Buying a house and in receipt of ESA

EffieTrinketsWig

A relative has offered to buy me a house, the problem is that if they put money in to my bank account to pay for it I would be in trouble with the DWP, would I be able to get the DWP to accept that the money is ringfenced to buy a house and I won't be living it up on the money?

Muttleythefrog

I presume the ESA is income related..... or you have other income related consideration for benefits - if not then obviously no issues to think about for benefits. I presume you will have no other property.

There is potential option depending on solicitor (some may not like this some may) for them to transfer the money directly to them in the days before the transaction as requested by the law firm. Or you could simply try to move the money in a single day... into your account (which law firm may insist on), out to solicitor.

The other option which may invite extra costs and issues of future - they buy in their name.

There is no possibility to ringfence as such (the money for example isn't coming from sale of your own home and this purchase to replace).... but you're entitled to buy a property to live in... and if someone offers to do that for you...well... take it.

I would take the protective measure of getting document signed of intent for the funds to be exclusively provided to you for purchase of a home for you to live in. i.e. you're only receiving this money to buy a home to live in and would not otherwise receive it.

That'd be my advice.

TELLIT01

I don't think a letter stating the purpose the money was for would affect entitlement to benefits.  If in receipt of Income Related ESA the entitlement would in all likelihood cease.  A Decision Maker may have the final say.

Muttleythefrog

TELLIT01 said:

I don't think a letter stating the purpose the money was for would affect entitlement to benefits.  If in receipt of Income Related ESA the entitlement would in all likelihood cease.  A Decision Maker may have the final say.

Crucially they won't have the money for more than a few hours even if at all (they might want to talk to prospective conveyancers about process before choosing one). So nothing to declare as I see it. The letter could be protective if later they came back and there was a question of DoC... arguing the money was only received (if it ever was) for the purposes of buying a home to live in would show the claimant acted reasonably and possibly reduced reliance on the state if they're getting housing support currently. Am I reading things wrong today?... lots of drugs in the system...lol

EffieTrinketsWig

Thank you for all your advice, I am a bit less stressed out now, I have taken the leap and made the offer, fingers crossed the DWP don't chuck a spanner in the works.   This is life changing for me, If things work out I might actually recover sufficiently to return to work.

TELLIT01

@Muttleythefrog I'm not convinced that the time the money is in the account will make a difference.  DWP are supposed to be informed whenever capital exceeds £16k as entitlement ceases at that point.

The 'cleanest' way i.e. the way least likely to cause any potential problems with DWP would be for the money to be held by a solicitor and never go into the OPs bank account.  That may require other hoops to be jumped through due to money laundering checks.

Muttleythefrog

TELLIT01 said:

@Muttleythefrog I'm not convinced that the time the money is in the account will make a difference.  DWP are supposed to be informed whenever capital exceeds £16k as entitlement ceases at that point.

The 'cleanest' way i.e. the way least likely to cause any potential problems with DWP would be for the money to be held by a solicitor and never go into the OPs bank account.  That may require other hoops to be jumped through due to money laundering checks.

Yeah I think perhaps wise then, for them, to talk to select conveyancing where they'd be happy to take the funds direct from funder.... I think you can get variation in approach with AML checks sometimes influencing one way or other. With Universal Credit it's probably a bit simpler since circumstances at end assessment period relevant.

Yamor

There is something in trust law called a "Quistclose trust", where money is provided on condition that it is used for a specific purpose, and if not so used, must be returned to the giver.
If it is done correctly, the recipient is not the beneficial owner of the money unless and until they have been spent in the specific way set out, and as such, the money will not affect entitlement to any means-tested benefits.

peteuk

EffieTrinketsWig said:

A relative has offered to buy me a house, the problem is that if they put money in to my bank account to pay for it I would be in trouble with the DWP, would I be able to get the DWP to accept that the money is ringfenced to buy a house and I won't be living it up on the money?

Which is a nice idea, but I would look into the effect of owning a house, maintainance, insurance, etc.  

Where are you living at present?