Selling car while on universal credit

BigStu78

I am currently on income assessed Universal Credit due to being long term sick, currently going through process of applying for PIP/ADP. 

I bought a car a 6 months before having health issues but with rising costs etc and a few debts I have it's just too much of an expense so looking at selling.

I'll probably get about around £13k for it, so I have a couple of questions.

1. Does selling your car count as income

2. I know you can use capital to pay off debts etc and it wouldn't be classed as trying to hide/spend capital to get a better payment (notional capital) but do I have to declare the starting amount of capital after I have sold the car or the capital after I have paid off my debts, or both.

I've been trying to find this out online today and my head is melted after looking through so many government regulations etc with no clear answer. It's almost as if they don't want you to find these things out for yourself. 

Any help would be gratefully appreciated

Rubyroobs

It depends on the amount of capital you have in your on the last day of your Uc assessment period, so if you sell your car then pay off the debts and the capital left on the last day of your assessment period is less than 6k there would be no need to declare anything.

calcotti

For the avoidance of doubt, it doesn’t count as income.

tifo

I didn't know a car is classed as capital when sold.

So i could own a £100,000 car which is not classed as capital but when i sell it, it will be?

Is it the same with a home, just the 1 lived in.

calcotti

tifo said:

So i could own a £100,000 car which is not classed as capital but when i sell it, it will be?

Yes.     

diystarter7

tifo said:

I didn't know a car is classed as capital when sold.

So i could own a £100,000 car which is not classed as capital but when i sell it, it will be?

Is it the same with a home, just the 1 lived in.

Hi

Yep. I recall watching a tv/bailiffs show they guy lived in a mansion-sized house and had a very expensive car and when the bailiffs turned up he was telling them he was on benefits. The house you live in and your car, the main car do not count as capital unless you sold them.. 

Thanks

tifo

diystarter7 said:

tifo said:

I didn't know a car is classed as capital when sold.

So i could own a £100,000 car which is not classed as capital but when i sell it, it will be?

Is it the same with a home, just the 1 lived in.

Hi

Yep. I recall watching a tv/bailiffs show they guy lived in a mansion-sized house and had a very expensive car and when the bailiffs turned up he was telling them he was on benefits. The house you live in and your car, the main car do not count as capital unless you sold them.. 

Thanks

What if you need the money from the house or car to buy another one? Can DWP tell you to buy a less expensive car?

calcotti

tifo said:

diystarter7 said:....The house you live in and your car, the main car do not count as capital unless you sold them.. 

What if you need the money from the house or car to buy another one? Can DWP tell you to buy a less expensive car?

If you sell your existing house and intend to purchase a new property with the proceeds then they can be disregarded while the new property is acquired (the disregard is initially for six months but can be extended).

I think if you had a car worth £100,000 and were claiming benefits then you would be expected a car that was reasonably required to match your needs. So buying a new 'classic' car or such could be considered deprivation of capital.

slowcars

calcotti said:

tifo said:

diystarter7 said:....The house you live in and your car, the main car do not count as capital unless you sold them.. 

What if you need the money from the house or car to buy another one? Can DWP tell you to buy a less expensive car?

If you sell your existing house and intend to purchase a new property with the proceeds then they can be disregarded while the new property is acquired (the disregard is initially for six months but can be extended).

I think if you had a car worth £100,000 and were claiming benefits then you would be expected a car that was reasonably required to match your needs. So buying a new 'classic' car or such could be considered deprivation of capital.

What is reasonable?
Even on the Motability site where they have a limit of £30,000 or you can add your own money to it to get a better one. Is £30,000 reasonable?
I'm on benefits (Pension Credit) and run a 2-year-old £51,000 BMW (part on credit). All of my cars in the past that I have owned are reasonable to me.

HillStreetBlues

calcotti said:

I think if you had a car worth £100,000 and were claiming benefits then you would be expected a car that was reasonably required to match your needs. So buying a new 'classic' car or such could be considered deprivation of capital.

Is it "backdated" on UC like paying for a care home?

Spoonie_Turtle

slowcars said:

calcotti said:

tifo said:

diystarter7 said:....The house you live in and your car, the main car do not count as capital unless you sold them.. 

What if you need the money from the house or car to buy another one? Can DWP tell you to buy a less expensive car?

If you sell your existing house and intend to purchase a new property with the proceeds then they can be disregarded while the new property is acquired (the disregard is initially for six months but can be extended).

I think if you had a car worth £100,000 and were claiming benefits then you would be expected a car that was reasonably required to match your needs. So buying a new 'classic' car or such could be considered deprivation of capital.

What is reasonable?
Even on the Motability site where they have a limit of £30,000 or you can add your own money to it to get a better one. Is £30,000 reasonable?
I'm on benefits (Pension Credit) and run a 2-year-old £51,000 BMW (part on credit). All of my cars in the past that I have owned are reasonable to me.

Depends on whether the only one that meets your needs is the £30,000 one or whether a cheaper one would do the job.  Obviously if using Motability they are more likely to believe/accept reasoning based on disability-specific needs.

But generally if someone is needing to live off means-tested benefits, they would be expected to buy a used car that meets their needs.