Housing benefit after house sale forced through divorce?

tim123456789

theartfullodger wrote: »

Usually because (clearly not in this case...) someone is on the fiddle, possibly both people...

Sometimes because they trust each other !

But it's not just a question of trusting each other.

You need documentary evidence of the situation should the worst happen and the person who you have lent the money to dies intestate (or becomes senile and goes into a care home).

If that happens, without the necessary documentation, you will be getting zip all back (unless you just happen to be the residual inheritor)

tim

somethingcorporate

I don't think money moving between accounts is going to be substantial enough to suggest the money was not a gift. In fact, it would look exactly what a gift looks like and between friends/family a judge would be forced to conclude this was a social arrangement rather than a business one (i.e. a gift rather than a loan) unless you have something to suggest otherwise.

I'd expect a local authority to take exactly the same stance that you will need to prove that it was not a gift if you expect to be able to claim benefits.

BigAunty

Deprivation of capital rulings are made on a case by case basis so all you can do is prepare your defence now for the worst case scenario of a local council rejection of your HB claim on those grounds.

See if you can dig up the DWP deprivation of capital Decision Makers guides on the internet which are the staff manuals and can highlight to you what they look for as they investigate. There should be plenty of info on the internet about DoC and how the authorities investigate and make their rulings. They are looking for intentional abuse of the system.

My recollection of the repayment of debt from those docs is that they are particularly against the repayments of debts for loans earlier than their terms and they look for evidence that they are paid back when required, rather than prematurely (such as using a lump sum to pay down a mortgage early, for example, would be my guess at the type of scenario that they dislike).

They aren't against the repaying of debts per se, but you have hampered your case by not having any written proof of the terms of the loans made to you, nor particularly good proof that you were lent money.

Note that capital over 6k start to reduce means tested benefits like housing benefit, council tax benefit, income support, while sums over 16k rule them out.

Thegirl

Ask the benefits office. I don't mean that to sound mean, I just don't think you'll get the correct answer without speaking to them. You are allowed to use the money to repay debts and if this brings you below the threshhold then you can claim benefits. And you are able to show the relative has given you money. Only the benefit office would be able to tell you if this is enough.
Although, my personal uninformed opinion, it would also depend upon why they gave/leant you the money. For a deposit, yes could easily suggest loan repayable when the house sells, if to pay the bills/debt, shady, as has already been pointed out, how would you have repaid this without the sale of the house so would suggest gift.

JimmyTheWig

I guess the question is, what would you do if someone could tell you right now that it would be classed as deprivation of assets?
Would you still pay the money back to your relative anyway?

If not (and I'm guessing that's the reason that you are asking), I think you have just proven that you don't _need_ to pay this money back to your relative from the sale of the house proceeds.
The fact that you are asking the question means that it is DoC.

patch2000

Some useful comments thanks.

Not necessarily JimmyThe Wig- that's an assumption without knowing the full story. It won't be a huge amount after divorce but would take savings over the threshold. It is a question of trying to do the right thing to pay money back and survive as best we can a single parent. In terms of other debts like credit cards it does seem mad they would insist you carry on paying monthly.

JimmyTheWig

patch2000 wrote: »

Not necessarily JimmyThe Wig- that's an assumption without knowing the full story.

Absolutely. I'm just trying to look at it as the benefits people might look at it.

It is a question of trying to do the right thing
...
In terms of other debts like credit cards it does seem mad they would insist you carry on paying monthly.

It would be even more mad if they let you pay off the full balance and then gave you more money each week because of it. That wouldn't be the right thing at all.

steppevos

patch2000 wrote: »

It won't be a huge amount after divorce but would take savings over the threshold. It is a question of trying to do the right thing to pay money back and survive as best we can a single parent. In terms of other debts like credit cards it does seem mad they would insist you carry on paying monthly.

What you do with your 'protected' savings is your decision. I assume it would not be a problem to pay off these loans and the credit cards at the understanding that this come out of the protected £16000 savings, but you may have to eat up the amount between the cash left from the house sale and the £16000 before you can apply for benefits (so ultimately you would be left with £16000 minus loan(s) and credit card debts); or you may be lucky and the benefit office accepts the pay-off of the loan(s), but not the credit card debts.

BigAunty

JimmyTheWig wrote: »

...


It would be even more mad if they let you pay off the full balance and then gave you more money each week because of it. That wouldn't be the right thing at all.

Deprivation of capital is a very complex area and I'm not an expert. However, I've never seen any specific guidance that directly says that it's wrong for a claimant to pay off a credit card balance in a single payment. The only guidance I've seen has been general and it was along the liens of not paying off loans early but when legally due. Whether a claimant has to pay just the minimum sum on a card balance due, I don't know but I can't see why the whole sum isn't considered legally due.

The OPs main problem is that the benefits authorities are suspicious when someone with capital seems to have given it away to a friend or relative, plus the absence of provable terms of repayment of that loan. It is up to the council/dwp to show that there was intentionality on the part of the claimant.

All the OP can do is make a case if there is an investigation and see what the council says - they aren't going to get written approval on their intended decision in advance from them, that's for sure, as I think they tend to review things on a case by case basis afterwards rather than providing guidance on approved spending by claimants beforehand.

patch2000

Thanks BigAunty and others more useful comments that help to think around it