CB ESA to IB ESA Whilst Owning Property

This has probably been covered before but need clarification and advice please (have been outside the loop for some time).

Client has been in recipe of Cont Based ESA for approx. 12 months.

DWP have advised him that his ESA award will change to Income Based.

Client is currently in the support group.

NB Client co owns a house with his ex-partner where she and his two (2) kids live, 13 year old daughter and 18 year old son. Ex partner works part time.

Client has moved out of the family home some 12 months ago and claims HB for another accommodation.

Question - Can the DWP force the client to attempt to sell the property (current approx. price £140k) for a reasonable price in order to share the proceeds and therefore come off IB based benefits, or is this not possible as the 13 year old has a right to continue to live at the family home until 18 etc.

Any views would be appreciated.

J.Mckendrick - 02 June 2017 09:46 AM

Question - Can the DWP force the client to attempt to sell the property (current approx. price £140k) for a reasonable price in order to share the proceeds and therefore come off IB based benefit

This is not how it works.  They will assess a value of his interest in the property as capital.  That amount will then be used in the normal way in the assessment of benefit, including the £16,000 cut-off.

The valuation is the issue as they may start with 50%.  The real value with a sitting co-owner who is non-cooperative will, of course, be much less.  There are a number of threads discussing this.

Dear Gareth, thanks for your time. So if the DWP and LA say he owns half the property ie £70k then he won’t be entitled to any income based benefit. Just another point though what is the concept when someone starts off on CB ESA in the support group! Is there something where as long as they remain in the support group after 12 months, are they still entitled to the ESA support group payments even if they have savings over £16k.

If he is in the support group then his contributory ESA should continue as it has been for the last year - see CPAG pg 645.

Just as an aside I think Gareth’s point on the value of the property is that it would not be 70K as you could not sell his half with the sitting co-owner for anything like that price - noone would buy half a property in that situation - so it may well be that is has no market value.

Dear J McKendrick,

I am a bit confused by some of the terms in your enquiry.

Contributory ESA is not limited to 365 days entitlement if a claimant has been put in the Support Group. You may wish to check that the DWP are not suggesting that the client’s Contributory ESA is to terminate because of the time limit grounds (Welfare Reform Act 2007 section 1A). Obviously, if continuing entitlement to Contributory ESA is established, then the question of the value of the former home is irrelevant.

Furthermore, if the client has an entitlement to income related ESA on top of their entitlement to Contributory ESA, then the value of a former home, that is still occupied by a former partner who is a lone parent, is disregarded as long as they continue to live there (ESA Regs Schedule 9 Para 5).

I think that these issues are answering your question in a different way.

Cheers

Chris Browne

Many thanks all. have just confirmed with client that the DWP notified his change to IB ESA before attending a medical where he was placed in the support group before the 365 days were up.

also, the value of the property has to be taken NET of mortgage.  so if there is a mortgage that has to be paid off and you may well find that taking that, and wife’s interest, into account it has no value at all.

You said HB is in payment. With any luck, the local authority have already established that the property can either be disregarded or is below the capital limit. DWP are not necessarily obliged to follow the LA decision, but if it was made in possession of all the relevant facts there is no reason why they wouldn’t.

If the claimant used to live there and left when they split up with the former partner and the former partner is a lone parent (sound like she is)then it can be disregarded anyway sch 9 para 5 ESA Regs.

FAO Chris,

Re your post dated 2/6/17 at 10.50am, does the disregard rule also apply the very same way if client were to claim CB JSA and take up his own accommodation ie the family home where his wife and children reside (which is owned) will be disregarded for client’s new claim.