As someone who offers money advice professionally, I am continuously supporting people to maximise their income so they can set up affordable payment plans.
There are many ways to maximising your income, such as taking a second job, applying for additional benefits or subletting a room if there's a spare one.
Will subletting part of your home affect your Housing Benefit?
If you receive Housing Benefits, the first £20 of weekly income from a subtenant is ignored and won't affect your benefit.
For example, John sublets a room in his home and charges his subtenant £40 per week. £20 of this would be disregarded, meaning the remaining £20 is treated as income when working out how much Housing Benefit John would be entitled to each week.
If you're a working-age social housing tenant and you have one or more 'spare' bedrooms, you may be paying some money towards your rent already because your Housing Benefit has been reduced. This is known as the 'under-occupancy charge', the 'social sector size criteria reduction', the 'removal of the spare room subsidy' or the 'bedroom tax'.
If you sublet a room, you'll be treated as needing a bedroom for the subtenant for Housing Benefit purposes. This means that your Housing Benefit won't be reduced because the bedroom is no longer 'spare', although the rent that you get from the subtenant counts as income, as explained above.
What about Universal Credit?
Things are different when you are on, or move onto, Universal Credit.
For people receiving Universal Credit, the rent from a subtenant is not treated as income.
This means that the amount you charge a subtenant will not impact how much Universal Credit you receive - you could finally make extra cash without it having an impact your their Universal Credit claim. However, working-age social housing tenants are subject to the size criteria reduction for the spare bedroom that the subtenant rents.
If you're in debt and need help maximising your income, contact Debt Free London so we can make you an appointment for the free advice you need. Call us on 0808 164 248, our lines are open Monday to Friday from 10am until 5pm, or complete our online assessment tool below, and one of the team will be in touch.
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