Buying a house while claiming benefits question

Britannia12345

Hi, as a disabled family we claim means tested benefits. We are still on legacy benefits at the moment but will have to change over to UC in two weeks' time.

A relative very kindly left us a large amount of money in their will last year. The probate is still being sorted and the solicitor thinks it will take until after Christmas before it is settled. As we've seen a house that would suit our needs (adaptations etc) the solicitor said he can advance us the money to pay for the house and the conveyancing fees right now.

If this money goes into our bank does this stop all our benefits even though it will be going out again in the near future for payment of the house?

I'm particularly worried about having to change to UC and losing transitional protection if we have to stop and start claiming again.

Has anyone else been in this position or have any advice as my head is like a whirlpool right now trying to decipher it all?

elsien

As soon as it hits your bank account, then yes, it will be taken into account for means tested benefits. I don’t know there’s another way of doing it. 

There is a disregard for a short period In some circumstances, but I believe that’s only for transitional protection if you’re selling a house to buy another one. 

Is the money enough to buy a house with outright?
The problem with the house that you’ve seen is that house sales can fall through for any number of reasons in between making an offer and exchange/completion. There are no guarantees, so you also have to factor in that the money could be sitting in your account for a lot longer than you anticipate. 

Britannia12345

Yes the solicitor is advancing us the full amount for the property. 

Spoonie_Turtle

Which benefits do you currently claim?  That will determine what effect the money would have right now and whether you'll still be able to claim UC with transitional protection.

Voyager2002

An immediate thought: the solicitor should hold the funds on "solicitor's deposit" and so they should never go into your bank account. In any case, just about all the costs of buying a property are paid out of your solicitor's account rather than by you.

At this stage all that you have is the offer of a loan, and that is not something that you need to declare. Do not make a firm agreement to accept the loan until you are ready (or almost ready) to exchange contracts on your purchase.

Britannia12345

We have contribution based esa, income support, carers allowance, pip,  hb and council tax benefit and child tax credits. I have to put a claim in for UC before the end of this month. 

TELLIT01

Bear in mind that if there is any more money to come that may also affect entitlement to any Income Related benefit e.g. UC.  I'm assuming there will be, as you will have the costs of upkeep for the property, and if currently your only income is benefits that wouldn't go far on maintaining a property.

Britannia12345

Yes, when we get the final amount of the money when the probate is settled all our means tested benefits will end anyway. I'm scared of being left without any money coming in in the meantime as all the money from the advance will go straight to the vendor for the house. 

Grumpy_chap

Why does the money ever have to go in to the OPs account?
Why can't the Solicitor simply pay for the house directly?

poppy12345

If the capital is in your bank when you claim UC there's a 12 month disregard for capital above £16,000 because you're migrating from Tax credits. 

peteuk

poppy12345 said:

If the capital is in your bank when you claim UC there's a 12 month disregard for capital above £16,000 because you're migrating from Tax credits. 

OP suggests they are transfering prior to the pay out. 

Britannia12345 said:

We are still on legacy benefits at the moment but will have to change over to UC in two weeks' time.

I have recently been through the probate system and even with a copy of the will (not the original) it only took a few months.   Im not 100% sure on the solicitor advancing the full amount, I could understand may be the smaller bits (fees, survey ect) if there is money in an account that doesnt go to probabte. So they may have the money already. 

Equally I dont see why the solicitor is paying you the money, unless your not using the same solicitor for the sale of the house. Then the solicitor may have to pay you.  

My question is where are you living now?  If rented then UC would normally inclued a Housing element, which you wont get when you buy.  If you own your current house, what is the plan for it. Having a second properties will increas your capital and potentially stop your means tested benfeits.