Housing Benefit Capital calculation query - please help!

Carolanski_2

Hi there

Does anybody know how the benefits office calculate capital when working out entitlement to Housing/Council Tax benefit.

The original benefits officer I saw told me that if you owned a property that you didn't live in they would take the market valuation, take off 10% to take into account fees etc for selling the property, then take off any outstanding loans/mortgage secured on it.

This seemed to be reiterated in the info I got from Age UK and a couple of different local authority websites.

However having processed the claim my local authority have taken the valuation, then taken mortgage off then applied the 10% reduction

This has meant that the capital is over the £16k limit and the claim has been turned down.

EG

Calculation 1: House worth £100,000, less 10% (£10,000) = £90,000 less mortgage of £92000 would give a figure of minus £2000

Calculation 2:House worth £100,000, less mortgage of £92000 would give £8000, less 10% (£800) gicing a capital figure of £7200

Please could someone with more knowledge than me let me know which is correct. £800 would barely cover the legal fees on a sale, let alone estate agency fees, redemption penalties etc.

It doesn't seem right to me and I'd like to appeal.

Any info GREATLY appreciated - thank you in advance

Kind regards

Carolanski

deborasun

You should appeal!

as it should be gross value £100,000 minus 10%- 10,000= £90,000 less any debt secured against it : mortgage £92.000= -£2,000

HBreg 47- see


Calculation of capital in the United Kingdom
47. Capital which a claimant possesses in the United Kingdom shall be calculated—

(a) except in a case to which sub-paragraph (b) applies, at its current market or surrender value less—

(i) where there would be expenses attributable to sale, 10 per cent.; and (ii) the amount of any encumbrance secured on it;

fluffymovie

Just to agree with deborasun

Value of property - 10% if selling would incur costs, then deduct mortgage & or secured loans.

In the example shown above, if this would leave you in debit to £2k, this isn't offset against other capital so if you have £10,000 we wouldn't use capital of £8000.

You may not need to go down the route of a formal appeal. People make mistakes and in my LA, if you contact and ask for them to explain their decision and point out the error, they usually correct it for you without you needing to formally appeal.