on benefits and have just inherited part of a house

clutton_2

Hi - i am posting this for a friend. He works part time, is in receipt of housing benefit and council tax benefit, and has just inherited a third share of a late family member's house. The house will be sold when it is cleared.

The acquistion of this property has been declared to the council already.

There is a possibility that the proceeds from the sale could be used to buy the Housing Association property he lives in at present.

How will this affect entitlement to these two current benefits.

thanks very much

cattie

When probate is granted and he receives the money from the sale of the house then he needs to notify the benefits people and his benefits will be reduced if he has over the savings limit.

The fact that he may use the money to buy his Housing Association property doesn't mean that the money will be disregarded as savings.

clutton_2

thanks Cattie. I had heard that if folks spent inherited money, even on sensible things like a house purchase, that the Benefits agency could say they were depriving themselves of assets, and then refuse to pay them any benefit payments. He wants to avoid this if at all possible, as he does not earn enough to feed his family, and pay full council tax and housing benefit. He is a terribly moral person and wants to do things by the book, he just seeks to understand the system.

Mara69

clutton wrote: »

thanks Cattie. I had heard that if folks spent inherited money, even on sensible things like a house purchase, that the Benefits agency could say they were depriving themselves of assets, and then refuse to pay them any benefit payments. He wants to avoid this if at all possible, as he does not earn enough to feed his family, and pay full council tax and housing benefit. He is a terribly moral person and wants to do things by the book, he just seeks to understand the system.

Then he would be better employed asking the DWP, in writing. Get a response in writing. Job done.

Might help him to Google deprivation of capital as well. He cannot inherit a sum of money and expect to keep (spend) it and retain means tested benefits.

skintandscared_2

If he uses the money to buy the property he's living in, he won't need housing benefit any more will he? If he doesn't have to pay a top-up to the housing benefit, would that leave him with extra money to divert elsewhere, i.e. compensate for any other benefits he may lose?

If not, he may be better off using the inheritance money to actually live on, then reclaiming benefits when that money falls below the acceptable limit.

Mojisola

cattie wrote: »

When probate is granted and he receives the money from the sale of the house then he needs to notify the benefits people and his benefits will be reduced if he has over the savings limit.

The fact that he may use the money to buy his Housing Association property doesn't mean that the money will be disregarded as savings.

Are you sure? I thought an inheritance could be disregarded if a house is bought within a reasonable time. It represents future savings for the government as housing benefits will no longer be needed.

Is he sure that buying the property is a good, long-term proposition? Will he have enough savings to cope with repairs and maintenance for the rest of his life?

clutton_2

""Will he have enough savings to cope with repairs and maintenance for the rest of his life?"" that is a very good point indeed and one which no one in the family had considered. It is a council house, concrete house, which needs its front wall rebuilding, so not an easy property to sell on again if he finds it tough going.

xylophone

clutton wrote: »

""Will he have enough savings to cope with repairs and maintenance for the rest of his life?"" that is a very good point indeed and one which no one in the family had considered. It is a council house, concrete house, which needs its front wall rebuilding, so not an easy property to sell on again if he finds it tough going.

It doesn't sound like a wise purchase?

Mojisola

clutton wrote: »

It is a council house, concrete house, which needs its front wall rebuilding, so not an easy property to sell on again if he finds it tough going.

Have a read of this - https://www.makingmoneyfromproperty.tv/articles/20090427

clutton_2

thanks for that Mojisola - there are a number of different non standard constructions, and not all of them are spurned by Mortgage Companies. I own one myself (a Wimpey No Fines) which is perfectly easy to mortgage. My friend will of course take advice from local surveyors before deciding on whether there are major works required. The council concrete houses which had metal frames were far more dangerous and lacking in longevity than Wimpey no fines for example.

Dunroamin

clutton wrote: »

thanks Cattie. I had heard that if folks spent inherited money, even on sensible things like a house purchase, that the Benefits agency could say they were depriving themselves of assets, and then refuse to pay them any benefit payments. He wants to avoid this if at all possible, as he does not earn enough to feed his family, and pay full council tax and housing benefit. He is a terribly moral person and wants to do things by the book, he just seeks to understand the system.

If he uses his inheritance to buy his council house then he'll have no need for housing benefit.