Treat a close relative who pays board as a non-dependant (reg 9(3)(a)) once the model has a relationship input #2559

The gap

SI 2012/2885 reg 9(2)(e) excludes from being a non-dependant "any person who is liable to make payments on a commercial basis to the applicant or the applicant's partner in respect of the occupation of the dwelling". Reg 9(3)(a) brings such a person back as a non-dependant where "that person is a close relative of his or his partner" or "the tenancy or other agreement between them is other than on a commercial basis". The Default Scheme (SI 2012/2886 Sch para 9(2)(e) and (3)(a)) has the same words; the Welsh and Scottish schemes (WSI 2013/3029 reg 9, SSI 2012/319 reg 3, SSI 2021/249 reg 8) should be checked for theirs. Housing Benefit reaches the same result another way: HB Regs 2006 reg 3(2)(e)(i) excludes a commercial payer, but reg 3(3) disapplies that for anyone treated as not liable under reg 9(1), which includes an agreement "not on a commercial basis" (reg 9(1)(a)) and a liability "to a person who also resides in the dwelling and who is a close relative of his or of his partner" (reg 9(1)(b)).

The model has no relationship input (who is whose close relative) and no input for whether an agreement is commercial. After #2077:

• council_tax_reduction_individual_non_dep_deduction_eligible takes a member of the household head's own benefit unit who pays board as a close relative of the head, so they stay a non-dependant;
• anyone outside the head's family who pays the householder (rent_paid_as_boarder, rent_paid_as_lodger), and their whole family through pays_rent_to_householder, is treated as a commercial lodger and excluded.

So a close relative in another benefit unit who pays board (an adult son living with his own partner in his mother's home, say), and anyone paying under a non-commercial agreement, is wrongly excluded from Council Tax Reduction and Housing Benefit non-dependant deductions. Universal Credit's Sch 4 para 9(2) has a similar commercial-basis exclusion worth checking at the same time.

What would fix it

• A person-level relationship to the household reference person (the FRS records RELHRP), or a boolean such as is_close_relative_of_householder, carried through policyengine-uk-data.
• Then read reg 9(3)(a)(i) explicitly in pays_rent_to_householder (or a CTR- and HB-specific variant) and in the CTR eligibility variable.

Raised in review of #2077 (Sol review r1 finding 2; maintainer review point 6).