Friend just got large inheritance and plans to buy a house but is on UC

dekaspace1

Essentially he has around 100k from house sale.

He wants to spend this on buying a house, buying a used car, paying some bills off.

He only works part time due to health issues (he in past 7 years has had 2 breakdowns, 2 strokes and has other health issues inc diabetes)

After buying a house and a car he won't have much if any left over.

As a friend I was wondering if anyone knew what the DWP would think if he then reapplied for UC after buying the house.

All I read about online is they consider reasonable things so its very unclear what they would consider i.e if he could get a small flat for 50-70k and he instead spent 90k on a small house somewhere it wouldn't be reasonable,

I assume its a case of no one knows but would be interesting to hear some opinions.

poppy12345

UC is based on circumstances on the last day of your assessment period. Once the money goes into their bank they will need to report the changes and their UC will end. If they are claiming council tax reduction then they will need to report the changes to their local Authority and this will stop.

They can use the money to buy a house and it won't be classed as deprivation of capital and neither will paying off debt.

Once the money drops below £16,000 they can reclaim UC.

calcotti

Once he has bought he should be able to claim again. Using capital to purchase a property to live in is not likely to considered to be deprivation of capital because it’s a reasonable thing to do given the opportunity to do so. However, as you suggest, it falls to a DWP decision maker.

Petriix

There might well be an exemption so the capital doesn't count against the normal £16k threshold if it's earmarked for a property purchase.

Robbie64

Petriix said:

There might well be an exemption so the capital doesn't count against the normal £16k threshold if it's earmarked for a property purchase.

This is correct though only the amount that is earmarked for purchasing another property can be ignored and usually for a period of 6 months though this can be extended if appropriate.

Alice_Holt

Robbie64 said:

Petriix said:

There might well be an exemption so the capital doesn't count against the normal £16k threshold if it's earmarked for a property purchase.

This is correct though only the amount that is earmarked for purchasing another property can be ignored and usually for a period of 6 months though this can be extended if appropriate.

      And where that capital arises from the proceeds of the sale of premises formerly occupied as the person’s home.

   In the circumstances the OP seems to describe  "Friend just got large inheritance"  (i.e. an inheritance from the sale a of relatives property ? ) it won't apply.
  

   

diystarter7

Does it matter when the "friend" got the property as the friend could have got it over a year ago but it only sold now.

calcotti

diystarter7 said:

Does it matter when the "friend" got the property as the friend could have got it over a year ago but it only sold now.

As explained by others, the possible disregard only applies if the OP was living in the house as their home. I read the title and opening post to mean that friend had inherited a property which has now been sold. I replied on that basis.

dekaspace1

Yes, basically friends father died who left a house between him and his sister and it took over a year to get everything sorted and they had a buyer that pulled out at one point.

He just got cash on Friday, I only found out tonight as I asked how things were getting on with the sale.

I don't know the whole details obviously it was more I was worried about him going forward especially as its a sellers market right now.

Going by what I know I think he did have to pay half the council tax at one point with his sister, I don't know much else.

And of course hes a first time buyer so wouldn't know how to deal with things going wrong or expensive repairs (which would be another reason UC would be good for him)

diystarter7

Ask your friend if he is aware of what it costs to replace a roof, gutters, boiler, electrics, buildings insurance even a simple repair to door locks etc before he takes that step and gets into bigger trouble. If he is aware of all that then that is good

Robbie64

I overlooked the "inheritance" part of the title. Yes, there is no disregard for a period of time in these circumstances.