Renting and benefits

[lurkinginthenorth]

I am not sure if this is the right place to post, but would like to ask a question regarding my mother.

She is 56, recently divorced. She works part time (26 hours) on a little more than minimum wage and earns roughly £780 a month.

She is living with us atm until her financial settlement is agreed.

If she has no money behind her, what benefits is she likely to receive to help her with rent and living costs?

Is she entitled to benefits of any kind if she has money behind her (e.g. £70,000)?

Rent (at the cheapest!) is currently about £400. That leaves her with £300 a month for; utilities, council tax, phone, food, car, insurances etc, etc.

She cannot possibly live on that!

Is she entitled to benefits such as housing benefit or working tax credits etc?

There are online benefits checkers and CAB are a good place to start but I suspect her savings would exclude her from most things.

can she move any of her lump sum in to a house/flat to live in or into a pension?

Sadly - because she has savings (and hasn't spent it all having fun), she probably doesn't 'need' benefits, from what you have written, there doesn't seem to be a reason why she is part time...

A car is a luxury (unless of course you need it to get to work, because there is no bus/train service)

Whereabouts are you?

The settlement is not made yet. This is a possibility. At the moment, she has nothing - zero.
Yes car is a necessity to get to work - we are in a rural county.
£70,000 is not money you can live on. It soon goes! Part time hours is all she can get - She was lucky to get 26 hours!

We are hoping to use the money (if she gets it) to build a bungalow on our land. That way she will be rent/mortgage free. But not sure if £780 is enough to live on anyways! But she isn't 100% keen.

I said it is the best decision because of she doesn't, she'll have to rent/go housing association and even after being made homeless, her last county (city) were useless at finding her something - hence why she is living with me!

Www.entitledto.org.uk

Is her retirement 68? If so she can just spend the 70k supporting herself when she gets it over the next 14 years. It will cover her rent/bills etc. She probably won't need more? Unless there's anything you've not said?

Then when she's pensionable age she will get housing benefit plus pension/income support. Her income would be roughly what it is now.

70k is a good sum and she can probably make it last if she's careful. If she retires at 65 then it's just the 9 years so she's even better off.

So at the moment - she doesnt have the cash - so you can really discount that when looking at what she has

go to the sites that Neffi suggested

70,000 is not a lot to live on and she deserves benefits? Are you joking?

£70k is a lot of money to have as a safety net

People who have savings of this amount don't actually 'need' benefits

Looking at the figures then I suspect the only benefit she could claim would be housing benefit and that would be very little if anything and that is assuming no money behind her, if she gets the £70k then she won't qualify for any help at all. It is possible that once she gets to 60 she will qualify for help from working tax credits as the minimum work hours drops from 30 to 16 at that point but I wouldn't like to guarantee that the situation won't have changed in the next 4 years so isn't worth counting on.

She will get housing benefit at the minute. Generally housing benefit is stopped completely when someone has £16000 savings. It starts reducing when you have about £3000 I think.

She will probably be entitled to housing benefit until she gets the lump sum.

£70000 is plenty to live on for a couple of years! With a job on top it is a huge safety net. That is a lot of money.

The £70k is in doubt and the "she cannot possibly live on that" was based purely on a wage of £780 PCM and rent of £400 PCM.

OP she should spply on the basis of her current position but be aware benefits may change if she gets a large settlement of the savings.

She won't get benefits with 70k in the bank. DWP will expect her to live off of it until it goes down to a certain point. No sense in spending it all quickly to qualify either. They will calculate how long it should have lasted and she wouldn't qualify until after that date. It might not feel like it right now, but she is in a relatively better position than this who do qualify.

The 70k would not affect tax credits however I doubt she would be entitled as a single person.

Thanks for the info!

I know what you mean by '£70,000 and not needing benefits'. She doesn't want money she has worked so hard for (last 40 years) to be swallowed up trying to make ends meet. She would like (just like most people) for that money to be saved for 'rainy days', grandchildren etc. She actually is desperate for a new car. Not a NEW car but a 'new' car that isn't falling to bits and costing her a fortune every month to maintain. Her current car is well and truly old! She needs reliability to drive to work - not work = no pay!

Not sure of her pensionable age. As she is 56, I am assuming it is 65?

Had a chat today and I am completely blind to what is a 'liveable wage' and I assumed that £1200 a month would be okay to live on? Factor in rent, electricity, gas, telephone, internet, council tax, content insurance, TV licence, food, fuel, car insurance (money aside for the unexpected!) - am I missing anything? THIS is ll assuming the judge awards her what we 'expect' although I am optimisitic in thinking it could be more.

TBH, the bungalow build is a better option IMO. She is not liking the idea of not owning it outright (we own the land) and I have said that we have spoken to our solicitor who is more than happy to draw up a contract to protect us all (she'll never be turfed out, if either part wants to sell with the other party's agreement then we get back what we put in plus any uplift linked to the percentage of ownership - if that makes sense?) It would use up all/most of her money but at least she will have £750+ (no idea, but about that) to spend 'as she sees fit'. BUT it is whether she will be entitled to benefits at pensionable age as I am assuming she would have to declare she lives in her own property/a property owned by us??

It's all very confusing!

Yes it would be better to put the money into building a bungalow as she would not get any help with £70k in the bank.

Unfortunately, unless she can support herself, she doesn't get the choice about what the spend the £70k on. That's not a judgement, it's how the welfare system works in our country.

With the £70k, she won't be entitled to anything, barring a disability.

On £780 a month she may be entitled to help with rent and council tax, depending on where she lives and what the local allowance is. She could find out by visiting the Entitled To website and inputting her details.

If she spent the £70k on a bungalow, she'd own a house, so she wouldn't be entitled to help with rent/mortgage. If she has an entitlement to any income top-ups (again you can find out on the Entitled To website) she should still be entitled to those, although she may be investigated for Deprivation of capital - essentially they'd decide whether she spent the 70k in order to receive benefits. It's complicated, but building a new house could qualify. You'd want to keep quotations for the work and paperwork, showing it was the best and cheapest option. If there is anything left from the 70k, she'll want to keep receipts for those purchases too. If she's left with over 16k, she still won't be entitled, if between 6 and 16k, she'll have reduced benefits. This is judged by individual assessors and can be very difficult to understand, but if she falls foul of it, she'll be treated as if she still had the 70k.

What has her solicitor said about her financial settlement? Does he think what you are expecting is reasonable and likely?

She may, unfortunately, have to live off her financial settlement in the way that it's intended, and look for a full-time job to make up the difference in quality of life and allow her to save for future grandchildren etc. That might seem like a rough deal now, but I'd be hesitant about relying on benefits at the moment anyway, and I expect any entitlement she does have now will drop when Universal Credit rolls out.

She would be mortgage and rent free in the built bungalow. She wouldn't own it (on our land) and if it would help her, we'd put it in our name. The intention is she lives rent/mortgage free but 'hopefully' get some support from the state to top up her wage.
My MIL lives with us and gets 2 private pensions (totally about £300 together) but with various benefits etc she gets £1500 a month!!!

If the house is hers it would not be deprivation of capital. If it is your house it most likely would be as she has " given the money away.

If she doesn't own the house, she may be treated as if she still has £70k, as it would be seen as a trick to get benefits.

Also I don't see why she wouldn't own a percentage of the house? Seems a very strange set up.

Why would the house be purely in your name if she has put £70k into it? Purely so she can get benefits?

When I look at the area I live in, the maximum she would get without savings is £1380 and that is for housing benefit. She works to few hours to get anything else.
With savings she would get nothing.
Obviously the amount depends on where you live, and remember if she rents, the bedroom tax applies.

Op, it IS a rainy day.

You have both parents living with you? That's heroic!

Agree she will need to own some of the house, you could part own if you contribute of course.