Complicated situation - help needed!

LCThomas123

We’re looking for some advice. I am posting on behalf of my mum who has quite a unique situation and we are hoping to get some advice on here. Aged 58, she is currently unwell with complex conditions and is not able to work. We have to assume she will not be able to work again.

She sold her house in December 2021 to relocate to Yorkshire to be nearer me and my brothers and family. The plan was to rent initially and find somewhere to buy once she had settled here, however her health took a turn and she is still renting over a year later. The rental property is not suitable to live in any longer for various reasons connected to her health. So either way she will need to move soon, whether purchasing or to another rental. 

The money from the sale of her old house earns a small amount of interest, however she is spending capital every month to cover very basic rent & living costs etc. Our concern is that if she doesn’t purchase a property now there won’t be enough (it can barely buy anything in this area as it is). However it would mean that she would have to rely on benefits to live, at least in the short term but possibly long term depending on her health.

She is awaiting a decision regarding PIP. We believe she may be eligible for ESA but understand that she cannot apply yet, because her landlord pays for the council tax (she pays all inclusive rent/bills). And due to the amount of money she has currently she is not eligible for anything else. So it would be a huge risk to go ahead and purchase a flat because it would mean all of the money is tied up and we don’t know how long it would take for any benefits to come through, and also whether it is actually possible to live off benefits (especially with the cost of living crisis). 

We’re a bit stuck on where to turn for advice… so we’re hopeful that we might get some good advice on here. The main questions:

• Is there any way to apply for benefits in advance or get a guarantee of how much she would get and when?
• Is it possible to live off benefits (as a single person in a small 1 bedroom flat with no mortgage)?
• Is it better to buy a property outright, and use benefits for living costs? Or is there another option that would keep some capital set aside to supplement living costs? She would not be able to get a mortgage due to not working / age. 
• Or would it be better to continue to live off the capital until it runs out (we estimate in the next 6-8 years), and then apply for housing and benefits. 
• Is there another option? Such as part buying a property or social housing?
• Is there anyone we can contact to explain the situation and to get some good advice? We’ve tried CAB but cannot get through on the phone. We’ve struggled to get any advice on benefits whilst she has the capital in the bank.

Any help would be hugely appreciated, thank you!

elsien

I’m not following your comment about not being able to claim ESA because the landlord pays council tax? 

Have you put some figures into one of the benefit calculators - entitled2 or turn2us?
She won’t be entitled to housing benefit etc because of her capital, but whether she can claim ESA depends on her work and national insurance contributions? 

https://www.gov.uk/employment-support-allowance/eligibility

She could contact her local council about over 50s housing. Always worth a try. There’s no harm in getting her name onto the social housing list if she is eligible. 

Does she have any care and support needs because of her health? If so, a local authority care needs assessment might also bump up her priority. 

https://www.ageuk.org.uk/information-advice/care/the-care-act/

HillStreetBlues

Unless you mother has worked in in the not so distance past it would be Universal Credit  she would need to claim.
If she has over £16k  then that can't be claimed
There is a disregard for money from the sale of a house, but normally last 6 month but can be extended, but now it's been over a year might have trouble getting that now.

You can't claim benefits in advance but can look at the money your mother might get on a benefit checker such as https://www.entitledto.co.uk/

calcotti

elsien said:

She won’t be entitled to housing benefit etc

She can’t claim Housing Benefit anyone unless renting in supported accommodation, private rental would be UC

LCThomas123

Thank you!
we were under the impression you had to be paying council tax to be eligible for ESA but will look again!
I think she would only be eligible for UC if she goes ahead and buys a property (ie spends her capital). However we are concerned if she does this, is it actually enough to live off if it is her only income, and if it’s not then she will be very stuck unable to work! It feels like a huge risk 

poppy12345

Similar thread here from OP. https://forums.moneysavingexpert.com/discussion/6416400/benefits-capital-query#latest

Spoonie_Turtle

When did she last work?  ESA eligibility depends on National Insurance contributions in the last two full tax years, so she may well not be eligible now.  

There is the option to get the ball rolling with just claiming NI credits on the basis of being unable to work, colloquially known as a credits-only ESA claim.  If she were assessed as having Limited Capability for Work and work-Related Activity (LCWRA for Universal Credit, called the Support Group on UC) then when she came to claim UC later on she would be entitled to the LCWRA element from the beginning of her claim. 
Just an idea, and it's certainly not *necessary* at this point, but with the massive backlogs it could be worth considering.

To answer your question whether it's possible to live off benefits, it can be, although most people find it difficult.  The standard UC amount for a single adult will be £368.74 from April.  If she were determined to have LCWRA that would be an extra £390.06, totalling £758.80 per month.
Plus any PIP she's awarded, and she would be eligible for reduction in her own Council Tax (exact amount would depend on the council).  To be honest the PIP is probably what will determine whether it's possible to reasonably live off benefits or not, and if you need any advice about that you're in the right place already

If she were to not buy a house, if the rules stay the same in the few years it takes to use the bulk of her savings, Universal Credit also has a rent element which pays either the full rent for social housing unless there's a spare bedroom, or a maximum of the 1bedroom rate for her area (current rates here https://lha-direct.voa.gov.uk/ ) 

Shared ownership could be an option, I don't know how that works with the housing element of UC but others here will.

Also to be really clear, she does not have to use up all her savings before being able to apply for benefits - that's a common misconception.  The upper threshold for savings on UC is £16,000, so as soon as her savings dip below that for whatever reason, she should apply.  Savings between £16,000 and £6,000 will cause a proportional deduction from the UC, and savings below £6,000 are ignored.

One other consideration is that flats tend to be heated by electricity, which is the most expensive form of heating, or some are on district heating networks which are not capped like domestic tariffs are.  If she's not had to pay energy bills for a while, they could be a real shock and she should definitely come to the energy board on here for advice (or you on her behalf) when she starts looking at where to move to.

KxMx

That is a great point about flats and electric heating- when I was looking for my rental I made the decision not to consider any all electric places, and now live in one that has gas central heating.

Murphybear

Have you thought about sheltered housing for your mother?  I live in some which is provided by a Housing Association.  They have properties all over England and you can approach them directly you don’t have to go through the council.  They are rented and the rents are much lower than private housing.  After the first year we get an Assured Tenancy which means security as we don’t have to worry about eviction or the landlord selling (unless of course the rent is never paid  ).  

KxMx

There are also council run sheltered housing schemes. 

diystarter7

Morning
Thanks to the two above posters re shelter  schemes via HA and council
please also consider charity schemes in some areas.

Then there are newer type schemes that are half way between shelter and care home schmes 

OP, you and mum can visit schemes before you decide. The better ones often have a wiaitng list.

Thnaks