Moving to annex

Broken
Broken Online Community Member Posts: 43 Contributor
edited August 2021 in Housing and independent living

Hi, I am in the process of selling my house and buying jointly with my daughter a house with an annex. I will be living in the annex part (this has a bedroom, small kitchenette and wet room). Several questions on this as follow:

Will the council charge for two council tax as it is two dwellings (house with the annex?)

When I inform ESA and PIP of change of address is this likely to cause a full benefits review?

Can I still claim the warm homes discount?

It is my understanding that my benefit entitlements will remain unchanged as I will be living in an annex as an independent single person. There will be a small amount of money left over from house sale and after all solicitor/estate agent fees are paid. This money will be spent on changing/renovating an existing small brick shed into a living room. I understand that I have 26 weeks to reduce this excess from house sale monies and provided it is used to improve the living accommodation, will not affect my benefit entitlements.


Apologies for the long blog but hopefully someone who has been through similar can advise me and if so, many thanks.

Comments

  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    HI,

    Woodbine is correct here, it's not disregarded for you to renovate anything. Once the house is sold and you have more than £16,000 is savings then if your ESA is Income Related then this will end. If part of it is Contributions based then this will continue because it's not means tested. Once your savings drop below £16,000 then you will be able to be re-assessed for the income related top up. This is providing your ESA is not the New style ESA because this is all contributions based.

    If all of it's Income Related and it ends then once your savings go below £16,000 you will need to claim Universal Credit because ESA Income Related no longer exists.

    You need to make sure you report all changes.

    Whether you're entitled to the warm home discount will depend on whether the energy account is in your name, if it isn't then you won't be entitled to it.

    Can't answer the question regarding the council tax but the local Authority in that area will be able to answer that one.


  • Broken
    Broken Online Community Member Posts: 43 Contributor
    Thank you both for your replies. I thought "savings" were £6,000 for ESA and only £16,000 for a pensioner? By the time house move happens I may well be only 4 months away from becoming a pensioner :-). So ... if I put all of the proceeds of the sale of my current house into the purchase of the new one this should not make any difference to my benefits entitlements as they are now (I will still be living alone as a single person, just in an annex instead of my current home).
  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    edited August 2021
    The lower savings limit for those of state pension age are £10,000. There's no upper limit but for every £500 you have over £10,000 then this reduces your means tested benefits by £1.

    The lower limit for those of working age is £6,000. For every £250 over this amount there's a £1 deduction on means tested benefits. The upper limit is £16,000 and this would end entitlement to all means tested benefits.

    Purchasing a new home will not be classed as deprivation of capital. If you have savings left after purchasing your home and they're over £6,000 you will need to report the changes because you will be under state pension age when you purchase the new house.
  • Broken
    Broken Online Community Member Posts: 43 Contributor

    Thank you. So, if I do not have any "savings" over £6,000 I do not need to report this. Do you know if ESA include the costings of solicitors, estate agent fees etc as part of the cost of buying the new home please? i.e. if I have £8,000 left over from house sale but need to use £2,000 for costs incurred for sale and purchase of homes, would this £2000 be taken into account as part of the cost of new home?


  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing
    edited August 2021
    The solicitors fees are not included in your savings. Savings of less than £6,000 are disregarded but this includes all of your savings/capital regardless of where they are.

Categories