Universal Credit claim as homeowner.

andymoss123

Apologies if this has been covered before. But I own a house jointly with my wife, and we've decided to split. Because the house is tiny (we would've needed to move soon anyway) I will be moving out with my two boys into a rental, and my wife will be staying in the house - everything is very amicable. There is no mortgage. So my question is: will I be able to make a U.C. claim under these conditions, or will the house be counted as capital and make any claim worth next to nothing? TIA

Rubyroobs

You can make a UC claim ( if you qualify) but if the house is in joint names they will expect it to be sold or for her to be buying you out of your share. They can disregard your share of a house you are not living in for 6 months to allow you to sell. This disregard can be extended longer. If you then receive more than 16k equity from the sale you would no longer be eligible for UC. If it is being put into purchasing another property, again it can be disregarded.

andymoss123

I kind of assumed that, but we have some friends in a similar situation, where he is named on another property, and they've only been asked if they have an income off this property. Could they be in for a nasty surprise?

Rubyroobs

andymoss123 said:

I kind of assumed that, but we have some friends in a similar situation, where he is named on another property, and they've only been asked if they have an income off this property. Could they be in for a nasty surprise?

It is the capital in a second property that is considered rather than any income earned.

andymoss123

Thank you for your advice. Just as a follow-up, does this change at all if my wife then started her own claim whilst living in the house. The reason she isn't currently is that she's seasonal self-employed, so would be a nightmare with UC. But if it meant keeping the house... Alternatively, would the issue be resolved if I signed it over to her?

poppy12345

You can just "sign" the house over to her and then expect to be entitled to a means tested benefit. This would be considered as deprivation of capital and you would still be treated as having it so there would still be no entitlement to means tested benefits. 

andymoss123

That's understandable. What about her making a claim? Would be still be looking at having to sell? It may seem odd, but the house is tiny, and a half is worth possibly 5 years' rent. I'm just looking for a way to keep the roof over her head. If it's not possible, it's not possible.

poppy12345

If there's any entitlement for her then she can claim. As she's living in the house it will be disregarded from capital. As the children will be living with you then she won't be able to claim child element of UC for them.

If it's just herself and she's 25 or over her maximum UC entitlement will be £368.74/month. Any earnings she receives each month will reduce her UC by 55%. Whether there's any entitlement will depend on her earnings. She can use a benefits calculator to check entitlement. 

Wouldn't it be better for you to live in the house with the children and she finds somewhere else to live?

andymoss123

The house is tiny with the boys sharing a tiny bedroom. Which was fine when they were 2 and 4, but is becoming unworkable now. We have a 6 x 10 bedroom, a bathroom, and a kitchen/diner/lounge/bedroom. In all, it's smaller than a static caravan, but it's a roof! We'll never be able to afford another house, or any kind of inheritance for the kids, or a bolt hole if the !!!!!! falls out of the world again. The wife's work is seasonal, which UC really wasn't made for.

andymoss123

...and self employed seasonal work at that!

andymoss123

Say she did make a claim, do I need to tell them about the house on my claim? And if, say, in 18 months time, she becomes no longer eligible, do they then come back to me about selling it, lest it affects my claim?