Property Inheritance and Benefits

calcotti

Alice_Holt wrote: »

Of course, (as you say) once the property is sold the proceeds are not disregarded. This would indeed be different to the disregard allowed to proceeds from a sale of a family home where the intention is to use it for the purchase of another property intended for occupation as the family home.

Thanks for your post, Alice.

Your last paragraph raises an interesting question as to whether a DM will consider it reasonable in all the circumstances for OP to use the inherited property sale proceeds for the purchase of a property. I think in a case like this buying a house to live in is unlikely to have as a significant purpose a desire to obtain or increase UC entitlement. Indeed buying a house will remove the housing element from the existing UC award. If the capital were retained OP would have no UC entitlement but would have to spend capital and could well end up reliant on benefits again in the future. By buying a house they will also be releasing a Council house.

OP, you are entitled to ask the DWP in advance if they consider it reasonable for you to spend the inheritance, when it becomes available, on buying a property.

Alice_Holt

calcotti wrote: »

... whether a DM will consider it reasonable in all the circumstances for OP to use the inherited property sale proceeds for the purchase of a property. I think in a case like this buying a house to live in is unlikely to have as a significant purpose a desire to obtain or increase UC entitlement. Indeed buying a house will remove the housing element from the existing UC award.

Yes, I would agree with your opinion.

I'm not sure if there is any case law or precedent on this for either UC or ESA. I'd be very interested to hear if there is, should any forumites be aware of such cases.

TELLIT01

Alice_Holt wrote: »

Just to clarify.
ESA Sch 9 para 2 of the ESA regs section 6 provides:
"6. Any premises where the claimant is taking reasonable steps to dispose of those premises, for a period of 26 weeks from the date on which the claimant first took such steps, or such longer period as is reasonable in the circumstances to enable the claimant to dispose of those premises."

Note the reference to "Any premises", in other sections it specifically refers to "premises which the claimant intends to occupy as the home", or "premises formerly occupied by the claimant ". So, I think it safe to say that capital held in an inherited house which an ESA claimant is taking steps to sell can be disregarded for 26 weeks.
http://www.legislation.gov.uk/uksi/2008/794/schedule/9/made

This seems to me, to be the ESA equivalent of para H2115 and the UC Regs, Sch 10, para 6 which calcotti posted.

Of course, (as you say) once the property is sold the proceeds are not disregarded. This would indeed be different to the disregard allowed to proceeds from a sale of a family home where the intention is to use it for the purchase of another property intended for occupation as the family home.

Either the "Any premises" section has been added in recent years, or the rules were wrongly interpreted by all DMs when I worked on ESA. I worked on ESA from its beginning for about 5 years and at that time the only disregard was for proceeds of sale of the family home when that money was intended to be used to purchase a new property.
The rules as outlined above seem a far fairer way of doing things.

jackhayes

xylophone wrote: »

So she didn't own it outright? The legal ownership lay with the Trustees and the beneficial ownership with you?

Are you saying that the property was left to you fifty years ago but your mother had an interest in possession as Life tenant?

It was set up under a settlement by my grandmother. My mothers name is on the deeds and the terms of the settlement allowed her to sell the house and buy other property but it would become mine upon her death - she couldn't give it away or sell it and use the capital or leave it to someone else. The property has only become mine upon her death.

jackhayes

calcotti wrote: »

Thanks for your post, Alice.

Your last paragraph raises an interesting question as to whether a DM will consider it reasonable in all the circumstances for OP to use the inherited property sale proceeds for the purchase of a property. I think in a case like this buying a house to live in is unlikely to have as a significant purpose a desire to obtain or increase UC entitlement. Indeed buying a house will remove the housing element from the existing UC award. If the capital were retained OP would have no UC entitlement but would have to spend capital and could well end up reliant on benefits again in the future. By buying a house they will also be releasing a Council house.

OP, you are entitled to ask the DWP in advance if they consider it reasonable for you to spend the inheritance, when it becomes available, on buying a property.

We want to move away from council property and buy our own home and as you say the housing element will be removed from our UC award and we will be freeing up a council property.