Universal Credit Recipient Anxious Over Inherited Home Impact on Benefits
A person receiving Universal Credit has expressed deep concern about the potential loss of their benefits after inheriting a mortgage-free house from an elderly relative. The individual, who posted on Reddit, explained that the property is left to them and another family member in a 50/50 split, raising questions about how this will affect their financial support during the probate period.
Details of the Inheritance and Current Situation
The Reddit user shared that their elderly family member is nearing the end of life and owns a house with no mortgage or debts, only standard bills. In the will, the estate, including the house, is divided equally between the poster and another relative. The poster currently lives with their partner and child, with the partner working part-time. They receive Universal Credit as a couple, and the poster also gets Limited Capability for Work and Work-Related Activity (LCWRA) payments.
In their post, they wrote: "My elderly family member hasn’t got long left. He owns his house no mortgage. No debts. Just standard bills. In the will, the house and estate is left to me and another family member so 50/50." They added that they are new to the inheritance process and feel overwhelmed by the legal steps involved.
Key Concerns About Universal Credit and Capital Limits
The main worry revolves around the capital limit for Universal Credit, which is set at £16,000. Once an individual's capital exceeds this threshold, they typically become ineligible for benefits. The poster understands that when the house is sold, their share will likely push them over this limit, ending their UC payments. However, they are particularly anxious about the interim period.
They explained: "When my elderly family member passes away as far as I'm aware we have to file for probate to get the house in our names. Then we can sell items and put the house up for sale. When the house is sold my share will end my UC as it’s considerably over £16,000 - that's fine nothing I can do about that. Main question is what happens in between with UC and receiving the share of the house?"
The poster fears that once probate is granted and the house legally becomes half theirs, they might immediately be classified as over the capital limit, losing UC during what could be a lengthy process of selling the property. They estimated that probate, selling items, managing bills, and finalizing the house sale could take a significant amount of time, and without UC, their family would face severe financial hardship.
Expert Advice from Reddit Community
In response, several Reddit users offered guidance based on Department for Work and Pensions (DWP) rules. One user highlighted a crucial exception: If the inheritee takes immediate steps to sell the property, their share of the capital can be disregarded for up to six months, with possible extensions if reasonable progress is made. This means that during this period, the value of the inherited house might not count toward the £16,000 limit, allowing UC payments to continue temporarily.
Another user cautioned: "As soon as the house is yours it’s classed as capital so UC will end." However, a third clarified that decision-makers at the DWP have discretion to disregard the capital for a few months while sale efforts are underway, especially since the property is co-owned. They noted: "You'd have to declare it, and with it being owned 50/50 with the other family member a decision maker could disregard it for a few months whilst you try and sell it, but it technically becomes your capital as soon as it becomes a house you own but don't live in."
Additional advice emphasized the importance of documentation. One person wrote: "Keep records of receiving the inheritance, what your share is, its value, and all the steps you’re taking to sell it. DWP may well ask for any/all of these things." Proper record-keeping can help support a case for disregarding the capital during the sale process.
Outcome and Recommendations
The original poster thanked the community for their insights, responding with: "Noted. Thanks again." This interaction underscores the complexity of benefits rules when dealing with inheritance and highlights the need for clear communication with the DWP.
For individuals in similar situations, it is essential to:
- Declare the inheritance to the DWP promptly.
- Begin the sale process as soon as possible to qualify for capital disregard.
- Maintain detailed records of all steps taken to sell the property.
- Seek professional advice from benefits advisors or legal experts to navigate the probate and benefits systems effectively.
Understanding these rules can help prevent unexpected loss of financial support during transitional periods, ensuring stability for families facing inheritance matters.
