On UC, selling house

Logan112

We’re on UC, currently limited capability for work. Going to separate and will need to sell the house. If when the house is sold I have over £16,000 equity does this mean that I’ll lose all entitlement to benefits? So I’ll have to use the equity for rent & living expenses until I’m back in work or until the equity runs out?

calcotti

If you intend to use the money to purchase a new home it can be disregarded for six months (or longer if considered reasonable). See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/832009/admh2.pdf

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

To take advantage of this you would require evidence of your search for a new home.

If this is not the case the money will be taken into account.

Logan112

If I’m not in a position to take out a mortgage then the money will be taken into account I assume?

Thank you

calcotti

Logan112 wrote: »

If I’m not in a position to take out a mortgage then the money will be taken into account I assume? Thank you

That’s my understanding.

In your opening post you refer to “... until the equity runs out”. It would be until your capital drops to £16,000. Once at this level you have access to UC again but your monthly UC would be reduced by £4.35/month for every £250 or part thereof above £6,000.

poppy12345

Logan112 wrote: »

If I’m not in a position to take out a mortgage then the money will be taken into account I assume?

Thank you

Yes, you will lose entitlement to UC if you have savings of more than £16,000.

Rubyroobs

If you have entitlement to contributions based ( new style) ESA then you would still be able to claim that.

TELLIT01

If somebody said they intended to use the money towards the purchase of a new home presumably the 6 month disregard would apply even if they didn't end up purchasing a property.

JamoLew

I rather suspect that would fall under the description of fraud.

After the 6 months was up, having not bought a house, you would have to pay back all the money you received at the very lease.

Probably not a wise course of action

calcotti

TELLIT01 wrote: »

If somebody said they intended to use the money towards the purchase of a new home presumably the 6 month disregard would apply even if they didn't end up purchasing a property.

I would assume that a Decision Maker would want to see some evidence of house search but I may be wrong.