Impact on benefits from house sale

Cs9ja17

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

marcia_

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

Cs9ja17

marcia_ said:

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

Unsure. She will move with new partner into a home owned by new partners Father which is in process of transferring ownership to new partner. She may wish to purchase a share of this property. 

TELLIT01

Sale proceeds from the current property can be ignored for up to 6 months if looking to purchase another property.

peteuk

Cs9ja17 said:

marcia_ said

 Is she planning on buying a new home? 

Unsure. She will move with new partner into a home owned by new partners Father which is in process of transferring ownership to new partner. She may wish to purchase a share of this property. 

Any profit from the house is likely to be split 50/50, deductions for UC start when savings are over £6K and eligibility for UC stops at savings over £16K.  As noted house sale will be disregarded for 6 months. 

However, this all might be a mute point as if she moves in with new partner, it becomes a joint claim and as such should report the change in circumstances.

poppy12345

Cs9ja17 said:

marcia_ said:

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

She may wish to purchase a share of this property. 

If the house she owns a 50/50 share of sells then it won't be disregarded because she "may" purchase a share of another property.

NedS

poppy12345 said:

Cs9ja17 said:

marcia_ said:

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

She may wish to purchase a share of this property. 

If the house she owns a 50/50 share of sells then it won't be disregarded because she "may" purchase a share of another property.

Agreed. Often they find themselves in a position where buying another property is unrealistic as the capital realised from the sale is insufficient to purchase another property and it may be unrealistic to obtain a mortgage whilst on benefits, so there would be no grounds to disregard the capital and it would be taken into account in full, ceasing any entitlement to UC.

To be disregarded they must be able to show proof of the intent to purchase another property - e.g, having a mortgage approved in principle or having an offer accepted on a property etc. Having an aspiration to purchase another property is not sufficient grounds to disregard.

Voyager2002

Cs9ja17 said:

marcia_ said:

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

Unsure. She will move with new partner into a home owned by new partners Father which is in process of transferring ownership to new partner. She may wish to purchase a share of this property. 

When she moves in with new partner her situation will be different. The DWP will look at the total income and needs of the new household and will presume that the new partner will support her financially. If he has a decent income then probably all means-tested components of UC will stop.

born_again

A thought here.
Say OP is still able to claim UC with new partner. (new can of worms, with transfer of ownership)

Just what would be considered as "purchase a share of this property".

Would simply handing the other party the funds be considered OK, or a D of C. Or would they want to see a new joint mortgage?

peteuk

born_again said:

A thought here.
Say OP is still able to claim UC with new partner. (new can of worms, with transfer of ownership)

Just what would be considered as "purchase a share of this property".

Would simply handing the other party the funds be considered OK, or a D of C. Or would they want to see a new joint mortgage?

To add someone onto a mortgage is a relatively easy task, if she then uses the profit from the sale of the original property then this will obviously bring down the total owed.  It would be up to the lender and them to work out what is best, re-mortgage or additional payment (I would suggest the later depending on the terms of the mortgage and interest rate) 

However as I and others have noted, moving in/adding to the current mortgage will mean a joint UC claim.  If she hands the money to the new partner and he keeps it then IOM it will go against them as savings. 

Muttleythefrog

NedS said:

poppy12345 said:

Cs9ja17 said:

marcia_ said:

Cs9ja17 said:

Good afternoon 

Looking for advice on the below:

Married couple purchase house as joint tenants. They have 2 children.

They amicably divorce. 

Mother claims universal credit with low income from Jon and child benefit.

Husband pays mortgage but moves out.

Now they wish to sell property. There will be equity from the sale.

Is there a way for the mother to maintain her universal credit income without breaking any laws?

Neither want to fall foul of the law but also don't want to see money made from the house sale whittled away. 

 Is she planning on buying a new home? 

She may wish to purchase a share of this property. 

If the house she owns a 50/50 share of sells then it won't be disregarded because she "may" purchase a share of another property.

Agreed. Often they find themselves in a position where buying another property is unrealistic as the capital realised from the sale is insufficient to purchase another property and it may be unrealistic to obtain a mortgage whilst on benefits, so there would be no grounds to disregard the capital and it would be taken into account in full, ceasing any entitlement to UC.

To be disregarded they must be able to show proof of the intent to purchase another property - e.g, having a mortgage approved in principle or having an offer accepted on a property etc. Having an aspiration to purchase another property is not sufficient grounds to disregard.

Just regarding your second paragraph.... I don't know what is standard in terms of evidence required or whether Covid Pandemic affected what staff resources were placed into and its relevance to whether procedural requirements were short-cutted.... but I was never asked for any evidence at any point when  gaining sale proceeds, intending to buy another property with such proceeds, successfully asking for extension to the 6 months disregard as initial one expired, spending of those proceeds... all I did provide was my own declarations of events which they seemed to accept. But obviously it would be prudent regardless to ensure evidence of intent exists and if a mortgage was required then inevitably there should be that evidence of being in place in principle.