Yes. Taking in a lodger will probably affect the amount of benefits you get if you’re claiming. You will need to tell the Council’s housing benefit office and your local benefit office that you have taken in a lodger and how much rent you are receiving. This will be the case even if your lodger is living rent-free. If you simply don’t tell them, you may end up having to repay an overpayment, or be prosecuted for fraud.
If you’re receiving housing benefit and you take in a lodger, the first £20 per week of rent that you receive from the lodger will not be counted as income when your entitlement is being calculated. If you also provide some meals to your lodger only half of any rent they pay each week above £20 will be counted as income. For example, if your lodger pays £50 per week for their room and some meals, £35 will not be treated as your income when the amount of housing benefit you are entitled to is being worked out. Your income from the lodger will be treated as being £15 per week.
If you just rent the room to your lodger and do not provide any meals, only the first £20 per week that you receive in rent will be disregarded. Anything above £20 will be treated as income. So, if the rent is £50 per week, £30 will be treated as income when the Council work out how much housing benefit you are entitled to.
Other welfare benefits
If you are receiving a means-tested benefit like income support (IS) and job seekers’ allowance (JSA), the first £20 each week that you receive in rent will not be counted as income. If you also provide some meals to your lodger, only half of what they pay you each week over £20 will be counted as income.
If you don’t provide meals, then all of the rent that you receive over £20 will be classed as income when the amount of benefit you are entitled to is being calculated.
If you are receiving universal credit, the rent that you get from your lodger is not counted at all as income. You will still need to tell the local benefits office that you have taken in a lodger.
You will be responsible for the council tax. If you were previously living alone and were eligible for the 25% single person’s discount you will no longer be entitled to that once you have a lodger. You may able to claim to council tax reduction. You should contact your local council for more information.