either of you is claiming benefits, you must have a formal tenancy agreement in place so that your benefits claim remains intact. 

What triggers Universal Credit investigation?

A Universal Credit investigation can be triggered by any false claim being suspicious or the claimant failing to provide proof in support of their claim. This may include choosing not to declare the actual household income, faking an illness or injury to claim benefits, false declaration of one’s living conditions.

Does Universal Credit pay full rent?

The amount of Universal Credit that tenants receive each month may change; therefore your landlord may receive a different amount to cover your housing payments and you will be required to pay the remaining amount if the payment falls short of the due amount of rent.  

References:

Should-lodgers-pay-council-tax

Renting-a-home/subletting-and-lodging/lodging-index/taking-in-a-lodger

Universal Credit and you – GOV.UK

Understanding Universal Credit – How earnings affect Universal Credit

What does “35 hours job search” mean? – a Freedom of Information request to the Department for Work and Pensions – WhatDoTheyKnow

Supporting claimants in the light-touch regime

What was missing from this post which could have made it better?