If you are in receipt of any UK benefits, it can be difficult to find out exactly how they will be affected when your circumstances change in certain ways.<\/p>\n
In particular, we are often asked the questions \u201ccan I claim benefits if I sell my house?\u201d, or \u201chow will selling my house affect my benefits?\u201d.<\/p>\n
After all, for many types of support, you are expected to declare any developments regarding your finances as and when they arise.<\/p>\n
In this article, we will explore the issue of selling a house while on benefits. We\u2019ll discuss a range of different types of support and the ways in which they may be affected should the claimant receive a lump sum from the sale of property.<\/p>\n
Your Universal Credit claim is means-tested, which means that your level of income will affect the amount you are able to claim.<\/p>\n
As a result, if you receive a lump sum of money following the sale of property, it may make a difference to the amount of support you are able to access.<\/p>\n
If you or your partner have savings – or are in receipt of \u201ccapital\u201d – to the value of \u00a316,000 or more, you will not be eligible for Universal Credit whatsoever.<\/p>\n
However, if your savings and\/or capital – and that of your partner – fall between \u00a36,000 and \u00a316,000, the DWP will disregard everything up to the first \u00a36,000.<\/p>\n
Beyond that, for every \u00a3250 of savings and\/or capital, the DWP will assume that you are receiving extra income to the tune of \u00a31 per week and reduce the amount of Universal Credit you receive accordingly.<\/p>\n
Any amount that you receive from the sale of property will count as part of your savings\/earnings when it comes to calculating the amount of Universal Credit you may receive.<\/p>\n
If you\u2019re wondering \u201ccan I sell my house and claim housing benefit?\u201d, read on.<\/p>\n
Housing Benefit is provided to individuals who require financial assistance when paying rent, so it is not available for homeowners.<\/p>\n
This benefit is being slowly phased out, and will eventually be replaced by Universal Credit.<\/p>\n
It\u2019s also means-tested, which means that any additional amount received above the income usually <\/b>earned by the claimant will be taken into account by the relevant local authority, and will need to be declared.<\/p>\n
If the amount constitutes a large lump sum, it will usually be assumed that the claimant has earned enough income to no longer be eligible for benefits of this kind.<\/p>\n
For this reason, it\u2019s important to be open about this matter with your local authority as soon as you learn about any additional expected income.<\/p>\n
Homeowners may be able to apply for SMI to help them with their mortgage interest payments. Claimants become eligible for this support once they have been on benefits for 39 weeks solidly.<\/p>\n
There are further criteria that you\u2019ll need to meet in order to claim SMI. You can find this on the gov.uk website<\/a>.<\/p>\n It is important to note that Support for Mortgage Interest is a repayable loan, and must be paid back with interest upon the sale of your property.<\/p>\n ESA is provided for individuals who are unable to work due to a disability or illness.<\/p>\n Contribution-based ESA is not means-tested, which means that it will not usually be affected by a claimant\u2019s income. However, if there has been a major change to your finances when claiming ESA, you should declare this to the Department for Work and Pensions.<\/p>\n In certain circumstances, they may instruct you to switch over to Universal Credit.<\/p>\n If you receive income-related ESA (which is <\/i>means-tested) and you are selling your home, it is vital that the DWP is notified of any money you make from the transaction within one month.<\/p>\n If you are planning to use the income from the property sale in order to buy a new home, the DWP will disregard the amount for a minimum of 6 months, which means it shouldn\u2019t have any impact on your benefits.<\/p>\n Pension Credit is a benefit designed to support anyone on a low income who is aged 65 or over, or who reached State Pension age before 6 April 2016.<\/p>\n As this type of support is means-tested, the receipt of a lump sum from a property sale will affect what someone previously in receipt of pension credit can claim.<\/p>\n Again, this means that anyone in receipt of Pension Credit should speak to the DWP regarding any additional income straight away.<\/p>\n Income Support is another benefit that will eventually be replaced by Universal Credit. As such, it is managed in a similar manner.<\/p>\n The cut-off threshold of \u00a316,000 applies here, as with Universal Credit. That is, if you or your partner have savings or capital worth \u00a316,000 or above, you will not be eligible for this benefit.<\/p>\n If you have an amount between \u00a36,000 and \u00a316,000, the aforementioned \u201cassumed \u00a31 of income for every \u00a3250 over the \u00a36,000 mark\u201d rule comes into play (see the Universal Credit section above).<\/p>\n If the amount is below \u00a36,000, your savings and capital won\u2019t be taken into account.<\/p>\n For this reason, it\u2019s extremely important to get in touch with the DWP whenever you expect to receive a lump sum of money or a one-off financial windfall whilst claiming Income Support.<\/p>\n This way, you can let them know exactly how much you expect to receive – and explain to them that this will not be a recurring event. You should also notify them of whether the amount you are declaring is confirmed, or whether it is just an estimate.<\/p>\n While new JSA applicants are no longer divided into \u201cmeans-tested\u201d and \u201ccontribution-based\u201d categories, claimants who already receive support of this kind may still fall into these pigeonholes and so will need to know what to do if they receive money from a property sale.<\/p>\n As is the case with all of the means-tested benefits mentioned above, if you receive means-tested JSA, it is likely to be affected if you receive a lump sum from a property sale.<\/p>\n However, benefits of this kind are being phased out, and new claimants will receive contribution-based support across the board, which is not affected by savings or capital.<\/p>\n PIP is a form of support for adults living with a disability or long-term illness. It is not means-tested, which means that income from a property sale will not be taken into account if you are in receipt of benefits of this kind.<\/p>\n Only those who are already in receipt of tax credits may make an application for support of this kind, as it has officially been phased out and replaced with Universal Credit.<\/p>\n Tax Credits are slightly more complex, as there are very particular ways in which \u201cdisregards\u201d are calculated. These are sums that are subtracted from the claimant\u2019s gross income in order to calculate the final amount upon which the support will be based.<\/p>\n The two sums that inform these calculations are known as Current Year Income, or \u201cCYI\u201d, and Previous Year Income, or \u201cPYI\u201d.<\/p>\n PYI is used to calculate your tax credits if it is lower than CYI by less than<\/b> \u00a32,500.<\/p>\n On the other hand, your benefits will be based on CYI minus \u00a32,500 if CYI is higher than PYI by more than<\/b> \u00a32,500.<\/p>\n Any profits you receive due to selling or renting out property will be considered \u201cincome\u201d for the purposes of these calculations.<\/p>\n As mentioned above, benefit claimants are usually expected to speak to the DWP – or their local authority, depending on who manages their specific type of support – about any adjustments to their circumstances within one month of those changes occurring.<\/p>\n So, when it comes to selling property while on benefits or employment support allowances of any kind, it\u2019s important to thoroughly understand the way in which a one-off lump sum is likely to impact the specific type of support you receive.<\/p>\n As soon as you know the amount you are likely to make from the sale of your property, you should inform your provider.<\/p>\n We hope that this guide has helped to clarify the matter of selling a house while claiming benefits in the UK.<\/p>\n If you wish to know anything about selling your property quickly and in a hassle-free manner, don\u2019t hesitate to get in touch<\/a> with our knowledgeable team of experts today. We will be very happy to provide you with the assistance you need.<\/p>\n","protected":false},"excerpt":{"rendered":"ESA (Employment and Support Allowance)<\/h2>\n
Pension Credit<\/h2>\n
Income Support<\/h2>\n
Jobseeker\u2019s Allowance<\/h2>\n
Personal Independence Payment (PIP)<\/h2>\n
Tax Credits<\/h2>\n
When Should I Declare My Income From Selling Property to the DWP?<\/h2>\n
Any Questions?<\/h2>\n