Universal credit entitlement when leaving family home - some advice required 29 September 2020 at 10:54AM in Benefits & tax credits 5 replies 161 views

WorthyCandidate

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

calcotti

WorthyCandidate said:

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

I have no idea what you mean by 'home rights'. If the title deeds are in your name she has no equity in the property and therefore it will have no impact on her entitlement to UC.
She can use a benefit calculator to see what she could be entitled to https://www.gov.uk/benefits-calculators

WorthyCandidate

calcotti said:

WorthyCandidate said:

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

I have no idea what you mean by 'home rights'. If the title deeds are in your name she has no equity in the property and therefore it will have no impact on her entitlement to UC.
She can use a benefit calculator to see what she could be entitled to https://www.gov.uk/benefits-calculators

Thanks, what I mean is that when the divorce goes through, she will be entitled to half of whatever equity is in the property.

calcotti

WorthyCandidate said:

calcotti said:

WorthyCandidate said:

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

I have no idea what you mean by 'home rights'. If the title deeds are in your name she has no equity in the property and therefore it will have no impact on her entitlement to UC.
She can use a benefit calculator to see what she could be entitled to https://www.gov.uk/benefits-calculators

Thanks, what I mean is that when the divorce goes through, she will be entitled to half of whatever equity is in the property.

Why, if the deeds and mortgage are only in your name? What she is entitled to will depend on the terms of any divorce settlement and that is not known at this stage. If the property was in joint names it would be clear that some of the equity belonged to her but that is not the case.
If she gets a sum of money as a result of the divorce settlement (which I hope she will) that will affect her UC entitlement. Over £6,000 will reduce the benefit payable by £4.35/month for every £250, or part thereof. Over £16,000 will end the UC entitlement.

WorthyCandidate

calcotti said:

WorthyCandidate said:

calcotti said:

WorthyCandidate said:

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

I have no idea what you mean by 'home rights'. If the title deeds are in your name she has no equity in the property and therefore it will have no impact on her entitlement to UC.
She can use a benefit calculator to see what she could be entitled to https://www.gov.uk/benefits-calculators

Thanks, what I mean is that when the divorce goes through, she will be entitled to half of whatever equity is in the property.

Why, if the deeds and mortgage are only in your name? What she is entitled to will depend on the terms of any divorce settlement and that is not known at this stage. If the property was in joint names it would be clear that some of the equity belonged to her but that is not the case.
If she gets a sum of money as a result of the divorce settlement (which I hope she will) that will affect her UC entitlement. Over £6,000 will reduce the benefit payable by £4.35/month for every £250, or part thereof. Over £16,000 will end the UC entitlement.

Thanks, that is helpful. I did read that UC take into account 'notional capital' i.e. an asset that she has an interest in that will be realised in due course and could be realised sooner. I am just try to get as much info as possible before she goes and signs a private lease - in case she then finds out that she has been refused UC!

calcotti

WorthyCandidate said:

calcotti said:

WorthyCandidate said:

calcotti said:

WorthyCandidate said:

Hi Folks, be really grateful for some advice from someone more familiar with UC entitlement. My wife wants to split and leave the family home which I will continue to live in for a while. We are doing this on good terms and I was wondering if she would be entitled to UC to assist her with a private rent and living costs (she works part-time) even though the family home she is leaving has some equity. The title deeds and mortgage are both in my name but obviously she has home rights. Thanks.

I have no idea what you mean by 'home rights'. If the title deeds are in your name she has no equity in the property and therefore it will have no impact on her entitlement to UC.
She can use a benefit calculator to see what she could be entitled to https://www.gov.uk/benefits-calculators

Thanks, what I mean is that when the divorce goes through, she will be entitled to half of whatever equity is in the property.

Why, if the deeds and mortgage are only in your name? What she is entitled to will depend on the terms of any divorce settlement and that is not known at this stage. If the property was in joint names it would be clear that some of the equity belonged to her but that is not the case.
If she gets a sum of money as a result of the divorce settlement (which I hope she will) that will affect her UC entitlement. Over £6,000 will reduce the benefit payable by £4.35/month for every £250, or part thereof. Over £16,000 will end the UC entitlement.

Thanks, that is helpful. I did read that UC take into account 'notional capital' i.e. an asset that she has an interest in that will be realised in due course and could be realised sooner. I am just try to get as much info as possible before she goes and signs a private lease - in case she then finds out that she has been refused UC!

Notional capital means something else, but that’s is beside the point.
if her name was on the deeds then some of the equity would indeed be treated as hers - but rules allow it to be disregarded for six months. In this case she has no legal title so has no equity anyway. The terms of a future divorce settlement are not known and cannot therefore be taken into account now.