If you sub-let part of your home to a tenant or boarder the income you receive must be declared. However, part of the income you receive as rent or board is ignored. The amount ignored depends on the number of tenants you have and on whether you provide meals for your tenant(s). 

People who share your house who are related to you are counted as non-dependents and you do not need to declare money they pay to cover their living costs and accommodation. This money is not treated as rent or board and will not be counted in your income. Instead such payments are treated as a contribution to household expenses. However, in this instance you need to declare them as non-dependants and a non-dependant deduction may be made. For more information see non-dependant deductions.

People who share your home as sub-tenants or boarder generally count as needing a bedroom when the 'bedroom tax' or Local Housing Allowance is calculated. The same also generally applies to non-dependents who live with you. If you have a spare room(s) then one way to make sure your house is not under-occupied (according to the government's formula) is to have a sub-tenant or lodger let the room

Under Universal Credit the rules in relation to sub-tenants and lodgers will change radically. For more information see rules about sub-tenants and lodgers under Universal Credit.

Sub-Tenant or Boarder?

A sub-tenant is a boarder or lodger who is sharing your home on a commercial basis. If you provide meals they count as a boarder, if not they count as a sub-tenant.

Enter the full amount of rental income received and the number of sub-tenants/boarders and the calculator will automatically deduct the appropriate disregard.

Boarders

These are people who have moved in with you who are paying for board and lodging with some prepared food, and they are not adult children, relatives or friends. In calculating benefits the first £20 per week of rent you receive from them is disregarded together with half of the rest. For example if you receive £50 per week board, only £15 is counted as income for benefit purposes (£50 - £20 divided by 2 = £15).

Sub-Tenants

These are people, other than adult children, relatives or friends, who are making a payment to you for a room or rooms and no payment is included for meals. In calculating benefits £20 per week of the money you receive from each sub-tenant is disregarded.