Benefits/owning a property not your home
Jul 8th 2009, 10:06 pm
#1
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Joined: Jan 2008
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Benefits/owning a property not your home
There was a thread here, since deleted, that contained some info that may be useful to people returning to the UK.
It concerns claiming UK benefits while owning a home other than the address one would be claiming from.
It's not that unusual and may be more common now as many people appear to have been unable to sell their UK homes; perhaps renting them out while living abroad.
It is possible to claim benefits while owning a property that is not the one lived in. It will depend on what equity there may be.
One can have total capital of up to £16k and still qualify for means tested benefits. Pensioners can have more.
In these times of a slump in property values, some homes may have lower equity that may still mean benefits could be due.
As a rough example one could own a home now worth £150k. Now, I haven't worked in DWP/DSS for 5 years but in the 30 odd years before that, in this situation we would ignore 10% of a property value to cover selling costs. So that brings the value of the asset (once sold) down to £135k.
If there was a mortgage on the property of under £119k then a "net" value (if sold) exceeding £16k would remove benefit entitlements.
But a mortgage of £120k on such a property means the "net" value (if sold) is under £16K and, unless there were other capital assets, that would not mean benefits were not due.
Basically one can say that if the difference between 90% of property value and mortgage is under £16k, there may still be benefit entitlement.
Another consideration is that even where the value after selling would exceed the £16k, one needs time to realise that value and for Benefit purposes one is generally allowed 6 months to sell and for that period (longer if reasonable) the value would be ignored completely.
One can't necessarily return to the UK, evict tenants and go and live there instead. Life's not always that simple.
So there is some flexibility for people finding themselves going back to the UK but, for whatever reason, not living in a property they own and still having a benefit entitlement.
Things do change. It's possible there have been changes. But I do try to keep up and I've not heard of any changes regarding this aspect.
There is, of course, the likelihood that rental income would be deducted from benefits and that may rule out entitlement too; depending on what expenses (like the mortgage) would offset the rent.
It concerns claiming UK benefits while owning a home other than the address one would be claiming from.
It's not that unusual and may be more common now as many people appear to have been unable to sell their UK homes; perhaps renting them out while living abroad.
It is possible to claim benefits while owning a property that is not the one lived in. It will depend on what equity there may be.
One can have total capital of up to £16k and still qualify for means tested benefits. Pensioners can have more.
In these times of a slump in property values, some homes may have lower equity that may still mean benefits could be due.
As a rough example one could own a home now worth £150k. Now, I haven't worked in DWP/DSS for 5 years but in the 30 odd years before that, in this situation we would ignore 10% of a property value to cover selling costs. So that brings the value of the asset (once sold) down to £135k.
If there was a mortgage on the property of under £119k then a "net" value (if sold) exceeding £16k would remove benefit entitlements.
But a mortgage of £120k on such a property means the "net" value (if sold) is under £16K and, unless there were other capital assets, that would not mean benefits were not due.
Basically one can say that if the difference between 90% of property value and mortgage is under £16k, there may still be benefit entitlement.
Another consideration is that even where the value after selling would exceed the £16k, one needs time to realise that value and for Benefit purposes one is generally allowed 6 months to sell and for that period (longer if reasonable) the value would be ignored completely.
One can't necessarily return to the UK, evict tenants and go and live there instead. Life's not always that simple.
So there is some flexibility for people finding themselves going back to the UK but, for whatever reason, not living in a property they own and still having a benefit entitlement.
Things do change. It's possible there have been changes. But I do try to keep up and I've not heard of any changes regarding this aspect.
There is, of course, the likelihood that rental income would be deducted from benefits and that may rule out entitlement too; depending on what expenses (like the mortgage) would offset the rent.
