Levitate Student: Council Tax, Rent and moral dilemma

Students, Council Tax and Rent

We are great fans of the Money Saving Expert .....but sometimes we don’t agree with all their advice to students.

This is the case with their article on Students and Council Tax where they suggest students who live in a property with a non-student might have a “moral dilemma” and go on to make suggestion of how much contribution a student should make to a bill they are not legally liable to pay.

So let us put our context on the matter of Rent, Council Tax and entitlement to welfare benefits for these expenses.

As you know Levitate is all about Rights and Responsibilities and it is important to understand them.

So let’s start with....

Rent

What is rent? Rent is a payment (of money or other means as agreed) to use a property.

What is included in the rent depends on the tenancy agreement whether that is in writing or a verbal agreement.

For detailed information about rent and tenancy agreements we recommend www.shelter.org.uk

Help to pay rent

Housing Benefit is to help people to pay their housing costs. Claimants under pension credit age must have savings under prescribed level, have the right to reside in UK and pass a habitual residence test and crucially for most students be regarded as liable to pay rent for the property.

Housing Benefit and Students

Most full-time Higher Education students are not entitled to claim housing benefit. There are some exceptions for example some lone parents, student couples with children and some disabled students may be eligible for help toward their rent (seek advice).

This may seem strange when for many, student income is very low. They way the government get around that problem is to define in the regulations who is regarded as “liable to make payments in respect of a dwelling” for the purposes of housing benefit entitlement – and guess what? - Full-time Students are not regarded as eligible to pay rent.....even though of course they do.

A non-student (living in a shared property with students), could apply for Housing Benefit help to pay their rent liability if they are not working or on low income.

If awarded Housing Benefit would the non-student have a moral dilemma to share this to help their student housemates pay their rent.....? We don’t think so...it’s the non-student Right to financial help not the students. All the tenants have a Responsibility to pay their rent but it could be that only the non-student has the Right to claim Housing Benefit.

Council Tax

What is Council Tax - in simple terms it is a local tax set and administered by a local authority. The tax has two elements; half is for the people based on two adults sharing; and half is for the property. There is one bill for each separate residence on the Valuation Office Agency valuation list and the charge falls into one of 8 or 9 valuation bands. The local authority decides what charge applies to each band. The local authority will outline to residents what it has spent the Council Tax on each year. Local authority websites are often a good source of information about Council Tax

Some residences are exempt from Council Tax liability and this includes hall of residence and properties with only full-time students living in them. Universities will issue you with Council Tax exemption certificates or tell you how to inform the local authority that you are exempt - check the university/college website for information.

It’s more complex than this though so always seek advice if you are not sure or are told you are liable for the bill.

Help to pay Council Tax

Local authorities are responsible for running their own Council Tax Support schemes to help people on low income with their Council Tax bills. Again local authority websites are a useful source of information. The schemes vary across local authority areas and can change from year to year.

Student income is very low and therefore on the maths alone many could be eligible for Council Tax Support. The government make it easier for everyone though by making most full-time students exempt from paying council tax  - less hassle all round. So it’s a student’s Right not to pay council tax....No moral dilemma here!

When students live with non-students (or even a part-time student), the residence is not exempt so someone will be liable for the council tax. Any non-student living with just all students could apply to the local authority for a discount (e.g. 25% discount on the bill) and if their income is low help to pay in the form of council tax support.

If the non-student is also exempt from paying council tax for other reasons, then, the discount on the bill would be 50%. Who would be liable to pay the bill can be complex and depends on a hierarchy of liability – seek advice if you are not sure.

A student may have to pay the council tax even though they are disregarded when calculating the discount for the bill. This can happen to a student who is the only tenant or who owns their own home but lives with an adult who is not a student.

For example, a mum who is a full-time student, owns her own home and her adult (not in education) son lives at home with her. The property is not exempt, mum as a full-time student is disregarded so the bill is discounted by 25%, but as she is the owner occupier she is liable for the bill. We would agree that in these circumstances there is a bit of a moral dilemma regarding the son helping mum out with the bills.

It can be complex too in household where non-student does not have recourse to public funds.

From a financially capable perspective we would recommend that you don’t pay bills you are not liable for. If you are unsure about whether or not you are liable for a bill then always seek advice from you University Money Adviser or community advice such as Citizens Advice.