Is it ok to buy the flat you live in with an inheritance and continue claiming benefits

Norman_Castle

https://www.entitledto.co.uk/help/savings

[Deleted User]

elsien said:

ETA - presuming he is in England/Wales and not Scotland. 

There is no right to buy in Scotland.

[Deleted User]

newlywed said:

What about paying solicitor costs for the purchase though?
it’s not just the property price.

He's been told the fees altogether will only be a couple of thousand or so which he can manage.

poppy12345

[Deleted User] said:

Norman_Castle said:

(a link to entitled.co.uk)

Thanks, Norman. What would happen if he didn't tell the DWP about the money until after he bought the flat? He's going to be informing them after he's bought it that he won't require Housing Benefit any longer and plans on telling them why.

Then this will be benefit fraud. Once the money goes into their bank they must inform their local Authority and entitlement to Council tax reduction will end.

Changes must also be reported to UC. If they have more than £16,000 in their bank on the last day of their assessment period then their UC will end.

They are not claiming housing benefit, they are claiming UC which will include help with the rent known as housing element.

[Deleted User]

TELLIT01 said:

sammyjammy said:

TELLIT01 said:

If the price to the claimant is £100k, where is he finding the additional £67k? 

I would certainly advise getting independant advice on whether or not owning the property would be in his best interest.  As things stand, with an inheritance of £32k he will only be £16k above the limit for claiming UC again.  £16k will be swallowed up very quickly with normal living costs in probably little more than a year to 18 months.  I don't dispute that it is possible to run a property only from benefit payments but it's likely to lead to a hand-to-mouth existence.

My gut feeling is that he would be better off remaining as a council tenant and therefore avoiding the costs involved in the upkeep of a property.

The assumption being made is that the total value is 100k without the discout

Which hasn't been clarified by the OP.  Irrespective of the actual cost, the advice remains the same

Sorry. To clarify; the property is valued at around £100,000. With the discount of 70% off he will need around £30,000 to buy it. He's due to inherit just over that amount which would cover solicitor's fees etc. If the council ask for a bit more than £100,000 he'll try to get a small mortgage, or ask his family to help.

[Deleted User]

Alice_Holt said:

LateNightHunter said:

calcotti said:

LateNightHunter said:

AFIAK, as soon as the inheritance hits, he'll lose his benefits until his holdings/savings drop below £10k I think?

That’s not correct. £16,000 not £10,000 and PIP is not affected and there is a narrow possibility of UC not being affected - all as already described in this thread.

Entirely fair! I just remember my UC being stopped because I got £15k in a claim last year, is all

        The savings limit is £16k not £15k as calcotti has said.

   If your total capital / savings are now under £16k, have you reapplied for UC (if entitled) ?  
I would recommend that you make yourself aware of the details of UC (such as capital limits), if you are claiming / or can claim it.

Hi, Alice. What might happen if the man hoping to buy the flat tells the DWP after he buys the flat rather than before, even though the money may be in his account for a month or two, depending on how long it take to buy?

[Deleted User]

LateNightHunter said:

AFIAK, as soon as the inheritance hits, he'll lose his benefits until his holdings/savings drop below £10k I think?

How will the DWP know about his inheritance (before he buys the flat; he's planning on telling them afterwards when he tells them he no longer requires Housing Benefit)?

[Deleted User]

calcotti said:

Grumpy_chap said:

calcotti said:

Tucosalamanca said:

I would be minded to pay the inheritance into a pension. Pension not taken into account for UC calculation and would also benefit from some tax relief.

Unless OP is working they cannot, as I understand it, pay more than £2880 (£3600 gross) into a pension in a single year.

If the OP is working, AIUI, pension contributions are limited to 100% of salary (gross).

I was guessing that OP who is on benefits with mental health difficulties was likely not to be in work (or only have limited work).

That's right, he's not working. Not sure if he's likely to work again in the near future (some at the drop-in are on benefits long term, some short term, some on and off). I think some can work a small number of hours without it affecting their benefits (?).

[Deleted User]

calcotti said:

[Deleted User] said:

I would be minded to pay the inheritance into a pension. Pension not taken into account for UC calculation and would also benefit from some tax relief.

Unless OP is working they cannot, as I understand it, pay more than £2880 (£3600 gross) into a pension in a single year.

He considered putting it into a pension as an option if the council turn him down regards buying the house but yes, he's not working so he could only put in £2,880 of it.

poppy12345

[Deleted User] said:

LateNightHunter said:

AFIAK, as soon as the inheritance hits, he'll lose his benefits until his holdings/savings drop below £10k I think?

How will the DWP know about his inheritance (before he buys the flat; he's planning on telling them afterwards when he tells them he no longer requires Housing Benefit)?

They will eventually find out. If he doesn't report the changes then it's benefit fraud, it's as simple as that. As advised many times here, he's not claiming housing benefit, he's claiming UC which includes help with the rent.