House equity, redundancy payment and Housing Benefit

[2013letsdothis]

So, I'm currently separating and the family home will be sold in the next couple of months. Equity is a decent amount and it will be equally split between XDH and I. I will be moving into rental accommodation and will need to spend a large part of the money on a new (second hand) car, deposit for the house, new furniture etc etc.

Parallel to this, I have just been told by my company that I'm being made redundant. They will be paying a redundancy package of a similar value to that of my share of the house equity.

Now, I've read somewhere that the cap for Housing Benefit (which I'm likely to be applying for at least until I find a new job) is £16,000 in savings. The turn2us site though mentions that 'money from the sale proceeds of your home (so long as you intend to use them to buy another home) for up to six months (or longer if it is considered 'reasonable')' are not counted towards savings.

So..my question is, on my claim for Housing Benefit, can I reflect the new car, furniture, deposit etc expenses as spent from the redundancy package and leave the equity money untouched and out of the calculations as my plan is to buy a place in about two years time anyway? (need to rent first to be able to account for Child and Working Tax Credits, as well as child maintenance payments towards the mortgage application).

Btw I have 3DC (all under school age)....

Apologies for the lenghty post, and thank you if you are still reading!

The phrase about ignoring equity from your home for six months (or, with discretion, longer) tells me that no, you'd be getting into potential deep water if you left your share of the equity out of the calculations. Unless I've misunderstood, you'll be 'safe' for six months anyway. Best to come clean.

You can invest the equity from the sale of the house and once the six months' grace period is up, the interest from your invested house money will help to make up the money you'd previously been getting from your housing benefit claim. That will offset your rent costs for the next eighteen months until you buy, looking at it that way.

No you really have to tell them everything you have and then the council decides which (if any) money it will ignore in calculating the benefit due. What you are suggesting sounds like fraud really.
They also won't accept you setting aside pots of money for car and furniture you would need to have already bought those things by the time of application.
Best bet is to take the forms in and ask the council office staff on any sections you aren't sure about.

have you had advice from a solicitor?

It's just that, with 3 young DC, it might not be the right outcome to split the equity equally, nor indeed to sell the home .

apologies if these comments are unwanted, I know you weren't asking for advice about the financial split.