how will my universal credit be affected after parents help to buy my family a home?

fitzykev

i was in the fortunate position for my parents to gift me 63 thousand towards a deposit and i was able to secure a mortgage of 97 thousand. at present we are renting but will move to new house soon. we get universal credit for help with rent and my sons day care, he is two and a half. will this be affected of if we are still deemed not to be earning enough will universal credit still make up the difference? 

calcotti

If you already have the £63,000 you should have declared it to UC because you are not entitled to UC if you have more than £16,000. If you haven’t got the money but it will simply come in and immediately go out for the deposit that’s fine. If you do have the money but there is documentary evidence that it has been gifted for that sole purpose and will have to be returned if not so used then UC may be able to disregard it.

in respect of your actual question your UC will change by having the housing element removed. In addition the Work Allowance (the amount of earnings disregarded) will increase from £344 to £577 so the earnings deduction will decrease. If there is still a UC amount due it will be paid.

fitzykev

calcotti said:

If you already have the £63,000 you should have declared it to UC because you are not entitled to UC if you have more than £16,000. If you haven’t got the money but it will simply come in and immediately go out for the deposit that’s fine. If you do have the money but there is documentary evidence that it has been gifted for that sole purpose and will have to be returned if not so used then UC may be able to disregard it.

in respect of your actual question your UC will change by having the housing element removed. In addition the Work Allowance (the amount of earnings disregarded) will increase from £344 to £577 so the earnings deduction will decrease. If there is still a UC amount due it will be paid.

The deposit was sent directly to my solicitor I did not see any of it. The mortgage went directly to solicitor from the lender I seen none of it. I understand  what your saying apart from the part I don't get is the amount disregarded increases to £577. Will that be to are favour or disadvantage? 

Spoonie_Turtle

fitzykev said:

calcotti said:

If you already have the £63,000 you should have declared it to UC because you are not entitled to UC if you have more than £16,000. If you haven’t got the money but it will simply come in and immediately go out for the deposit that’s fine. If you do have the money but there is documentary evidence that it has been gifted for that sole purpose and will have to be returned if not so used then UC may be able to disregard it.

in respect of your actual question your UC will change by having the housing element removed. In addition the Work Allowance (the amount of earnings disregarded) will increase from £344 to £577 so the earnings deduction will decrease. If there is still a UC amount due it will be paid.

The deposit was sent directly to my solicitor I did not see any of it. The mortgage went directly to solicitor from the lender I seen none of it. I understand  what your saying apart from the part I don't get is the amount disregarded increases to £577. Will that be to are favour or disadvantage? 

It's in your favour because more of any earnings are disregarded before they start making deductions from your UC.

calcotti

fitzykev said:.

The deposit was sent directly to my solicitor I did not see any of it. The mortgage went directly to solicitor from the lender I seen none of it.

That’s great.

fitzykev said:. I understand  what your saying apart from the part I don't get is the amount disregarded increases to £577. Will that be to are favour or disadvantage? 

It’s to your advantage because, as I said, the earnings deduction will be smaller because less of your earnings are taken into account (I am assuming you have some earnings as you are getting help with daycare).

fitzykev

Spoonie_Turtle said:

fitzykev said:

calcotti said:

If you already have the £63,000 you should have declared it to UC because you are not entitled to UC if you have more than £16,000. If you haven’t got the money but it will simply come in and immediately go out for the deposit that’s fine. If you do have the money but there is documentary evidence that it has been gifted for that sole purpose and will have to be returned if not so used then UC may be able to disregard it.

in respect of your actual question your UC will change by having the housing element removed. In addition the Work Allowance (the amount of earnings disregarded) will increase from £344 to £577 so the earnings deduction will decrease. If there is still a UC amount due it will be paid.

The deposit was sent directly to my solicitor I did not see any of it. The mortgage went directly to solicitor from the lender I seen none of it. I understand  what your saying apart from the part I don't get is the amount disregarded increases to £577. Will that be to are favour or disadvantage? 

It's in your favour because more of any earnings are disregarded before they start making deductions from your UC.

It's a pity I can't attach a screen shot of one of the payments and you could have told me how much of a diffrence it could be now that we own a home

calcotti

Put it like this
If you earn £1000 at the moment £344 is ignored. The earnings deduction is therefore 55% x £656 = £361.90
after you no longer rent the first £577 is ignored. The earnings deduction is therefore 55% x £423 = £232.65. 

Remember too that on the day you become homeowners you will lose the housing element for the whole UC assessment period in which that happens. If possible try and make the switch from renting to owning near the start of your assessment period if possible.

fitzykev

calcotti said:

Put it like this
If you earn £1000 at the moment £344 is ignored. The earnings deduction is therefore 55% x £656 = £361.90
after you no longer rent the first £577 is ignored. The earnings deduction is therefore 55% x £423 = £232.65. 

Remember too that on the day you become homeowners you will lose the housing element for the whole UC assessment period in which that happens. If possible try and make the switch from renting to owning near the start of your assessment period if possible.

We will own from tomorrow. I think the assessment period is 10th of one month until 11th of the following 

calcotti

So your next UC will not have the housing element included for any of the assessment period but the increased Work Allowance should be applied. (Obviously you need to inform UC.)

fitzykev

calcotti said:

So your next UC will not have the housing element included for any of the assessment period but the increased Work Allowance should be applied. (Obviously you need to inform UC.)

We can't actually move into the house until the 17th of December will this make any difference?

Robbie64

Will you still be responsible for paying rent until then?