will lump sum affect benefits

Can anyone advise please.
My wife and I are divorcing. We are both living in the marital home still. When the house is sold or she manages to get a remortgage sorted , I will get a lump sum.

I want to purchase a cheap property as my new home with this money. If I do so what would happen to my benefits as I lost my job and am on ESA due to ill health. I have cfs/me and dont know if or when I will get better.

Is property just classed as property or when the money is released does it then get classed as finances even though it is to be used asap to purchase another home for myself.

I dont want to rent for the rest of my life if possible. And I wouldnt get a mortgage whilst ill and on benefits.

I would appreciate any advice on this, thanks ...Don...

When property is sold and you receive a lump sum, that will effect your benefits and may disentitle you depending upon the amount that you receive.

for example, it stands to reason that the government would not pay housing benefit to a person who is sitting on a lump of cash on the basis that they intend to buy a property at some point.

You have to inform the benefits agency when your circumstances change therefore I would suggest arranging to purchase a property before you receive the lump sum if at all possible otherwise you will be living off that lump sum until you purchase a property or the lump sum falls under the capital allowance for the benefits you are receiving.

Before anybody asks, you cannot instruct your solicitor to hold onto the funds until you find a property as the money will be yours wherever it rests.

Charles

Thanks Charles for your advice.

I do intend to inform the benefits office when circumstances change.

I understand that I will not recieve benefits when in possession of the lump sum money.

I wandered that when I purchase another property, would I then be able to reapply for benefits and be entitled to them as the money would be spent on a new home.
This is the point I was trying to make.

Can I assume that you are saying that I would be entitled to benefits again after the purchase of the 'new' home. As I would have little cash left over.

I take your point also that timing is important.

Thanks...Don...

You need to check with the benefit agency

Certianly it was the case that, and for some benefits, in cases of marital breakdown, money from the sale of one home which is to be used to buy a new home may be ignored for a limited period - from memory, this can be for up to six months.
I have come across it where the benefit in question is Income Support so you would need to check whether it applies to ESA. (and to check that it is still current - as I don't provide benefiots advice it is about 18 months since I las t had an update on this specific point)

As far as I know, if you can arrange the timing so that your new property is purchased immediately (i.e, there is no intermediate period when you rent) then your benefit entitlement will not be affected.

But do double check first so you know where you stand, and can show that you have kept the benefits agency full informed throughout.

Thanks TBagpuss,

I hope that the 6 month rule applies, it would make things a lot easier.

Looks like I will need to make that call to the benefits agency.

Thanks again ...Don...