deprivation of capital - buying a house?

overparanoid

Hi, complicated issue, my mum passed away last month and I'm her only next of kin. She owned a one bedroom flat outright which is worth £175,000 which after paying everything off would leave me with £160,000 hopefully.

I'm privately renting a 2 bedroom flat and live with my partner and my three children, youngest being 5 weeks old, and between us we claim housing benefit, council tax, child tax credit, job seekers and child benefits. Jsa will be stopped soon anyway as my partner just got a job after being made redundant. His income will be under 11,500 before tax per year.

now with the money from selling the flat I wanted to either move out of London to get a three bedroom house or part buy part rent in London so my partner could keep his job. This was the plan until i found out about deprivation of capital. as it may be a lot of money, its not that much for what we need plus fees so honestly most of it would be gone. I was also hoping if anything was left, to go on to study as well so i could get a decent job to remove the whole benefits situation from my life but this would probably use the rest up and will take time. My question is if i needed to get back on some benefits after all of this, would i be able to or would it be deprivation of capital? it's a lot of money to flutter away on living and this is the best opportunity we will have.

WillowCat

I don't think buying a house is ever deprivation of capital, and I think you have six months when it can be ringfenced (disregarded) as capital for claims if you can show you are buying a house.

£160,000 would get you a nice house in many parts of the country and you wouldn't need to go to an employment blackspot so your partner could seek a new job.

Regarding your study, if you haven't already been to uni you will be able to get student loans to pay for your study and also some living costs if you do a degree, so you won't need to keep money aside for that.

rogerblack

Buying a house you subsequently live in is not DOC.

GirlFromMars_2

Once you have a plan of action you should write to both the DWP and your Local Authority to inform them of your plans for the money, so that a Decision Maker can make a decision about Deprivation of Capital and Disregarding Capital, and whether you will be entitled to continuing/future means tested benefits.

A property that you live in is not counted as Capital.

A property that you don't live in but are actively selling can be disregarded as capital for 26 weeks or longer if appropriate.

Money that you have put aside to buy a property can be disregarded for 26 weeks (or 52? can't remember!) so long as you are actively buying a property and can prove that the money is only for the purposes of buying a property.

If you should choose to buy a Shared Ownership property there are a number of things to consider. Housing Benefit can be paid on the rental portion of a shared ownership property. Shared ownership properties are not subject to the Bedroom Tax, so you can have a larger property than you technically need. Some shared ownership schemes will cover maintenance on the property as part of the rental portion of the scheme, and will carry out repairs to the structure of the property, but most will not, so you will need enough money to maintain the property.

Given your husband's low earnings I personally would take this opportunity to move out of London!

So, even after you inherit your mothers property you may still be entitled to JSA and HB/Council Tax while you are selling/looking for somewhere new to buy. And so far as I understand it Child Tax Credits don't take Capital into account, and neither will Child Benefit.

I have no idea how using the money to fund an education would work in terms of Deprivation of Capital.