will house sale profit and benefit

nellsman

i am currently in the process of selling a house i shared with a previous partner. if the house sells for the expected price my share will be around £18000. I have debts of around £5000 which i would pay off from the sale. I am married with 4 children and work part time. I claim housing and council tax benefit. I understand that i will lose my entitlement to the benefits if i receive £18000 but would be entitled to some benefit if I have £13000 after paying off the debts. Do I notify the council when i receive the full amount, lose the benefit, pay off the debts then re apply or pay off the debts then notify them that i have received £13000.just not sure what the rules are and dont want to do the wrong thing

dookar

for Capital over £8k you have a tariff income of £1 for every £500.

If you pay your debts when you are not legally obliged to it could be treated as deprivation and the full £18k will be treated as notional capital

healy

dookar wrote: »

for Capital over £8k you have a tariff income of £1 for every £500.

If you pay your debts when you are not legally obliged to it could be treated as deprivation and the full £18k will be treated as notional capital

That tariff is for the over 60s.

It is £1 for every £250 for the under 60s.

hippy-chicy

You need to inform them when you receive the full amount and explain to them that you intend to pay off 5k outstanding debts. You will need to porvide evidence that this money has been paid of debts etc receipts, statements etc. The assessor will then look at this and make a decision as to your entitlement.

Also just to note that the tariff income rules for working age is £1 for every £250 or part of over £6000 and for pension age is £1 for every £500 over £10,000

dookar

healy wrote: »

That tariff is for the over 60s.

It is £1 for every £250 for the under 60s.

yes. That'll teach me to come on here after listening to my dad whining

siren13577

Speak to the benefits agency before you pay off your debts, keep a paper trail as much as you can and present this to the benefits office prior to any debts being paid to show the debts you would be paying and why. I don't know if they have some debts considered more important than others, say like you perhaps owe your family money. Get any decision the benefits office make in writing to protect yourself.

Calculating on the amount of £13000 after you have paid off the debts the excess over the allowance of savings is £7000, so:

£1 for every £250 (£250 x 28 = £7000) is £28, I presume this will be weekly, fortnightly or monthly depending on how often your benefit is paid, but I'm not entirely sure.

Calculating on the entire capital of £18000 and removing the £6000 disregard so £12000
£1 for every £250 (£250 x 48 = £12000) is £48

Also if your income does drop perhaps you might be eligible for more tax credits but that would be something to discuss with the tax office. Don't tell the BA until the house sale goes through, just in case something goes wrong and your benefits get messed up. Put everything in writing and get everything confirmed in writing also. It doesn't look a huge amount either way that you will lose but you will be expected to use your capital to plug the gap. I hope this helps and good luck with the sale.

Oldernotwiser

siren13577 wrote: »

I don't know if they have some debts considered more important than others, say like you perhaps owe your family money. Get any decision the benefits office make in writing to protect yourself.
.

I don't think that repaying loans to family are considered to be a high priority and paying them is the sort of thing that will be looked at most carefully.

Voyager2002

Please get advice before paying off your debts. Otherwise you might fall foul of the rule called "deprivation of capital", under which your benefit would be calculated on the assumption that you still had the full 18,000 (and so got no benefit at all) even though you had less than that after paying the debt.

siren13577

Oldernotwiser wrote: »

I don't think that repaying loans to family are considered to be a high priority and paying them is the sort of thing that will be looked at most carefully.

You're quite right, I didn't phrase that well, I meant debts like council tax, utilities and rent were priority.

nellsman

a big thankyou to all who replied to my question. this was my 1st time of using this site and i'm well impressed. thanks again all