DWP/ UC setting people back financially - mortgage related [Merged]

BristolBelle

I am posting more to vent than anything else, and maybe this will raise some awareness of how short-sighted the DWP are and how they are setting working people back financially rather than helping them.


I separated from my partner last year and we sold our jointly owned house. Because I had to separate our finances my tax credits were migrated over to the Universal Credit system which meant not only a decrease in entitlements but also a five week wait. This meant I had to break the purchase chain and move into the house I intended to buy on a 6 month rental agreement.


I was advised that the DWP would disregard the equity for 6 months to allow me time to purchase a new property for myself and my two sons, who are 1 and 3 years old. The proceeds of the sale were not enough however, after the deposit and agency fees had been paid, to allow me to purchase the house, so I had to find somewhere cheaper.


Unfortunately my claim to Universal Credit was cancelled from 3rd February, on 20th February by Iolanda of Flowers Hill Service Centre, due to the proceeds from the sale of my previous home not being disregarded as per UC policy paragraph 13 of Schedule 10 (capital to be disregarded) of the Universal Credit Regulations 2013 - in the middle of the 2nd mortgage application!


I have applied for a Mandatory Reconsideration, as covered by paragraph 13 of Schedule 10 (capital to be disregarded) of the Universal Credit Regulations 2013, and submitted evidence on 1st March. This was not acknowledged until 15th March on the online journal and I am unable to escalate this matter through the helpline, being told there are no statutory time limits for processing Mandatory Considerations, even though the error was not on my part in any way.


To compound the matter, I am now in a worse situation financially than I would have been had I not claimed UC at all, as I am paying for childcare that was accounted for as being reimbursed at 85% by UC, in addition to the loss of the £130 a month that is my entitlement.
Under the current circumstances I am unable to secure a mortgage for the amount agreed when I made the offer, despite having a large deposit and working 4 days a week, simply because of a totally unnecessary and arbitrary mistake on the part of a DWP individual, ostensibly lacking in knowledge of her own area of jurisdiction, but lets face it, probably acting on a covert directive to save money for the DWP.


I am almost at the end of my six month tenancy and no closer to securing the mortgage I need and I am at risk of homelessness unless I continue renting and ultimately I cannot sustain the costs of renting on a single income with two children without using up the proceeds from the sale of my previous property. This could ultimately means giving up my job and claiming more benefits than I would ever wish to, when all I want is to purchase a property based on what I am actually entitled to!
In both cases I have had to pay legal fees and search fees to purchase properties that have collapsed/ at risk of collapsing - because of matters relating to the policy/ lack of application of policy from the DWP.


I am just so angry at being caught up in their system and I have to take my youngest out of nursery and even in doing so my mortage application would still be declined as it would look I was trying to falsify my income!

calcotti

You may have a case for a complaint and compensation claim. You may also wish to raise the matter with your MP.

https://www.citizensadvice.org.uk/benefits/benefits-introduction/problems-with-benefits-and-tax-credits/complaining-about-bad-service-for-benefits-or-tax-credits/

Chandler85

The first 3 paragraphs are nothing to do with the DWP, they didn't cause the relationship to fail,that is sadly part of life. Nor did they mean you don't have enough money for a new property because of fees, that's part of the way the property market works, solicitors, agents and surveyors are part of the costs.



As bad as universal credit it, they don't just cancel applications. Don't get me wrong they are really picky, so if you do the application form even slightly wrong then your capital will be counted and you end up in the situation you are in.


Assuming though, that you have a valid claim, then you get the money from the date of the claim, so it can be backdated, but you have to still go through the hoops.


If you cannot afford your rent without a top up from previous sale, then you need to rent somewhere smaller until you can get yourself back on the housing ladder.


It might sound harsh but any form of benefit should never be seen as an entitlement, it is an added extra to help with the rubbish wages companies can get away with paying. Benefits can be removed, changed depending on the colour of the government at the time, it seems crazy to me that a mortgage company even lends to people taking them into account, but that's a different matter.


Sadly you'll have to stick it out, jump through the hoops and get your claim sorted. Better to have the ducks lined up before applying for a mortgage though.

BristolBelle

Gosh how patronising.

BristolBelle

Thank you very much for the link, very helpful of you ��

huckster

"I was advised that the DWP would disregard the equity for 6 months to allow me time to purchase a new property for myself and my two sons, who are 1 and 3 years old. "

Who advised you that DWP would disregard equity for 6 months ?

After you advised UC of the capital exceeding £16k, the matter should have been referred to a Decision Maker and it would be up to the Decision Maker whether to disregard the equity or close the claim, because capital exceeded the £16k allowed.

The Decision Maker should have added a decision letter to your journal. Was a decision letter added to your journal ?

If a decision letter was added to your journal stating that the equity would not be disregarded, then it would be correct for the claim to be closed, as the Decision Maker would have requested for this to be done.

You can then submit a mandatory reconsideration, for the decision to be looked at again. There is no time limit for these. If they decide in your favour, the claim can be reopened.

calcotti

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/787441/admh2.pdf

Amount to be used to purchase premises
H2119 Where a person has received an amount within the past 6 months which is to be used to purchase premises that the person intend to occupy as their home, that amount can be disregarded from the calculation of that person’s capital where it
1. is attributable to the proceeds of the sale of premises formerly occupied as their home or
2. has been deposited with a housing association (see H2045) or
3. is a grant made to the person for the sole purpose of purchasing a home1.
1 UC Regs, Sch 10, para 13

Is it reasonable to disregard for longer
H2120 The DM may decide it is reasonable to disregard the amount for a longer period if, for example
1. people have tried but not found premises which are suitable for their or a member of their family's needs (in particular, if one of them is disabled and needs a certain type of accommodation)
2. the person has found premises and the
2.1 sale has not been completed or
2.2 seller later decides not to sell.

huckster

"I separated from my partner last year and we sold our jointly owned house"

I am just wondering whether a UC Decision Maker did decide to disregard capital for 6 months. You would have supplied documents confirming the sale proceeds had been received.

And the OP mentions that they took on a 6 months rental and they had to break the purchase chain. Is this the reason for the UC claim being closed, as they were no longer in the process of buying a property, therefore any 6 month capital disregard would not apply.

It is unclear of what has happened exactly. It seems the reason for the first purchase not going through, was that financially it was not possible. Therefore it was necessary to look for a more affordable purchase option.

If more than 6 months capital disregard was required due to a second purchase attempt, was this subject to a further Decision Maker request ?

calcotti

I think that when a separation has occurred it is inevitable that at least one party is going to have to rent in the interim. That should not affect the disregard. The guidance simply refers to a sum received to be used to purchase a property, it does not specify the source of that sum.

Chandler85

It wasn't meant to be patronising. DWP and a lot of other government agencies are very pedantic, especially when it comes to giving people money even when they actual owe the money. Think tax refunds etc.


The fact remains that sadly you aren't as yet in a fortunate position to buy a house, which is frustrating but if you need the benefit to be paid to be able to live comfortable and afford the mortgage then you need to get that sorted then get a house. Because if the DWP took even longer after you had a mortgage you might miss payments and be in an even worse position.

babyblade41

I think possibly you need to re- work your finances and expectations just a little.. I was in your position many years ago ,long before UC and didn't have any notion of benefits with 2 very young children

Before venturing onto the property ladder again especially if you are doing it solo , you really need to scrutinise every aspect of your financial health as you seem to underestimate many costs .

Personally I would rent somewhere affordable for now, get your finances back on an even keel then see where you are in 12 months

Give yourself some time to get over separation before embarking on all the stress of home owning