Universal credit claim for single mum - property owner

Ldar

Hi.
I am asking this on behalf of a friend.
My friend and her husband separated early last year and they owned a house together which he lives in.
She moved out and rented a flat.

They also own a flat which is being rented out (no profit being made due to amount of mortgage, I believe they either break even or paying over each month even once rent is paid).

The flat she rents is £1200 per month rent and her salary is around £1500. They share custody of their young son (50/50) and she has to survive each month on that small amount of income which is really unsustainable. It’s london prices so it will be impossible to find somewhere cheaper.

Would she be entitled to universal credit?

Thanks all.

WhenIam64

Try one of the benefit calculators to see if you get a clear(er) answer for some of the questions.

https://www.entitledto.co.uk/benefits-calculator/
https://www.turn2us.org.uk/

Any benefits will be affected by the equity in the two properties so that will need to be evidenced and not just calculated.

Perhaps instead of renting, the second property could be used after serving notice on the tenants. This may allow access to Support for Mortgage Interest (https://en.wikipedia.org/wiki/Support_for_Mortgage_Interest)

pmlindyloo

Ldar wrote: »

Hi.
I am asking this on behalf of a friend.
My friend and her husband separated early last year and they owned a house together which he lives in.
She moved out and rented a flat.

They also own a flat which is being rented out (no profit being made due to amount of mortgage, I believe they either break even or paying over each month even once rent is paid).

The flat she rents is £1200 per month rent and her salary is around £1500. They share custody of their young son (50/50) and she has to survive each month on that small amount of income which is really unsustainable. It’s london prices so it will be impossible to find somewhere cheaper.

Would she be entitled to universal credit?

Thanks all.

I suggest that your friend gets some advice from Citizens Advice as with limited information it is difficult to give the correct information.

For example there may be a reason why your friend moved out of the property with a young child rather than stay in the property (which she has the right to do if it is jointly owned)

Since there is also another property involved the financial situation of the couple needs to be sorted out. Plus of course, arrangements about the child etc etc. CA would be able to give advice about this.

As it stands it is possible that her equity in both properties would make her over the capital limit (£16000) for Universal Credit.

However, there are certain disregards of capital. For example, where efforts are being made to sell the properties there may be a disregard for 6 months (or longer)

Your friend definitely needs some professional advice.

In the meantime, is the father of the child paying child support or is he paying the whole of the mortgage on their marital home in lieu of child support?

Certainly she can put in a claim for Universal Credit but doubtless would have to give details of all property owned and rental income received etc etc. It may be worth getting the application in as, I suspect, there may be delays whilst everything is sorted out.

huckster

Words of warning !

Don't submit a claim for Universal Credit until advice has been obtained.

If the friend is claiming any tax credits, this would be ended by claiming Universal Credit. And once someone has choosen to claim UC, they cannot go back to Tax Credits even if they are worse off.

Owning a property you don't live, would mean that any equity they have interest in, would be treated as capital. If this is more than £16k when added to other savings/investments, then this would stop entitlement to Universal Credit. However, as already advised, it is possible to apply for a temporary disregard of capital held in a property that cannot be sold immediately to release funds. The disregard is normally only for 6 months. This is to allow someone time to take actions necessary.

Citizens Advice should be able to advise on benefits and no doubt your friend is already seeking legal advice about the breakdown in relationship, what rights they have etc.