Disregarded property problem

Redeemed

Hi, new to the forum, hope someone can be of help.
This is regarding my daughter who is having all sorts of trouble with the UC.
She and her husband were living in house A.
Her mother in law was living in house B.
Due to a need for more room they swapped.

Daughter then bought house C, and to save £6k on unnecessary stamp duty they left the house A in her husbands name since he is the sole beneficiary in the event of his mother's death.

Son in law and Daughter makes no money from house A. There is no mortgage, her mother in law pays no rent as it is her house except on the deeds.

Daughter has just transitioned from ESA to UC and has a 12 month transition period where savings etc are not counted.

However:
1) UC are stopping £180 a month from her UC as she has capital in the form of property which she has informed them is not the case.
Interestingly they are not counting savings above the £6k limit for UC during this 12 month transition period.
2) Once the mother in law in house A reaches 66 it will not count as capital, but at the end of the 12 month transition period there are 3 months where it will count before the mother in law reaches 66 and so daughter will receive no UC whatsoever for those 3 months.

Daughter has rung 3 times and spoke to a DWP person at the local office who all tell her there is nothing to be done, despite technically they can disregard the property given the circumstances.

Any ideas please?

Albus_Scope

Hi there @Redeemed welcome back to the community.

I'm afraid I am totally stumped by that, but hopefully one of the regulars will be able to offer some suggestions soon. 

poppy123456

House A belongs to the husband and it’s in his name. A house that you own and do not live in is treated as capital and will affect any means tested benefits you’re claiming. 

As there’s a 12 month disregard for capital above £16,000 then yes it’s disregarded for that duration. When claiming UC as a couple then your joint circumstances will be taken into consideration so yes after those 12 months then UC will end. 

As there’s capital of more than £6,000 yes there’s a deduction of £4.35/month for every £250 or part thereof over that amount. However Transitional Protection should see that they are not any worse off by claiming UC. 

For it to be disregarded once she reaches state pension age then it will be down to a decision maker to make that decision. 

Redeemed

This is the problem, they don't own the house, mother in law does, it just happens to be in his name.

It still begs the question as to why they are stopping £180 per month from UC when it's only the beginning of the transition period for capital.

poppy123456

I don't see it as a problem because it's in his name so he does actually own the property, there's no 2 ways about it. A property you don't live in is treated as capital. 

TP should cover the £180 but it will depend on the exact figures. Impossible to advise with that because I don't know exactly what benefits they were claiming, I suspect it was Tax credits and for that, again it depends on the figures of the Tax credits award the day before they claimed UC. Very complicated and not something I'm able to calculate unfortunately. 

Once the mother reaches state pension age they can reclaim UC but they will still need to report the property and tell them the mother is living in it. Whether it's disregarded will depend on the reasons why she moved there in the first place. A decision can't be made to disregarded before the changes take place.

poppy123456

Can I please just check what other benefits they were claiming when they migrated across to UC? Capital disregards for more than £16,000 only applies to those migrating from Tax credits. 

Redeemed

The family have been on tax credits for a number of years as either son in law or daughter work full time.
To sell the house would make son in law's mother homeless, and as morally it is hers she pays no rent anyway.

poppy123456

That explains the capital disregard because of the Tax credits migration. 

It maybe morally her house but as it’s in the son in laws name by law it’s not her house unfortunately. 

Redeemed

Still doesn't make sense them taking £180 a month off for capital during the migration period.

Pandapops