Family Home (no longer occupied) = Reduced Benfits

Background:

The wife and I have had an incredibly troubled 9 year marriage, 14 months ago I decided enough was enough and made it known that a split/divorce was on the cards; two months later she informed me that given my feelings she couldn’t remain in the house and would consequently be moving out.

It’s been 12+ months since she got her own place (a small yet smart new-build), I still have the family home (we really hope it’ll be sold this year) and am paying the mortgage unsupported. Regrettably the wife is no longer able to work and now claims via the benefits system, we both hope she’ll improve and that work will once again become possible.

Our split is for the most part amicable, we have nothing to do with one another and there are no dependants.

I plan to begin divorce proceedings Dec 2011 (the two year marker) since justifications are unnecessary if both parties are in agreement, this is the wifes preferred route.


The Problem:

My wife’s benefits have recently been reduced (by a significant amount, and a back-payment has also been requested) apparently due to the fact she holds a stake in the family home.

It’s fair to say that she didn’t receive much in the way of benefits in the first instance, rather just enough to get by (that’s the general idea I guess); regrettably given the large mortgage I am unable to assist her enough to offset this benefit payment loss.

Day to day life has become as I understand it, quite difficult for her.


Our Thoughts:

Bizarrely trust isn’t an issue between us, at least when it comes to money (neither of us are greedy or materialistic) this has prompted the suggestion that we simply remove her from the deeds.

This could offer a quick temporary solution since I cannot afford to keep the house in any case and must get rid in the short to mid-term, legally speaking of course we are each entitled to 50% of the joint assets regardless of paperwork.

It’s perhaps also worth pointing out that there's little in the way of equity remaining in the property (perhaps somewhere between £5k & £10k).


Our Question:

Will removing her from the deeds improve her benefits situation, if not are there any other routes/actions that we can take to improve her position?

…I’m sorry if I’ve rambled on a little!

Many Thanks

I don't do CAB any more, and really have no wish to go back, but I remember enough to know that the subject you have touched on is very very technical and it would be unsafe of me to give you more than general pointers. Rules change and there is a danger of giving advice which is out of date.

First : many people who work in ' the system ' don't really understand the minor points and the small print. To them, capital disqualifies you from benefits. But it is not quite that simple. And to be fair, paying what they do, the DWP can't expect their average clerks to understand all the complexities.

Second : If the equity is less than £12K and you each own half, she is below the level where capital affects benefits. If the only reason her benefits have been reduced because she has a half share in your house and that half share is below £6K then it should be ignored and even if the share is more than that, but below £16K, it doesn't disqualify her altogether.

Third : be careful about transferring her share in the house to you. It might not work.

Fourth : there are are special rules about houses and you need to check them out. As a matter of general principle, capital is taken into account if it is readily realisable. There is a reason for this ; the idea is to force the claimant to live off capital until it is reduced to a certain figure. If you can't ' get at ' the money, this would be harsh.

So then, the advice is : see a CAB as soon as possible and check out the current rules. At least the advice will be free and frankly, most solicitors wouldn't know the answer either.

LMM