Housing benefit capital confusion

Dabossmum

Hello

I have spent a few days googling and can't find the answer so hope someone may be able to help.

I separated from my husband due to domestic violence and after a year of struggling, decided to move county to be closer to family to help.

I put the house on the market, got an offer and moved into rented in new county in August as new job started in September.

The house sale is due to go through this week and when it does I will have £16900 into my bank account. I had planned to use some to pay debts (£700 credit card and £2200 parents loan for a car as mine died a week ago - was hoping it would last until house sale money came through but it didn't). However, I have read that this could be classes as deprivation of capital. Not sure about the car situation though as if it had died two weeks after the sale, I think it wouldn't count.

If I pay back the debts, I would be eligible for housing benefit. If I don't - although have to pay back parents but HB will just count it as if not paid out - I am £900 over.

However, the cost of running two houses while house has been selling has been a lot so have used all my savings and the beginning of October/end of September bills leave me with a £950 shortfall. I could use the sale proceeds for this but this won't show as all going out of my account until 15th of October. I rang HB he other day just to see if I would be eligible and they started claim from phone call but now worried that I will be over the amount for a few weeks. (When I rang them I didn't know I couldn't pay off debts so reduced capital by that amount which is why they said I was eligible)

My other thought was that I would like to keep most of the proceeds for a deposit on a house in the future - I will never be able to save that amount. So aim to keep around £1300 for deposit. They say that they will disregard for first 26 weeks if I buy somewhere else. But what if I don't find somewhere that I can afford or change my mind? Will they ask for housing benefit of those months back?

As you can see, I am a bit confused. Don't want to make a mistake. As it is, they told me I should have claimed from August and I had no idea I was eligible as thought I wouldn't be as had a house. Now that it is about to sell, so thought I would be eligible, I may not be.

Would you phone and postpone claim until October bills paid or explain situation? And would they count parent loan for car? And what happens if I tell them I want to buy (which isn't a lie) but then can't?

Any help would be great as google not answering. Tried to ring Shelter for advice but lines busy.

Thank you so much

pmlindyloo

I will try and answer with the bits I know! Hopefully Housingbenefitofficer (a regular poster) will see this and give some expert help.

As the council have told you, when you sold your house the capital in it is ignored while you are selling it, for a period of 26 weeks (or longer - this time can be extended). Hopefully they will backdate your HB.

After you have sold it the capital from it is ignored for 26 weeks (or longer - this time can be extended)

Link for these:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236960/hbgm-bw1-assessment-of-capital.pdf

Scroll down to W1.200

As regards the loan and debt then I am unsure - sorry.

If you do not go ahead with buying another house then I am unsure whether they would count paying back the debts as deprivation of capital. Is it likely that you won't buy?

If you are working then it is possible that you won't be entitled to much HB anyway so the loss (if they did count it as deprivation of capital)would not be horrendous and you could then use your savings to supplement your income. You are allowed to use capital for 'normal spending'. £2900 if treated as DOC would be counted as deemed income of £12 a week - so we are not talking about a huge amount of money.

Personally I would pay off the debts when you get your money, look for a house to buy and if it all came to nothing then face the issues when they happen.

You have plenty of time.

dippy3103

Certainly the council I work for would view the car as reasonable. Maybe not the credit card. But even if they said you still possessed the £700 you would be under the capital limit with the car.

Housing_Benefit_Officer

Paying off debts and loans wouldn't be considered as deprivation.

As for disregarding the capital for 26 weeks my Local Authority will only do this if the claimant can prove they are actually going to purchase a new home, ie solicitors letters, mortgage offer, estate agents correspondence. We also look to see if the money has been placed in a separate account and isn't being touched - you would hardly be using the money to purchase a house if you were spending it on day to day living so the money was slowly dwindling. Also if you were unable to raise a mortgage ten it is unlikely you are really going to purchase a property.

At least with my Local Authority we won't accept the claimant just saying the capital is going to buy another property when their financial circumstances show they will be unable to raise a mortgage and have made no effort whatsoever to house hunt.

Now I have said that my previous council used to just disregard the capital for 26 weeks if the claimant just said the money was for a house purchase.