£30000 from sale of house whilst claiming UC

[Deleted User]

Im a single mum on low income receiving UC for the past 7 months.

thanks in advance

poppy12345

When you received that money, if you had savings of more than £16,000 on the last day of the assessment period which you received it then you should have reported it then. Savings of more than £16,000 would have meant you wouldn't be entitled to any UC at that time.

Paying off debt is allowed when claiming UC. Home improvements i don't know if this would be ok when renting. What relationship to you is the relative you're renting from? Are you planning on claiming for help with the rent from UC? See link. https://england.shelter.org.uk/housing_advice/benefits/claiming_benefits_if_you_rent_from_family

Devongardener

I wouldn’t have thought spending such large amounts on improving someone else’s property would be an allowable expense under UC rules.  What happens if the relative decides to sell the property after you’ve increased its value for them, or even evict you? 

elsien

I have to agree with the above. It may be acceptable for your own property but not for one you are renting. 

poppy12345

There's no definition of deprivation of capital. However, this arrangement sounds rather odd to me. Your step dad bought a property for you to live in, while you claim for help with the rent. Then you spend thousands on it to make improvements, increasing the value at the same time.

It will be down to a decision maker to make the final decision but they will most likely ask for bank statements. If it is deprivation of capital then you'll still be classed as having that money and if it's more than £16,000 entitlement to UC will end. You will also have an overpayment from the assessment period which the changes took place.

Devongardener

Deleted_User said:

Hi devongardener

where are these UC rules as i can find no guidance online?

is this just your opinion that it wouldnt be allowable or do you speak from experience having worked in this area?

many thanks for your help

No I haven’t worked in this area abut know someone with a similar experience, inheritance in this case.
 They were allowed to pay debts and replace old furniture and fridge freezer etc.  Every expenditure was examined by DWP to see if it could be disregarded for UC.   

Maybe your paying to improve and increase the value of someone else’s property will be approved but I wouldn’t rely on it.

fatbelly

It hinges on case law.

Have a look at this article, which appears to be a very thorough essay on the topic

https://medium.com/@rachel.ingleby/a-guide-to-deprivation-of-capital-income-a5f26cd9188c

Caz3121

This does seem rather unusual.
I have done something similar to your step-father and purchased a property for single parent daughter to live in (as she could not get sufficient mortgage) however there are some key differences.
There is a tenancy agreement, required for landlords building insurance and I follow the legal requirements as a landlord.
If the property needed re-wired then this, as the property owner would be my costs and not the tenant (my daughter)
Although she claims a small amount of UC there are no housing costs claimed as the relationship is not the same as if I was renting the property to a stranger....she does not pay market rent, I would not evict on non-payment etc
All has been declared to UC...that her landlord is a relative and rent payment has been entered as £0.

She does not have savings that would affect a claim but, if she did, I would expect spending them on her landlords property would raise questions.
If you were renting from a stranger would you pay to rewire their property, put new windows in etc?

The decision maker will review the spends and decide which will be allowed an not.
From your £30k I would expect the debt repayments will be ok which takes you down to £22k so still over the threshold. There could be overpayments backdated to when you received the funds to pay back which will also reduce the amount. 
Notional capital could result in some time before able to claim again, If this leaves you with problems would your step-father reimburse you for the improvements to his property?

Rubyroobs

When you claim UC you agree to report changes. Surely you would have known that having a large amount of capital would have stopped your UC until that capital drops below 16k.
Capital/ savings can be spent reasonably, paying off debts would be fine, paying for home improvements for someone else's property I doubt would be considered reasonable spending.

poppy12345

Where we you living before your he bought the property?

poppy12345

It just seems a strange situation. He's bought a property for you to live in, charges you rent, which you intend to claim for help with but you've had to pay for all the work to be done. If a decison maker decides that you still have the money and you've deprived yourself of capital, how will you pay the rent then? Will he still allow you to live there if no rent is paid?