Divorce Settlement and Universal Credit

daffodil73

Hi I’m looking for some advice please. I’m currently a single parent of four on universal credit and a full time caregiver for my disabled child. Living in a 4 bed private rented accommodation and I get housing benefit. My two adult children (21 and 24) still live at home and are not in a financial position to move out. Currently going through a divorce and it’s looking likely I will be entitled to a 50% equity in a house and pension order. Not a life changing amount of money but I am looking to get around £35 - £40k 

my mortgage capacity is nil. So I can’t use the settlement as a deposit for housing. I need a 5 bed house until my eldest move out and am currently using the front room as a bedroom. We are living in quite a crowded home with one bathroom and one living room. 

I’m wondering if accepting the settlement may actually be detrimental to myself as it will mean I loose my benefit entitlement. I have currently 2k of debt I want to pay off, and id like to purchase a computer for each of my school aged children (one is home schooled due to her disability) I’d like to be able to buy a few things that would enrich our lives such as a car, a new bed and pay a decorator to fresh paint a couple of rooms. (Landlord will not finance this no as current decor is only four years old - but has given permission for me to paint)! I also need a tumble dryer. 

It would be so nice to treat us to a small holiday or things we can’t currently afford, and my daughters needs are such that some respite for me would also be so beneficial. 

if I accept a settlement over the 6k and spend some on items such as I’ve mentioned and save the 6k in an ISA account as security in case we have to move or emergencies,  will this be seen as deprivation of capital? 

Another thought I had was that if I gave my two eldest children a cash gift each they’d be able to move out (eg a deposit on a rental each) and it would improve our own living situation massively - but is this also seen as deprivation? 

Would you in my position accept the full divorce settlement and come off benefits until it is all spent up on living expenses or accept less?

it’s a difficult situation because prior to this divorce I didn’t rely on benefits and was joint partner in the family business, able to work at home and flexible around my caring duties. Now I’m afraid I’m reliant on that entitlement and the money I get from the divorce won’t last us long. 

thankyou in advance 

Spoonie_Turtle

daffodil73 said:

Hi I’m looking for some advice please. I’m currently a single parent of four on universal credit and a full time caregiver for my disabled child. Living in a 4 bed private rented accommodation and I get housing benefit. My two adult children (21 and 24) still live at home and are not in a financial position to move out. Currently going through a divorce and it’s looking likely I will be entitled to a 50% equity in a house and pension order. Not a life changing amount of money but I am looking to get around £35 - £40k 

my mortgage capacity is nil. So I can’t use the settlement as a deposit for housing. I need a 5 bed house until my eldest move out and am currently using the front room as a bedroom. We are living in quite a crowded home with one bathroom and one living room. 

I’m wondering if accepting the settlement may actually be detrimental to myself as it will mean I loose my benefit entitlement. I have currently 2k of debt I want to pay off, and id like to purchase a computer for each of my school aged children (one is home schooled due to her disability) I’d like to be able to buy a few things that would enrich our lives such as a car, a new bed and pay a decorator to fresh paint a couple of rooms. (Landlord will not finance this no as current decor is only four years old - but has given permission for me to paint)! I also need a tumble dryer. 

It would be so nice to treat us to a small holiday or things we can’t currently afford, and my daughters needs are such that some respite for me would also be so beneficial. 

if I accept a settlement over the 6k and spend some on items such as I’ve mentioned and save the 6k in an ISA account as security in case we have to move or emergencies,  will this be seen as deprivation of capital? 

Another thought I had was that if I gave my two eldest children a cash gift each they’d be able to move out (eg a deposit on a rental each) and it would improve our own living situation massively - but is this also seen as deprivation? 

Would you in my position accept the full divorce settlement and come off benefits until it is all spent up on living expenses or accept less?

it’s a difficult situation because prior to this divorce I didn’t rely on benefits and was joint partner in the family business, able to work at home and flexible around my caring duties. Now I’m afraid I’m reliant on that entitlement and the money I get from the divorce won’t last us long. 

thankyou in advance 

This here is a common misunderstanding.  You would be eligible to reapply for UC once savings/capital drops below £16,000, no need to wait until it's all gone.

Cash gifts would be deprivation.  An ISA would still be taken into account for the total.

(Just wanted to make those points clear, sorry my brain's not up to explaining further.)

wilfred30

I would say that some of the things you mention would be fine i.e. paying debt, buying a reasonably priced car and bed but some of the other things would likely be considered deprivation.

Don't your adult children work?

I don't see why you need a 5 bed house with only 4 children.

It seems to me that some of the things are what you want rather than need but a Decision Maker will ultimately decide that.

Voyager2002

So what is the alternative?

wilfred30

Alternative to what?

TELLIT01

I wonder if paying the deposit in order to enable adult child or children to move out would be viewed as deprivation in this specific case.  It could be argued that the money is being used to reduce overcrowding. 

I'm just asking the question.

wilfred30

I doubt that 5 people living in a 4 bed house would be considered overcrowding.

poppy12345

5 people in a 4 bedroom house is far from overcrowding. If you refused to take the settlement and DWP found out then it could be deprivation of capital. It may not be life changing money but it's a decent amount.

daffodil73

So a bit more information, we are entitled to the extra bedroom because of the disability aspect. Both adult children have partners so when they stay over occasionally there can be seven people in the house. 

If I were to buy a car what would be deemed “reasonable” in terms of using the capital as currently I am the named driver on motability vehicle but would benefit from having my own vehicle. . 

Also to clarify I wouldn’t be refusing a settlement as such, as my ex isn’t offering me anything at all. My barrister says I’m entitled to 50% at least, so it’s more it’s about me putting forward a reasonable offer that will be negotiated. 

poppy12345

There's no definition of deprivation of capital. It doesn't mean you can't buy things, what it means is if you go out and buy the most expensive car then this could be seen as deprivation of capital but it will be down to a decision maker at DWP to make that decision.

daffodil73

poppy12345 said:

There's no definition of deprivation of capital. It doesn't mean you can't buy things, what it means is if you go out and buy the most expensive car then this could be seen as deprivation of capital but it will be down to a decision maker at DWP to make that decision.

Thankyou. I guess I’m scared to settle for say 35k - but by the time I’ve paid off my legal fees, debts and bought a car/tumble dryer/bed/computer I’ll be under the 16k allowed -  and still able to claim the benefit.  I’ve no doubt my ex will notify UC out of spite as he resents me having my share and obviously I’ll need to know I can justify it.