Income related esa and deprivation of capital

ITISWELL

Hi, I've been re-directed to this forum in the hope that someone may be able to help me. I'd really appreciate any advice or words of wisdom! Thank you.
I am currently in receipt of income related ESA.
My husband and I are separated and he moved out 2 years ago.
We are in the process of selling the FMH (former matrimonial home).
I am looking to buy a smaller, more affordable property, closer to family for support.
My children, aged 15 and 16, from my previous marriage, live with me.
After costs of sale, my proceeds from the sale of the house will be approx £120,900.
I intend to put £92,500 from this as a deposit on my next home and take out a mortgage for £92,500.
My costs for solicitors, removals and stamp duty etc. are approx £6,300.
I intended to pay off my credit card debts of approx £18,600, through the solicitors on completion.
And intend to keep approx £3,500 in my account.
The ESA enquiry line tell me I can do whatever I like with my own money; however I may not be entitled to any payment of ESA if I pay off my credit cards, as they will most likely view this as deprivation of capital.
I need to repay the credit cards in order to qualify for the mortgage.
Does anyone have any advice please?

calcotti

To be deprivation of capital you have to have done it for the purpose of qualifying for benefit. If you can get something in writing confirming that it is necessary for you to pay off the credit cards in order to qualify for the mortgage it seems to me that would be a clear indication that paying off the credit cards was not done for the purposes of qualifying for benefit. You are clearly doing it in order to secure a roof over your head to replace the one you are losing as a result of your separation.

WillowCat

I agree with the poster who says that if paying off the credit cards is a condition of the mortgage then this should be seen to be acceptable (but can't be guaranteed).

However the rules ARE different for UC , where it is perfectly acceptable to pay off debts and it not be considered deprivation of capital.

So you could decide to make a UC claim if you are in a full service area - and I think everywhere is due to be full service by the end of this year.

The only possible issue is if you currently get PIP and get the severe disability premium on ESA as this is currently not payable on UC. There is legislation ongoing which will compensate for this, though unless it's changed in review the compensation is not the full amount if you are in the LCWRA group in UC (equivalent of support group in ESA).

Nannytone

It is all totally irrelevant.
You are on income related benefit no one will give you a mortgage

calleyw

Nannytone wrote: »

It is all totally irrelevant.
You are on income related benefit no one will give you a mortgage

not necessarily true. But they wont get one for £92K if there only income is benefits


Yours


Calley X

[Deleted User]

Nannytone wrote: »

It is all totally irrelevant.
You are on income related benefit no one will give you a mortgage

I would have to agree, and would add of course that SMI is also now a loan not a benefit