Benefits, inheritance & buying a house? So confused!

TELLIT01

FBaby wrote: »

Really? Never come across a case of a single person on full benefit deciding to buy a large 3 bedroom house beyond their needs with the intention to rent the other two rooms? Or are you saying that even in this instance of intending to make it a business, it would have been granted? This is an example, but I find it hard to believe that EVERY requests made during that period of time would have been deemed acceptable.

In that scenario the person purchasing the property would in all likelihood lose entitlement to IR benefits due to the income from the rental.

Housing_Benefit_Officer

TELLIT01 wrote: »

It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
I don't believe that using the money to purchase a property to live in would considered deprivation of capital.

It's actually in the legislation. I helped someone on here before with exactly the same query. I will try and find a link to the legislation.

Housing_Benefit_Officer

TELLIT01 wrote: »

It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
I don't believe that using the money to purchase a property to live in would considered deprivation of capital.

Here we go - tucked away in a guidance manual...

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626754/dmgch29.pdf

Did people say what they were going to do with their capital
29843 Claimants or partners have not deprived themselves of capital for the purpose of
getting benefit or more benefit if they
1. say exactly what they are going to do with their capital and
2. are told by an officer of DWP it will not affect the amount of benefit they can
get and
3. do what they said they were going to do with their capital.


So a scenario...

Dear DWP, I'm going to blow my £250,000 inheritance on high class hookers and loads of drugs - is that deprivation of capital? Lots of love claimant xxx

Dear claimant, No it isn't deprivation of capital. You may spent your £250,000 on the best hookers and drugs and it wont affect your benefits, yours DWP.

A few months later it is discovered it is deprivation but there is nothing the DWP can do as the claimant was incorrectly informed by the DWP in writing that it was OK to blow their inheritance on drugs and prostitutes.

However if they blew their inheritance on fine wines and fancy hotels and meals at the best restaurants then it would be classed as deprivation. The claimant has to state exactly what they are going to do with their money. The DWP have to say it is OK to do exactly what they say. They have to exactly spend their money as they have stated.

If the claimant says I'm buying a house, the DWP say it's OK to buy a house and they then buy a house - it isn't deprivation even if the advice was wrong - hence getting something in writing before they do it.

TELLIT01

Interesting info HBO. From my experience of working on ESA, DM's were extremely reluctant to provide answers to what at the time would be hypothetical questions. The section you have posted clearly shows that they should be prepared to answer such questions.

Jaxxy31

Hi, I know this is an old post but wondered if you had any advise.

We used to claim housing benefit and tax credits up until 2 months ago. I’ve now started a job and my dad is going to gift us a deposit to get the mortgage.

Is this okay to do? The solicitor has asked for our bank statements but I’m worried she’d going to see we were on benefits and suggest we’re not allowed to purchase?

[Deleted User]

No problem you just need to prove where your deposit came from and prove it I sa gift not a loan.

KatrinaWaves

It’s normally best for you to start your own thread, as your situation is very different.

The solicitor has no say in this. It MAY cause issue with your mortgage if they don’t consider your employment secure enough, but you’d have to check.

Pollycat

Jaxxy31 wrote: »

Hi, I know this is an old post but wondered if you had any advise.

We used to claim housing benefit and tax credits up until 2 months ago. I’ve now started a job and my dad is going to gift us a deposit to get the mortgage.

Is this okay to do? The solicitor has asked for our bank statements but I’m worried she’d going to see we were on benefits and suggest we’re not allowed to purchase?

Definitely best for you to start your own thread, Jaxxy, as some people will only read the first post and then comment on that and ignore your question.

Just click on the blue button on the left hand side of the screen that says 'New Thread' and copy and paste your question.

To comment on your question:
it will be the potential mortgage provider who will decide if they will give you a mortgage.
This will depend on your income.
I don't know how far back they will want to go with proof of income.

Winston1964

Hello, I'm in a similar situation I'm in receipt of ESA (CB) and in the support group, Universal Credit housing element and CTB and PIP. privately rent a home which I have to add to the housing element as it is more. I am due inheritance in a few months of maybe 80k. I want to know if i can keep any of my benefits and if the 80k could be used as a deposit to buy a house in my son's name that I could then rent so I had security of a home for life. Or if this is seen as deprivation of capital? If so what can i reasonably be allowed to spend the money on? New household items? Moving to be closer to my son for support? A new second hand car as mine is now 14years old. Thanks for any advice.

TELLIT01

Winston1964 wrote: »

Hello, I'm in a similar situation I'm in receipt of ESA (CB) and in the support group, Universal Credit housing element and CTB and PIP. privately rent a home which I have to add to the housing element as it is more. I am due inheritance in a few months of maybe 80k. I want to know if i can keep any of my benefits and if the 80k could be used as a deposit to buy a house in my son's name that I could then rent so I had security of a home for life. Or if this is seen as deprivation of capital? If so what can i reasonably be allowed to spend the money on? New household items? Moving to be closer to my son for support? A new second hand car as mine is now 14years old. Thanks for any advice.

You really should start a new topic as everybody has slightly different circumstances and replies will get mixed up and become confusing.
In answer to your question though, you could not give your inheritance to your son without any Income Related benefits being affected. It would be classed as deprivation of capital.
ESA Conts and PIP are not affected by the inheritance and you would keep those. Income related benefits would cease.

You can replace old household items and the car, be sure to retain receipts and don't buy top of the range items. As you mention "A new second hand car" I don't think that is your intention.