Money in savings till house sale - will benefits get stopped?

JH68

My daughter and son in law are both disabled and receive Employment Support allowance and disability benefits. My son in law's parents bought his house for him many years ago. We are moving into a large house where they can live with us and we need to sell two properties that we own, plus the one my son in law owns. His house has sold first which means he will get approx £130,000 which needs to be saved until our two houses are sold, and will then help to pay for the big house that they will own in part. The issue is whether, when they get this cash, their benefit will stop until the time it is paid over. In summary, we want to use the cash from one house they own as part payment for their next home - the issue is the delay in handing the money to the vendor of the new house.

CockneyRebel

Hi and welcome

You really should get trained advice for this ie, CAB.
It is not an unusual situation but the DWP will need to be informed, I don't think that benefits will be stopped as the money is held to purchase the new property, but there is a time limit to do so

CR

Debbie_Scope

Hi @JH68,

Welcome to the community.

Based on what you've told us the answer will lie in the following guidance.

DMG Chapter 52- Capital 52535 page 102 states:

Money from the sale of premises which were lived in as the home is disregarded to give a person time to buy other premises if the person is going to
1. use the money to buy premises and
2. live in those premises as the home.

The period of disregard is 26 weeks or longer if it is reasonable from the date of sale. 

If you need further information please let me know.

Best wishes
Debbie

Topkitten

Another option would be to move the money into an account not in his name. If the whole amount will be needed this shouldn't be a problem though might be frowned upon.

TK

JH68

Thanks Debbie. What does DMG stand for, and how can I get a copy of the document to read the section you refer to?

Debbie_Scope

Hi @JH68,

DMG stands for Decision Maker's Guidance and if you click the underlined text in the post above it will take you straight to the document. Please let me know if the link doesn't work.

Best wishes
Debbie

CockneyRebel

Topkitten said:

Another option would be to move the money into an account not in his name. If the whole amount will be needed this shouldn't be a problem though might be frowned upon.

TK

This could be veiwed as deprivation of capital

CR

JH68

Thanks all. I found the DMG Debbie, and it is so helpful. Removed a worry from my mind. Thank you so much.

JH68

I have another question. My daughter is soon to receive a significant sum of money from her grandma's will. She will add this money to the money from the sale of the house to buy a better property. My understanding is that her husband's entitlement to ESA will cease under "Notional Capital" rules until the capital reduces to £16k. I guess there is no way to avoid the notional capital rule, even though this is to buy a property more suitable to the needs of her and her husband?  If her husband is not receiving benefit, he will not receive the credit for a national insurance contribution. Does he have to pay contributions during the period when no benefit is payable?

CockneyRebel

Is his ESA contribution based or income related ?

CR

ACS

Good Morning, 

Sorry to hijack this post but I have a similar query. 

My husband is a recipient of Income-Related ESA, Support Group and Physical Independence Payment, whilst I receive Carer Allowance. My husband is a veteran and we have been undergoing a 2 year campaign to have his Armed Forces pension increased and we are dependent upon state benefits until this is sorted out.....it takes a while with the MOD. 

I have sold our house and moved into rented accommodation while we await the completion of our purchase. I informed the DWP of our change of circumstance and they immediately switched my husband's ESA from Income-Related to Contribution-Based resulting in a significant reduction in weekly payments. 

I was under the impression that I had 26 weeks to complete the sale/purchase before the benefits were reduced but the DWP customer service rep was insistent that proceeds from the house sale constituted funds and thus my husband did not qualify for IR-ESA. 

Our house was sold on 13 December 2017 and I hope to complete the purchase in the coming weeks; the sale price and purchase price are within a couple of thousand pounds and so we have not released any funds from the house sale. 

Is this correct? 

Any advice and guidance would be much appreciated. 

Regards, 

ACS

Debbie_Scope

Hi @ACS,

This doesn't sound right at all. In the above posts there is a link to the decision maker's guidance which states quite clearly that proceeds from the sale of the home can be disregarded for 26 weeks possibly longer if it's reasonable.

Get back in touch with the DWP and inform them of this and ask them to look into this for you.

Let us know if you manage to sort this out.

Best wishes
Debbie

ACS

Hi Debbie, 

Thank you for your response and advice, I shall engage with the DWP and let you know, 

Many thanks, 

Amelia

Lilegg

Hello all, I need to ask a similar question and can't get that DMG link to work. I managed to hover over it and write some details of the link down so I hope to access it in that way. Will let you  know if it works. Happy New Year.

Debbie_Scope

Hi @Lilegg,

Try this link 
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/755825/dmgch52.pdf 

I'm not sure why the other one doesn't work but hopefully this one will.

Best wishes
Debbie

mikehughescq

DWP will disregard just the capital from the sale of a property if it is to be used to purchase another property within 26 weeks. That disregard can be extended if needed however what no-one has mentioned is that this is ultimately about more than intent. DWP are entitled to ask whether there is an intention to buy or an intention to buy an actual property. If you haven’t taken any steps toward purchase then the disregard would not apply. 

There is no issue or deprivation if the capital fell to be disregarded anyway and notional capital has nothing to do with having more than £16k. 

Lilegg

Thanks Debbie, That link works to get to an index of topics.

kInd regards

Brunettebird1

Hello, Just wondering if anyone can help. My mother in law is receiving the highest award of PIP due to her disability. She wants to sell her house and move closer to us however she is worried that she might lose her PIP. For example, if her current property sells for £300k but she buys a property for £200k, after legal fees, other expenses etc lets just say she is left with £50k. Would she lose her PIP?
I have tried to find out but its not very clear on what the rules are if you’re left with money after selling your house. Any help/advice would be greatly appreciated.

Thanks 
BB1 x

poppy123456

Brunettebird1 said:

Hello, Just wondering if anyone can help. My mother in law is receiving the highest award of PIP due to her disability. She wants to sell her house and move closer to us however she is worried that she might lose her PIP. For example, if her current property sells for £300k but she buys a property for £200k, after legal fees, other expenses etc lets just say she is left with £50k. Would she lose her PIP?
I have tried to find out but its not very clear on what the rules are if you’re left with money after selling your house. Any help/advice would be greatly appreciated.

Thanks 
BB1 x

Hi,

PIP isn't means tested so it won't affect it. Does she claim any other benefits?

Brunettebird1

Thank you for coming back to me. She is in receipt of the state pension, pension credit, carers allowance for her carer x

poppy123456

Brunettebird1 said:

Thank you for coming back to me. She is in receipt of the state pension, pension credit, carers allowance for her carer x

Pension credit is a means tested benefit so this will be affected and the changes will need to be reported to pension credit when the funds enter her bank.

poppy123456

If she's also claiming council tax reduction then this will also be affected because it's a means tested benefit.

Brunettebird1

So essentially it will be the council tax and pension credit that would be effected? X

poppy123456

That's correct. For savings over £10,000 the pension credit will be affect £1 for every £500 over that amount. If the pension credit has an assessed income period then savings will be ignored. For this she will need to check her pension credit award. Details in link provided. https://www.entitledto.co.uk/help/assessed-income-period

Change in circumstances will still need to be reported. For council tax reduction then savings of over £16,000 and she won't be entitled to any reduction.

Brunettebird1

Thank you Poppy123456, you have been fantastic! Such a weight off my mind. If I think of anything else, I’ll be sure to come back. Thanks again X

mayfair1

Hi My son is in receipt of ESA and I have receive Income Support. I am planning to sell my house I live in and my second home to buy a bigger home for my family. Both my properties have equity in them which I will use as a large deposit to buy the new home. Will I no longer eligible for my benefits even though any equity will only go towards a deposit. ......

Adrian_Scope

Hello @mayfair1. The money from sale of a house you live in is usually disregarded for 6 months while you're looking to purchase another property. However this is complicated by your second home for which the capital is counted. 
You can usually use the proceeds of a sale to put on a deposit of a new house you intend to live in but I would strongly suggest getting some face-to-face or telephone advice from a welfare agency such as CAB or Welfare Rights. You can find what's available in your area here at Advicelocal.