Claiming housing support when you rent from a family member

If you rent your home from a parent, sibling or other relative, you might assume you can get help with the rent through Universal Credit or Housing Benefit just like any other tenant. In fact, the rules are stricter when you rent from family, and many such claims are refused. This guide explains when you can and cannot get housing support if you rent from a family member, and how to give your claim the best chance.

The general rule

You can sometimes get help with rent you pay to a relative, but only if your arrangement is a genuine commercial tenancy and was not set up mainly to claim benefits. The rules exist to stop arrangements that are really about getting housing support rather than a true landlord and tenant relationship. So whether you can claim depends heavily on the nature of your arrangement, not simply on the fact that you pay rent.

When you cannot claim

There are some situations where you definitely cannot get help with the rent. The main one is where you rent from a close relative who lives in the same property as you. In that case, you are treated as part of the same household rather than as a tenant, and no housing support is payable. So if you pay rent to a parent you live with, for example, you will not be able to claim housing support for it.

Renting from a relative who lives elsewhere

If you rent from a relative who lives in a different property, you may be able to claim, but only if the tenancy is on a commercial basis. This means there should be a proper agreement, rent set at a realistic level, an expectation that you pay it and that the landlord would take action if you did not, and the arrangement should not have been created just to access benefits. The more your arrangement looks like a normal commercial let, the stronger your claim.

What counts as a commercial arrangement

To show your tenancy is commercial, it helps to have a written tenancy agreement, rent set at a level similar to other local rents rather than artificially high or low, and evidence that rent is actually paid and demanded. If the landlord lets you off paying when money is tight, or the rent only appeared when you needed to claim, the arrangement may be judged not to be commercial, and your claim can be refused. Keeping things on a proper footing matters.

The "contrived tenancy" test

Even if your tenancy looks commercial, a claim can be refused if the arrangement is judged to be contrived, meaning set up to take advantage of the benefits system. Decision-makers look at the whole picture, including why the tenancy was created and whether it would continue without benefits. This is a question of fact in each case, so it is important to be able to explain genuinely why the arrangement exists and that it is a real tenancy.

Buying a former family home

Particular care is needed if you now rent a property you, or a member of your family, used to own, as there are extra rules that can prevent a claim in some cases where someone previously owned the home. These situations can be complex, so if you rent a home that was once owned by you or a relative, it is well worth getting advice before you claim, to understand whether you are likely to qualify.

How to give your claim the best chance

If you rent from a relative who lives elsewhere and the arrangement is genuine, you can strengthen your claim by having a proper written tenancy agreement, paying rent in a traceable way such as by bank transfer, setting the rent at a sensible market level, and being ready to explain honestly why the arrangement exists. Being open and keeping good records helps show that yours is a real commercial tenancy rather than a contrived one.

Why the rules are strict

The rules on renting from family are strict because, without them, it would be easy to create paper arrangements purely to draw housing support that would not exist in a true rental market. The system therefore looks for evidence of a genuine commercial relationship. This does not mean every family arrangement is suspect, but it does mean you need to show yours is real, which is why keeping things on a proper, businesslike footing from the outset is so important.

If you live with the person you rent from

It is worth being clear that living with the relative you pay is the situation most likely to rule out a claim, because you are treated as one household. This applies to close relatives such as parents, children, and siblings. Paying towards the household costs in such a case is a family arrangement rather than a tenancy, so housing support is not available, even if money genuinely changes hands between you.

If your claim is refused

If your claim for help with rent paid to a relative is refused on the grounds that it is not commercial or is contrived, you can challenge the decision through a Mandatory Reconsideration and, if needed, an appeal. It helps to provide as much evidence as possible of a genuine commercial tenancy. Getting advice before challenging is wise, as these decisions turn on the particular facts, and an adviser can assess how strong your case is.

Lodgers and joint tenants

The rules differ again if you are a lodger or a joint tenant rather than renting a whole property from a relative. If you genuinely rent a room in someone else's home on a commercial basis, different considerations apply, and the closeness of any family relationship is still relevant. Because these situations can be complicated, it is worth getting your particular arrangement checked by an adviser, who can tell you whether help with your housing costs is likely to be available.

Be honest about the arrangement

Throughout any claim involving family, honesty is essential. You should never present an arrangement as something it is not, as that would be benefit fraud. The aim is not to disguise a family arrangement as a tenancy, but to show that a genuine commercial tenancy exists where that is truly the case. If your arrangement is real and businesslike, say so plainly and back it up with evidence, and let the decision-maker assess it on the facts.

In short

You cannot get housing support for rent paid to a close relative you live with. If you rent from a relative who lives elsewhere, you may be able to claim, but only if the tenancy is genuinely commercial and not contrived to claim benefits. A proper agreement, a realistic rent and traceable payments all help.

The bottom line

Renting from family is not a reason to avoid claiming if your arrangement is genuine, but it is a reason to take care. Set the tenancy up properly, keep evidence, and be ready to show it is a real commercial let. If in doubt, get advice before you claim, so you understand whether you are likely to qualify and can put your claim forward in the strongest way rather than having it refused and having to appeal.

Where to get help

Because these claims are often refused, it is worth getting advice from Citizens Advice before you claim if you rent from family. See our guides to the Universal Credit housing element and Housing Benefit.