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    Disregard of capital post divorce

    Hello,

    I am newly divorced and currently selling our flat with the proceeds being split 50/50 between me and my ex husband. I need to stay in the area because of the childrens school and am hoping to find a shared ownership but I have to rent first because you cant get a shared ownership when you are currently a home owner.

    My questions are;

    if I update my UC claim to explain the large lump sum coming into my account for the flat sale, stating that is it to be used as a deposit for a new home, how long can I have it for without if affecting my UC? (I imagine it will take me 6 months to find an appropriate shared ownership)

    I cant currently claim any housing support as part of my UC as I'm paying a mortgage but once I've sold I'll be paying rent. Will I be able to claim the housing element when I'm renting despite having the deposit capital in my bank? How do I work out how much support I am entitled to for help with rent?

    Thanks so much


    #2
    Originally posted by discoball View Post
    Hello,

    I am newly divorced and currently selling our flat with the proceeds being split 50/50 between me and my ex husband. I need to stay in the area because of the childrens school and am hoping to find a shared ownership but I have to rent first because you cant get a shared ownership when you are currently a home owner.

    My questions are;

    if I update my UC claim to explain the large lump sum coming into my account for the flat sale, stating that is it to be used as a deposit for a new home, how long can I have it for without if affecting my UC? (I imagine it will take me 6 months to find an appropriate shared ownership)

    I cant currently claim any housing support as part of my UC as I'm paying a mortgage but once I've sold I'll be paying rent. Will I be able to claim the housing element when I'm renting despite having the deposit capital in my bank? How do I work out how much support I am entitled to for help with rent?

    Thanks so much
    Welcome to the community discoball

    If your 'regarded capital' is below £16,000 and you claim UC, your UC should include housing element while you rent whether you are a homeowner or not.
    You would also have housing element included while you rent even if you have 'disregarded capital' in the bank from the sale of the home.

    So the rules state:
    If a person has received an amount within the past 6 months which is to be used to purchase premises that the person intends to occupy as their home, that amount can be disregarded from the calculation of the claimants’ capital where it:
    • comes from the proceeds of the sale of premises formerly occupied as the person’s home
    • has been deposited with a housing association as a condition of the person occupying premises as their home, or
    • is a grant made to the person for the sole purpose of purchasing a home
    it is reasonable to disregard the amount for a longer period if, for example:
    • people have tried but not found premises which are suitable for their or a member of their family's needs (in particular, if one of them is disabled and needs a certain type of accommodation)
    • the person has found premises and the
    • sale has not been completed, or
    • the seller later decides not to sell
    It would be up to Universal Credit Decision Maker if the money from the sale of the home should be disregarded and you would have the opportunity to explain the situation and provide any evidence.
    What you have said about not being able to get a shared ownership while a homeowner does sound like a reason that they money should be disregarded.

    These disregards may enable you to move out the owned home and have the capital disregarded before the sale (if you want to do this):
    • If a person no longer occupies premises as their home following separation from their former partner, those premises can be disregarded from the calculation of capital where they have stopped living in those premises within the past 6 months.
    • If a person is trying to dispose of premises, they can be disregarded from the calculation of capital where they are taking reasonable steps to dispose of the premises and those steps started within the last 6 months. It may be reasonable to disregard the premises for a longer period where, for example - the person has done all they can to sell the premises and the asking price is no more than the premises are worth.
    So to answer your questions:
    if I update my UC claim to explain the large lump sum coming into my account for the flat sale, stating that is it to be used as a deposit for a new home, how long can I have it for without if affecting my UC? (I imagine it will take me 6 months to find an appropriate shared ownership)
    Essentially it would be up to a UC Decision Maker if the money can be disregarded but if they can reasonably believe it will be used to purchase a new home, 6 months disregard or longer.

    I cant currently claim any housing support as part of my UC as I'm paying a mortgage but once I've sold I'll be paying rent. Will I be able to claim the housing element when I'm renting despite having the deposit capital in my bank? How do I work out how much support I am entitled to for help with rent?
    As I explained above, if you start renting before then and you are entitled to UC because capital is disregarded, you can have housing element even while paying a mortgage.
    I assume it will be private renting you are doing and UC uses LHA rate. You would be entitled to housing element up to the amount of LHA rate for your circumstances. If your actual rent is lower, your housing element will equal your rent. Let me know if you need help working this out. https://lha-direct.voa.gov.uk/Search.aspx

    I am sure you will have a lot of questions after reading all this so please let me know what I can explain more for you.

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