Eligible for Tax Credits but not Universal Credit? Very worried.

kyte

I'm divorcing my husband and am negotiating the financial stuff. Naturally, he'll want me to claim any benefits I'm entitled to, but I'm concerned that when universal credit is rolled out, I won't be entitled to anything.

I'm looking to get back to work, (p/t because of the children), earning between £9-12k. My work provides a house as a requirement of the job. If I get back into this work, I will want to buy a house with my share of the current house capital, to ensure that I have a home for my children in case my work contract isn't renewed (5yr term) in the future.

Under the current system, I would qualify for tax credits and working tax credits.

It looks like under universal credit, I would get nothing because of having house capital, but not living in the house?

This has big implications for the divorce financial settlement. I'd love some help/advice,please?

tomtontom

Will you be letting out the house, and getting an income from it?

sammyjammy

kyte wrote: »

I'm divorcing my husband and am negotiating the financial stuff. Naturally, he'll want me to claim any benefits I'm entitled to, but I'm concerned that when universal credit is rolled out, I won't be entitled to anything.

I'm looking to get back to work, (p/t because of the children), earning between £9-12k. My work provides a house as a requirement of the job. If I get back into this work, I will want to buy a house with my share of the current house capital, to ensure that I have a home for my children in case my work contract isn't renewed (5yr term) in the future.

Under the current system, I would qualify for tax credits and working tax credits.

It looks like under universal credit, I would get nothing because of having house capital, but not living in the house?

This has big implications for the divorce financial settlement. I'd love some help/advice,please?

You are correct, in the circumstances you describe you wouldn't be entitled to Universal credit.

Remember that it will be some time before UC for existing Tax credit customers is rolled out and you would have a period of time where you were protected from the change in rules as long as you weren't to have any change of circumstances. At present we don't know what the time frame of that protection would be.

kyte

I haven't decided whether to let it or not...I may need it as a bolthole Obviously if i did let it,it would count as income and I'd expect that to affect things. What I'm concerned about is that it seems to say that if you have any capital over £6k, including a property you don't live in, you'll not qualify.

Even if I did let it out (very small amount), under the current system, I would still qualify for some tax credits and also full child benefit.

My husband would take that into account for our settlement, but I'm worried that I'd suddenly find myself in a very difficult position, worse off overall, than people earning a lot (even with my potential rental income included) more but living in their own home.

kyte

sammyjammy wrote: »

You are correct, in the circumstances you describe you wouldn't be entitled to Universal credit.

Remember that it will be some time before UC for existing Tax credit customers is rolled out and you would have a period of time where you were protected from the change in rules as long as you weren't to have any change of circumstances. At present we don't know what the time frame of that protection would be.

Would I still qualify for the transitional protection if I have more than £6k capital? That's what isn't clear to me.

Horseunderwater

Under current means tested benefit rules the capital amount over £6k is taken into account at a rate of £1/£250 or part thereof upto £15999, then when you hit £16k you lose that benefit. That is or will be the rule for new claimants? - however for existing claimants like you there will be transitional protection in place that would apply the current rules, where no capital is taken into account & only other income over £300 is declared, such as interest or a pension for example is used. They may be changing the income deduction rule to a %age - namely a rate of 65% as for housing benefit now. Which if that is the case is significantly higher than the current 41% now. It would only come into force if you changed jobs, got a new partner though as that is normally what happens in TP cases. Whether a diff ruling party would change it who knows? But there will be big changes to come.

mummyroysof3

I would say you are worrying over future circumstances you have no control over. Do you have to live in property work says, cos if you live in house you own it solves that issue doesn't it? My advice would be to focus on circumstances as they stand now and get through that first.

rogerblack

How old are the children?
In principle, if you could get a very, very close house, you could use the two houses as one, and they would both count as a single residence.

If the tied house is not directly relevant to the work (there's no good reason for someone to need to be on site, ...) - then have you considered asking the employer if you can purchase it?

danielanthony

What if the benefits system changes dramatically in the next 5 years too? There's an election next year and nearly two TRILLION POUNDS in debt to pay off so I would not rely on the government for your living expenses!

stevemLS

I just don't understand why you would even think you could get public money for this