deprivation of capital - Repaying family

Gtwizzle

Hi,

Just after some advice really.

Myself and my partner are looking to move in together with our children.

I am buying a new house for us in my name due to my partner not qualifying for shared ownership as she is already in the scheme.

I am being provided the deposit for the mortgage from a family member and we planned on paying it back when my partner sells her house using the remaining capital.

She currently receives benefits and obviously selling the house would take her over the threshold, however the capital would be used to pay her family money she owes them and the deposit money back to my family member which would put her back under the capital threshold.

Would the DWP allow this, would they count it as deprivation of capital or what evidence would they need to show it is repaying debts.

Thanks

Rubyroobs

So your partner is going to put large amounts of money from her house sale into a house in your name yet her name is not going to be on the deeds? Has she considered the implications of this? I very much doubt the DWP would accept this given that her house sale money isn't even going to buy herself a house but someone else- that person being you. She is effectively giving you a house deposit and has no share of the house unless I am misunderstanding ? 

Gtwizzle

yes she knows the implications.
It is also in the process to get it written up in financial orders etc until the point she also gets added to the deeds.

Gtwizzle

Hi, sorry I didn't see your extra points.
Initially yes the house would be in my name and not hers but we would be adding her to the deeds etc once she has sold her house.
Thank you for your feedback.

TELLIT01

Deprivation of Capital isn't the only potential issue here.  As the OP is able to get a mortgage they are presumably working.  The income of both the OP and their partner will be taken into account when calculating any continued entitlement to UC (I'm assuming that's what the partner currently gets).

Voyager2002

Mortgage lenders do not allow one to borrow the money for the deposit. Your relative would be required to sign a declaration that the money provided for the deposit was a gift, not a loan. 

peteuk

Gtwizzle said:

Hi,

Just after some advice really.

Myself and my partner are looking to move in together with our children.

I am buying a new house for us in my name due to my partner not qualifying for shared ownership as she is already in the scheme.

I am being provided the deposit for the mortgage from a family member and we planned on paying it back when my partner sells her house using the remaining capital.

She currently receives benefits and obviously selling the house would take her over the threshold, however the capital would be used to pay her family money she owes them and the deposit money back to my family member which would put her back under the capital threshold.

Would the DWP allow this, would they count it as deprivation of capital or what evidence would they need to show it is repaying debts.

Thanks

A few points - your buying a house and she is moving in - at this point if she is receiving UC then it becomes a joint claim.   So only if you then continue the claim that the £16K threashold applies. 

As you would have brought the house when she moves in, she will have a second property in which she is not living.  This can be disregarded for 6 months, at which you can ask for an extension if you can prove the house is for sale.  It will be down to a decision maker to allow the extention of the disregard. 

Where are you living currently?  If you are borrowing from a family, it may sound strange but put it in writting and dated eg The sum lent is X and will be paid into your account 01 Sept.   That way when X is transfered into your account on 01 Sept you can marry the two together.  

In that agreement you can include a payment line which indicates it can be paid back by either you or the partner. However as above this will need to be a gift, rather than a loan for the deposite. 

They big unknown is how long will it take them to sell the proprty. 

born_again

Re above.
Only sticking point here is if a family member is providing a loan to the OP. Then mortgage co will take repayments into account in the affordability of the loan. 

itsthelittlethings

Why doesn’t she sell her house and buy the house with you with the proceeds? Would this be a much simpler way to do it?

Grumpy_chap

When the OP plus partner move in together, UC will be a joint claim so considering capital and income of both partners.
Given the OP seems to be obtaining a mortgage in their sole name, the OPs' income may be sufficient that there is no ongoing eligibility for UC.