A considerable number of Housing Benefits (HB) recipients are reported selling their homes and asking the same questions as being discussed here and on different online social forums. It is hoped that this article will give clear answers to the inquiries, as we noticed on social media.
As a direct answer to the question being raised here, once a qualified housing benefits recipient has decided to sell his/her house, the government will presume that you earned a large enough amount of money to no longer be eligible to receive housing benefits.
Based on experience, according to moneysavingexpert.com, “in any sale of property that leads to a HB claim, the Local Authority will check the Land Registry Office records and establish the surplus capital, which they will then expect to see declared by the HB applicant. Any discrepancy would have to be fully explained and could result in the applicant being treated as if they still have the full amount. There are very few ways to hide/move/dispose of capital that would be accepted. However, if you have any significant debts apart from the mortgage (credit cards etc.), you may find that you can pay those off without penalty”.
It is always appropriate to refer the subject matter to the proper authorities and personnel who have actual experience based on the question being raised here. Therefore, we can only discuss and make suggestions based on the information gathered from the U.K. government (GOV.UK) website regarding legal housing provisions.
These benefits are only granted to selected citizens under the following conditions, to wit:
- If you are unemployed or on an income of £16,000.00 or less annually
- If you are receiving severe disability premium, or are entitled to it
- If you have or were entitled to the severe disability premium within the last month and are still eligible for it
- You have reached State Pension age
- You live in temporary accommodation
- If you are residing in sheltered housing with special amenities and facilities such as alarms or wardens
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It is being advised to anyone who applies for these benefits that if the required conditions are not met, “you’ll need to claim Universal Credit instead”… and “to use a benefits calculator to verify whether or not you can get a Housing Benefit before you apply”.
A HB beneficiary will be disqualified from receiving government assistance under the following conditions if:
- Your savings are over £16,000 annually – unless you receive Guarantee Credit of Pension Credit
- You are paying a mortgage on your own home – you may be able to get Support for Mortgage Interest (SMI)
- You are staying in a house with a close family member or relative.
- You are already claiming Universal Credit (unless you’re in temporary or supported housing)
- Your partner is already claiming Housing Benefit
- You are a full-time student, that is, unless you have a disability
- You are residing in the UK as a European Economic Area jobseeker
- You are an asylum seeker or sponsored to be in the UK
- You are under or subject to immigration control and if you are granted to leave states that you cannot claim public funds
- You’re a Crown Tenant
Based on some online public forums under the subject: “Housing Benefit 5-Year Rule”, many have presumed that a ‘5-year rule is’ being observed by the council that is assigned by the government. This requires the house owner to live in the same house for at least five years or continuously pay within that period if your property is still under a mortgage.
Although there is no official policy for that matter, the same mentioned forum members believed that it is practical to observe that rule in order to make a better deal when you will finally decide to sell your property. You will likely have a very good price because, under normal conditions, property valuation increases annually.
On the other hand, according to the website of ‘moneysavingexpert.com’, “there were actual experiences of two people that sold their houses, banked the capital, went on a world tour with some of the proceeds, and still claimed full HB/CTB on their return while retaining about 3/4 of the sale capital in savings – they were never checked and to this day kept the balance in their names…I’d prefer to avoid than evade” was the given advice of one reactor.
It is highly discouraged to disobey what the government have required to the beneficiaries of HB grants for it is important that we should be always honest in making any legal transactions. After all, the authorities could investigate the matter and discover the hidden discrepancies. If citizens are to remain truthful and industrious, humbly appealing to the assigned council is possible to make them understand a bad financial condition. There may be human considerations and extensions of mortgage payments if one requires it.