Change in circumstances - please help

devon123

Hi. Unfortunately my relationship has broken down. We have an 8 month old child.
A few months ago I gave up my job to look after our child full time. Since then, my partner has decided he doesn't want to be with us. I am hardly sleeping because I am worried about our future. I have an appointment with the CAB in 2 weeks to find out about entitlements but I thought I'd post on here to see if anyone can help.
We are currently living in private rented accomodation. I also own my own house (in my name only) which is rented out. I have a mortgage on it. In an ideal world, I would live there if I could afford it (mortgage is 660pcm) but I'm worried that I won't be able to.
I am 34 and have worked full time since I was 21. I am devastated that I am in this situation and that I will have to claim benefits for the forseeable future.
My partner is more than willing to contribute financially towards our daughters needs so there are no problems on that front.
I suppose I'm hoping people may also have some positive stories to help cheer me up as well. Thanks for reading.

princessdon

As you have a home your entitlement to benefits is affected.

Could you move into that home and have your interest payments met by benefits? Ie make up the capital difference?

How big is the house you live in now - what is your local housing rate for your area?

How much equity do you have in the home you own?

Do you file SA forms as a landlord

Just a few questions for now.

devon123

If I live in it I don't think it affects benefits as it's deemed to not be an asset? If I can't afford it on IS or whatever then I'll have to sell it. I'll be gutted if I have to as I saved up for the deposit for years to be able to buy my own home.

Also, I've been in receipt of statutory materity pay for about 5 months and I assume that will count against me when making a future claim?

We are renting from my partner's parents so staying here in the long term isn't an option.

I have a reasonable amount of equity. Houses are worth c. 155k and I owe 70k.

I don't make any money as a landlord. The rent is the same as the mortgage.
Thanks for your reply.

princessdon

Ok

I think it will be better if you live in that house (for now). You will be entitled to Income Support - they will pay the Interest (not capital) - but if you are getting maintenance this should be OK.

Then you will get CTC, Council Tax benefit and CB etc

Others will know more

Have you been to one of the calculators and input your circumstances?

princessdon

BTW - Way too late now - but you could have used that negative rent/mortgage to offset your tax whilst working. As after fees/insurance and 10% wear and tear allowance etc.

mikey_bach

If you are still iro of SMP then this may nil the I.S claim as you will have to much income.
When this finishes you can apply and as said if you move back into your own property then you will be able to claim SMI for it..
Help with the mortgage

devon123

Interesting re. the offsetting - I had no idea about that! Oh well.

Anyway, my circumstances are quite complex as I'm yet to get my P45 and so I'm not sure on my earnings/stat mat pay amounts etc for this financial year. So anything I put in will be a guess really.

I'm desperate to hold on to my house. I'm on a fixed term though so god knows what I'll do when that comes to an end. Luckily that's not for another two years though so hopefully I'll have found a job by then.

Thanks for the replies though.

Naf

devon123 wrote: »

If I live in it I don't think it affects benefits as it's deemed to not be an asset? If I can't afford it on IS or whatever then I'll have to sell it. I'll be gutted if I have to as I saved up for the deposit for years to be able to buy my own home.

A point to consider here, then; check what benefits you get if you live in the property, vs. what benefits you would lose if you sold up & rented somewhere else because the capital from the sale would reduce your benefit entitlement.
A middle ground from these would surely be selling this property to buy something smaller and more affordable?


[QUOTE=devon123;55026695I_don't_make_any_money_as_a_landlord._The_rent_is_the_same_as_the_mortgage.[/QUOTE]

There is one possible way I can think to get around this, but I'm not certain it's legit, so someone else will need to confirm.
If you set up as a limited company and transferred the property into the company, still keeping rent=mortgage (although consider maintenance and emergency repairs). So long as you take no income from the company, you may be able to keep the property, but still rent and claim benefits elsewhere.
Please could someone confirm if this is legit or not?

Spamfree_2

For me it would be a no brainer. If I owned another house, I'd be asking the tenants to vacate and I'd be moving in to it.

It's hardly fair to tapayers that HB would need to be claimed for for you to live somewhere else , and you are sitting on a nice little nest egg in terms of the house that you have 70,000 equity in!

devon123

Spamfree - I'm not going to do that. My original posts says I will live in it if I can afford it. If not, I will be selling it. Even if I could do that (transfer to a company etc), I wouldn't from a moral point of view. Thanks for everyones ideas though. I have decent equity as I've been following these boards for sometime and make mortgage overpayments when I can and live within my means. I'm always careful with my money.

Also, I am no longer in receipt of mat pay as I have left my job.

Spamfree_2

If the flat is more than one bedroom could you move into it and get a lodger to share the mortgage?