2nd property occupied by dependent child

SuseOrm

Hello so I’ve had a letter from universal Credit telling me basically that they are going to take the capital from a property that I don’t live in into consideration which means I would’ve been overpaid for 12 months on universal credits. 

However,  My then,  1819-year-old daughter was living in the property. We moved down south and she remained in it so not to disrupt her education. She has now moved down south and the property has been on the market ever since.  

I’ve received no income for it. It hasn’t been rented out at no point with any payments made. 

by the calculations that I have carried out Theres about £30,000 in equity -6000 that’s disregarded

So £24,000 seems to mean that they have claiming I have an income of £450 a month from this property ?  Does this sound right?

How are we supposed to survive? We’re literally receiving. £650 a month for myself and my son this doesn’t even cover food/fuel as it stands.  

Does this sound right?  Does a human being with any level of common sense. Look at the case ? 

kaMelo

It's based upon the rules. Second properties can be disregarded as capital if they meet certain criteria, being up for sale is one such criteria, an adult child living there is not. With equity of £24000 you would be ineligible for UC.

FlorayG

Sadly, from THEIR point of view you have an asset that you could have been making £450 a month by renting it out. The fact that you decide to let someone live there rent free is neither her nor there; you have the asset, you have been 'wasting' it as far as they are concerned. They will say you could have saved the government the money they have been giving you by renting at market rate, therefore you have been claiming when you did not need to

SuseOrm

kaMelo said:

It's based upon the rules. Second properties can be disregarded as capital if they meet certain criteria, being up for sale is one such criteria, an adult child living there is not. With equity of £24000 you would be ineligible for UC.

That’s very interesting so if I’ve had a for sale sign outside the door it wouldn’t have been an issue. How ridiculous. I despair, we have no way of paying this back.  And if she hadn’t of been living in my house, she would’ve been paying much more rent to somebody else via Housing benefit 🤦‍♀️

SuseOrm

Just out of interest if she had been paying rent, would that have made a difference if I’d charged her a pound a month or something? 

FlorayG

SuseOrm said:

Just out of interest if she had been paying rent, would that have made a difference if I’d charged her a pound a month or something? 

No, because they are basing the overpayment on the local market rent for the property

SuseOrm

FlorayG said:

SuseOrm said:

Just out of interest if she had been paying rent, would that have made a difference if I’d charged her a pound a month or something? 

No, because they are basing the overpayment on the local market rent for the property

Okay thank you.  

SuseOrm

kaMelo said:

It's based upon the rules. Second properties can be disregarded as capital if they meet certain criteria, being up for sale is one such criteria, an adult child living there is not. With equity of £24000 you would be ineligible for UC.

It’s just extra annoying because I actually asked them at the time whether I could make a claim for her on my universal credit account because she was under the age of 20 and she was in full-time education and I was told no and that’s not actually true.  Equally the other parent should’ve been paying child support for her up to the age of 20 as well. 

so that’s two payments that I missed out on both of which would be more than they’re going to be planning to deduct from me so I’m nearly £900 out-of-pocket per month.  

I’m just making these points in case anybody else reads this in the future.  

peteuk

Take a step back.  How/when did you start your UC claim?  Did you transfer from Tax Credit? 

Why did you move South?  I assume youve brought your current house as your title is 2nd property?  I get that your daughter stayed for education but was there a reason for moving.  What level was she studying?

As mentioned UC will see you've a property which you’re not living in so it becomes capital.  Any capital over £6K means theres a reduction of UC (£4.35 for every £250 or part of there in above £6K) and anything above £16K means your not entitled to UC.

What the government/UC expected you to do is sell/rent the property.  Selling would give you £30K capital (approx and dont discount the first £6K as its anything above £6 or £16K regardless) 

Renting - would give you an income, to get the house disregarded you'd have to be self employed and as it was a family member renting it, you would have had to prove it was genuine. So no charging £1 rent wouldn’t have worked.  Equally your rental calculation is wrong.  There is no correlation between the capital and rental income.  You would have been expected to rent it at market value.

Having moved around and disrupted my own kids education (we tried not to) I totally get where you’re coming from.  But sadly the system doesnt see it that way.

Im also not sure the advise below is 100% correct.  Theres more to it than that Im sure - someone with more knowledge will correct me on this) but there is something about having left the property in the last 6 months.

kaMelo said:

It's based upon the rules. Second properties can be disregarded as capital if they meet certain criteria, being up for sale is one such criteria, an adult child living there is not. With equity of £24000 you would be ineligible for UC.

Bottom line is have you been paying two mortgages? If so why should UC provide you with a means tested benefit when your sat on a £30K assist.  Which is the way UC will view it. 

SuseOrm

I fully appreciate that I just wanted her due to her very delicate mental health at the time to be able to complete her studies otherwise quite frankly she wouldn’t have and we would’ve been back to square one again. 

It does appear that the property being on the market ensures that it’s disregarded because they asked me about that and it has actually been genuinely on the market since she moved out last September.  

What Of course they don’t consider is that I’ve wracked up more in debt trying to survive whilst paying those two mortgages than I now have in equity so actually we’re completely back to zero and I will not benefit financially from the situation. 

When the property sells the money will go straight to the credit cards.  

SuseOrm

It’s just frustrating because if I’d sold the property when I moved down south she would’ve been moved into rented accommodation and been entitled to housing benefit which would’ve cost universal credit a site more money and I would’ve just used the proceeds from the sale to go straight into my current property, had a reduced mortgage Everybody would’ve been far less financially stretched. 

And universal credit credits would’ve been paying out a lot more.