Possible benefits in complicated situation

Jenniefour

A very long standing friend of mine, aged 67, left her marriage of over 40 years over 4 years ago. I offered her a place to stay in my home until such times as the finances re properties were sorted out and she would then either be able to rent or buy. Her only income is her basic state pension of just over £600 per 4 weeks. She doesn't pay any rent/bills but she contributes by buying some food and household essentials.

One of the problems has been that she has allowed her husband, for most of their marriage, to completely control all the finances and, although she has seen her solicitor twice now about a financial settlement she has backed off both times as she does not want to "upset" him. Her husband is a tremendous bully - not physically violent but mentally cruel e.g. not speaking to her for weeks on end.

Another issue is that they jointly own a rental property, ex council, the estate is going to be redeveloped, so the flat is under a compulsory purchase order. The money will be paid out in a couple of months and it is likely she will get her half share of this. (She has had no income from this - the rent goes on paying the mortgage and other expenses on the flat and the mortgage and expenses on the marital home.). However, since she will not pursue a legal financial settlement, she is at his mercy as to whether she will ever get her share of the matrimonial home. He still lives there and wants to stay there but probably does not have enough money to buy her out. Neither does he have to if there's no legal steps being taken.

When she moved in neither of us imagined she would be here over 4 years but the flat, coincidentally coming under a CPO shortly after she left, is the main reason why. I am, and have been, more than happy to provide her with a home, we have been good friends for 45 years, but she now needs to plan her own independent future because I do not want to carry on much longer with this arrangement.

What I want to know is how do the DWP take into account someone's share of a property that has not realised i.e. they don't have the money for it. My friend will not be able to buy without the money from her half of the matrimonial home. She would be able to rent but her capital would gradually be dwindling as her pension would not even cover the basic rental of a studio flat. What would be her benefits situation? I think, and I may be totally wrong, that benefits folks would count all assets which should be hers even if she does not have that money in her bank account. Is that correct?

Grateful for any information so I can let my friend know.

annandale

Is she going to get this share or not?

Is there a reason why she hasn't been claiming any other benefits until now?

Unless there are dwp staff who post on the page I'd suggest she sees citizens advice

poppy12345

annandale wrote: »

Unless there are dwp staff who post on the page I'd suggest she sees citizens advice

Why would the OP need DWP staff to post on the forum when there's perfectly good and some very knowledgeable people that always post. DWP isn't always the best people to ask for advice anyway.

Mojisola

Jenniefour wrote: »

One of the problems has been that she has allowed her husband, for most of their marriage, to completely control all the finances and, although she has seen her solicitor twice now about a financial settlement she has backed off both times as she does not want to "upset" him. Her husband is a tremendous bully - not physically violent but mentally cruel e.g. not speaking to her for weeks on end.

She isn't living with her husband so it doesn't matter if he doesn't speak to her ever again.

She can either decide to live on her basic pension or she can let her solicitor get on and sort out her share of the matrimonial assets.

I know it's very difficult breaking away from an abusive partner but it's also very liberating and empowering when you do.

He doesn't control her any more - all communication can be between their solicitors.

Jenniefour

annandale wrote: »

Is she going to get this share or not?

She is certainly going to get her share from the ex council flat - that will not buy anything. But very iffy, unless she pursues it legally (which I think she should and have said so) as to whether she will get her full share (or perhaps anything) from the marital home.

Is there a reason why she hasn't been claiming any other benefits until now?

When she moved in we used a benefits calculator and it said she was entitled to nothing. Probably, at least in part, because in theory she should have been receiving half the rent from the flat (after deducting interest on mortgage, service charge etc) but this was going straight to paying the mortgage, council tax etc on the marital home. How they used the rental income from the flat did not change when she left and, again, she did not want to upset him.


Unless there are dwp staff who post on the page I'd suggest she sees citizens advice

Thanks for your response - Citizens Advice sounds like a really good idea.

xylophone

although she has seen her solicitor twice now about a financial settlement she has backed off both times as she does not want to "upset" him.

Stiffen your friend's backbone - tell her to take her solicitor's advice (she's paying him presumably!) and sort out the financial settlement.

The only answer to a bully is to stand up to him (with the force of law if necessary).

Her only income is her basic state pension of just over £600 per 4 weeks.

I am afraid that this is not the case as the rent from the jointly owned flat is income and (in circumstances described below) should have been declared to HMRC - it is immaterial that it is used to pay the mortgages on the flat, the matrimonial home and other expenses.

https://www.gov.uk/renting-out-a-property/paying-tax

There will almost certainly be CGT payable on the sale proceeds of the flat.

Your friend will have capital from the sale of the rented out flat - this will be taken into account in any application for means tested benefits.

You need to explain to your friend that you are no longer prepared to continue with the current arrangement and that she needs to take steps to sort out her life.

pmlindyloo

Jenniefour wrote: »

A very long standing friend of mine, aged 67, left her marriage of over 40 years over 4 years ago. I offered her a place to stay in my home until such times as the finances re properties were sorted out and she would then either be able to rent or buy. Her only income is her basic state pension of just over £600 per 4 weeks. She doesn't pay any rent/bills but she contributes by buying some food and household essentials.

One of the problems has been that she has allowed her husband, for most of their marriage, to completely control all the finances and, although she has seen her solicitor twice now about a financial settlement she has backed off both times as she does not want to "upset" him. Her husband is a tremendous bully - not physically violent but mentally cruel e.g. not speaking to her for weeks on end.

Another issue is that they jointly own a rental property, ex council, the estate is going to be redeveloped, so the flat is under a compulsory purchase order. The money will be paid out in a couple of months and it is likely she will get her half share of this. (She has had no income from this - the rent goes on paying the mortgage and other expenses on the flat and the mortgage and expenses on the marital home.). However, since she will not pursue a legal financial settlement, she is at his mercy as to whether she will ever get her share of the matrimonial home. He still lives there and wants to stay there but probably does not have enough money to buy her out. Neither does he have to if there's no legal steps being taken.

When she moved in neither of us imagined she would be here over 4 years but the flat, coincidentally coming under a CPO shortly after she left, is the main reason why. I am, and have been, more than happy to provide her with a home, we have been good friends for 45 years, but she now needs to plan her own independent future because I do not want to carry on much longer with this arrangement.

What I want to know is how do the DWP take into account someone's share of a property that has not realised i.e. they don't have the money for it. My friend will not be able to buy without the money from her half of the matrimonial home. She would be able to rent but her capital would gradually be dwindling as her pension would not even cover the basic rental of a studio flat. What would be her benefits situation? I think, and I may be totally wrong, that benefits folks would count all assets which should be hers even if she does not have that money in her bank account. Is that correct?

Grateful for any information so I can let my friend know.

The benefit (currently) that she may be eligible for is Pension Credit. This would 'top up' her weekly income to £163 per week (£652 per 4 weeks) so it is important to know exactly what her state pension is - you say 'just over £600 per 4 weeks?

A claimant can have £10000 in savings when claiming Pension Credit.

Any amount over £10000 will be counted as income at the rate of £1 for every £500 over the £10K and will reduce any PC award by that amount.

An award of Guarantee Pension Credit would automatically entitle her to the one bed rate of local housing allowance if she rented a property - you can look up the amount on the local council website.- and full council tax reduction as she is over state pension age.

Now for the marital property.

Without going into the benefit of making a clean break from her husband both emotionally and financially I have found this from the decision maker's guide on Pension Credit.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/690030/dmgch84.pdf

scroll down to 84442

It basically says that if a house is occupied by someone who is of state pension age then the capital is disregarded.

Now this is contrary to other means tested benefits where they would disregard the capital for 6 months (sometimes longer) while the assets (iincluding capital in the house) was sorted out, including forcing a sale through a solicitor.

I would be glad if someone could read the link and make sure I am reading it correctly

It may be that the compensation money would mean that she was not entitled to Pension Credit anyway.

If you give us the exact amount of state pension per week and the amount of compensation we could hopefully work it out.

Jenniefour

Mojisola wrote: »

She isn't living with her husband so it doesn't matter if he doesn't speak to her ever again.

She can either decide to live on her basic pension or she can let her solicitor get on and sort out her share of the matrimonial assets.

I know it's very difficult breaking away from an abusive partner but it's also very liberating and empowering when you do.

He doesn't control her any more - all communication can be between their solicitors.

I agree with everything you've said. I think she's not quite there yet with understanding how liberating it would be to pursue a legal settlement - she sees it as some odd version of her persecuting him by taking him to court. I explained to her if he refused to settle and it had to go all the way, that's his choice. I think his pride would prevent him from holding out to the last. But he did put her off the last time she saw the solicitor (who then wrote to him) by saying "What, don't you trust me?". Well, no, she doesn't but she's still vulnerable to his manipulative behaviour at times. They see each other because of their involvement with their grandchildren.

I have also suggested (many times) she go and see a counsellor or therapist. As she herself says, she has a stubborn streak, which might also be getting in the way.

xylophone

I agree with everything you've said.

Then don't facilitate your friend's burying her head in the sand and making excuses?

because I do not want to carry on much longer with this arrangement.

How long is "much longer"? Give your friend a deadline and stick to it?

annandale

I mentioned the dwp because it's a benefits issue. I mentioned the cab because I believe they can do a benefits check as well.

And yes. There are some very knowledgeable people on the boards but given that this is a benefits issue a phone call to the dwp might help get answers.

Jenniefour

xylophone wrote: »

I am afraid that this is not the case as the rent from the jointly owned flat is income and (in circumstances described below) should have been declared to HMRC - it is immaterial that it is used to pay the mortgages on the flat, the matrimonial home and other expenses.

https://www.gov.uk/renting-out-a-property/paying-tax

There will almost certainly be CGT payable on the sale proceeds of the flat.

Thanks - I know, so does she, that this rental income (even though she's not actually receiving it) is counted as income for her - hence she can't claim benefits. Tax is being paid - her husband's accountant sorts out both his and her tax, husband pays any tax liability of hers as well and they are aware of the capital gains tax liability.

You need to explain to your friend that you are no longer prepared to continue with the current arrangement and that she needs to take steps to sort out her life.

That's the conversation we're having - I have made clear, in a diplomatic way, that she needs to drive things forwards and take concrete steps about securing her own future. Thanks for your reply. I think it's clear that the only way forwards here is to keep reminding her that she needs to get on with things, and I need to be prepared for her to make poor choices if she won't get back to her solicitor. Poor choice is go and live with disturbed daughter who also bullies her.