Disregarded capital

Cl has gained c. £98,000.00 from the sale of a house after paying all the fees etc. The whole sum is to be used as a deposit or to buy a share in a shared ownership home.

I can see from UC letters that UC are only treating just under £90,000.00 as disregarded capital and when the extra c.£8000.00 is added to the cl’s other savings they are over the capital limit for UC and the claim was refused.

nb The bid for shared ownership is apparently foundering as the cl can’t get UC and this is basic requirement for the scheme they are interested in ( I must confess that I have not checked this bit)

I have looked at Reg 48 and Sch 10 of the UC regs and I can’t see anything that limits how much can be disregarded, as it doesn’t seem to set any limit (like the ones in the SMI regs for example) I would assume that the disregard would be the amount gained from selling the first house provided it is to be used for the next one. (The cl says that in fact they need £101,000.00 for the share of the property they have in mind.)

Have I missed something here, I would be grateful for any observations or guidance to regulations to either confirm or deny my assumptions

There isn’t really anything more to it.

If you receive funds from the sale of your home and you intend to use them to buy your new home, then they are disregarded for 6 months and for such period thereafter as is reasonable.

Perhaps, in a given case, the DWP may be able to say that the sale proceeds are more than the claimant actually intends to spend on the new property, so the excess should not be disregarded. However there isn’t really an upper limit as to what you can spend on a house and there aren’t any restrictions or limits on the sort of house you wish to buy.

After the six month point as well, the continued application of the disregard must be ‘reasonable’. It might be that the DWP could argue that it is ‘reasonable’ to disregard a figure which would be sufficient to purchase whatever the DWP might think is a reasonably priced house of sufficient size but that it is not reasonable to extend the disregard in relation to the rest of the proceeds.

But this is really just guesswork. I suppose you would need to have a look at the DM’s reasoning to figure it out.