Rent as income

carmind wrote: If a person rents out the property they own and uses that rental income to rent a second house to live in, how would this affect a claim for income-based ESA? Would the DWP still count the rent earned as income?

We can't give detailed financial advice on the forum.

I would expect the rental income to be treated as income, however, it should be possible to offset this against any costs for the house, for example a mortgage payment.

However, as they are not living in the property it then becomes an asset and any equity would count against the £16,000 limit that they are allowed, see

Asset rule for ESA(IR)

Gordon