Earlier this month I saw a case worker from my local Citizens Advice Bureau. I asked their advice about benefit en­title­ment.

I am still living in my STBX matrimonial home which I part own. Me and my STBX husband are in the process of getting divorced. STBX is currently applying for a remortgage of the home which could yield a lump sum of approx' £35.000 (for me) and the property would be transferred into his name alone.

I have two children (under 16) and STBX receives Child Tax Credit and Child Benefit for them. The Department of Work and Pensions (DWP) accepts that me and my STBX and are separated while living under the same roof. Therefore, I receive £86.35 per week Income Support as a single person. I also receive Disability living allowance (approx' £18.00 per week).

With regard to how this will affect any state benefits I might receive: the CAB advises that a lump sum settlement of £35K would but my savings/ capital above £16K. This would mean I would lose my en­title­ment to any means tested benefit (my Income support would stop). Once my savings were reduced to less than £16K, I may be en­title­d to means tested benefits depending on my circumstances. (Have been advised to keep records of how savings are spent.)

At Family Mediation, I was advised that, maybe, the court could order for the divorce settlement to be paid in instalments of £3,000 per year. CAB says that although this would not take me over the capital limits- I would have to notify the DWP of the balance of money still owed to me. This could still affect my en­title­ments as the DWP may consider I am depriving myself of capital just to increase my benefit en­title­ment and could be treated as still possessing all of the £35K.

Also, if I receive a lump sum I will need to inform my debt advisor as my change in financial circumstances may affect my liability to pay my debts (£25K on different credit cards).

This seems like a very awkward situation and I am not sure which is the best way to go with this. My solicitor has been demanding to know what my STBX can really afford. What he has offered so far will not be enough to 'buy me a house' the solicitor says. But I cannot see how my STBX can afford to offer any more than he has. Anyway, if I did buy a property or part-share in a property, my creditors could come after my property to pay my debts.

The dilemma is that £35K is not enough to buy or pay for part of a property yet £35K is too much to qualify for state benefits. (It would be used very quickly on living expenses - but the first £25K would have to be used to pay my debts anyway.)

Our divorce goes to court in early November 2008 to reach an agreement over financial matters. I am worried because I don't think I am going to get a fair settlement. I somtimes wonder who my solicitor is working for - she seems to listen to my husband's side of things more than my needs.

I suppose I am too easy to overlook because I have mental health problems while my husband is a school teacher with a regular salary and can pay the mortgage on the STBX marital home. (It is too much upheaval for the children to leave their current home - and I am currently unable to work, due to ill-health - and provide a roof for them. I am afraid I will not get a fair hearing and that all the sympathy will go to my STBX as the 'lone father'.

I don't know how I am going to survive in rented accommodation on state benefits. I am afraid that the situation will only worsen my mental state - yet my STBX is putting pressure on me to move out as quickly as possible after a settlement is reached. He says I am being too fussy not wanting to take the first available thing that comes along - 'Oh you can just find somewhere better later'. But I do not want the stress of moving around too much.

It just seems that my STBX will get to keep everything and I will just be cast off onto the benefit system, due to being unable to work currently. It looks like it will work very cheap for my STBX - he has found a cheap way to get rid of me and he knows it. He also thinks he has the moral high ground because I was 'irresponsible with money' and ran up the most debts. He had debts himself but has discharged those with another loan - but he is so smug about all this. He'll be 'alright Jack'.

Has anyone been in a similar situation? If so, how did you cope? A life in the benefit trap seems like no life at all - that is not what I want.

Hi,

The first thing you should do is get on the housing council waiting list. There is also alot of homebuyer programs that require little deposit and very small rental payments. It a share system so no debt can be collected form it because technically its not just yours. Heres a ­link­ to some information:
http://www.keyhomes-east.org.uk/index.asp
Of course, you would need to find the one for your jurisdiction.
Good luck with it all

Hi Zanth, from what you have described the proposed settlement of £35K..... should you receive it, would push you well over over the capital limit, for most means tested benefits (pension credit is more generous). Currently savings over £6k affect en­title­ment, increasingly upto £16k, when youre off completely.

However, there is a schedule of the IS/JSA regulations which states (short version!) any sum directly attributable to the proceeds of sale of premises, formerly occupied as the home and used to purchase another property which you intend to live in as the home, can be ignored for upto 26 weeks or longer, if reasonable, to give you time to buy another house.

As your husband is effectively buying you out of the marital home with his re mortgage, if I were the decision maker looking at this situation, I would say its reasonable to ignore the settlement if you were using the capital to buy another house to live in. The CAB should have have cpoies of the capital regulations should you want to check it out with them.

Deprivation of capital is knowingly spending capital in order to secure en­title­ment to benefit. You have to ask yourself the question...if I spend this money, what will I live off then? If the answer is you expect to live of benefits, then there is a strong element of deprivation.

However... its very hard for the DWP to prove these types of cases people who have spent the lot on alcohol and gambling, have got away with it (so to speak) when its been taken to appeal...I would advise anyone who is considered to have deprived themselves of capital to appeal such a decision.

Its really hard to think ahead isnt it when there are so many uncertainties? Im desperately trying to make firm plans for my future.... to try and feel like I know what Im doing . Hope the above helped.
SG

Zanth,

Your story has raised some questions for me ... don't want to hijack your thread but hope you don't mind me asking them here.

1: If you are on benefits but have access to an income - ie an occupational pension that can be taken now - what view would be taken of that? Can you be compelled to take the private income instead of claiming benefits?

2: At what point are you deemed to have received your divorce settlement? If the cash takes some time to come through, can you be compelled to pay back benefits you may have received in the mean time??

3. What is counted as cash?? Is an endowment policy handed over as part of a settlement deemed to be cash - as it has a cash-in value? Can you be compelled to cash it in??

4. If you have a newly acquired council tenancy but receive sufficient in a divorce settlement to purchase something, can your tenancy be revoked?

I don't know if this helps you Zanth - or not - but my stbx has been living on benefits for the past 4 years. I have been concerned that any cash he received in a settlement would simply end up funding his income needs. The judge was very firmly of the opinion that if there was cash available then he should be funding himself privately rather than relying on the state. He was very opposed to any scheme that would have meant regular lump sum payments to keep him below the benefits threshold.I think it is vital that you are given a clear idea of what your stbx can afford to pay you - your needs are important - have you had full financial disclosure??

Have you got a Comunity Mental Health Support worker who may be able to offer you support at this time?? Is there perhaps any semi-supported accommodation available locally for people with mental health problems? Some housing associations have places like this designed to help people to cope on their own with support before having to go it alone in private housing. I would also echo mpham's suggestion that you go on to the LA waiting list ASAP.

Hadenoughnow

Hi
There is DIAL (disab info advice line) they are knowledgable.

Thanks for your reply. I don't know the answers to your questions myself but they do go to show that financial issues in divorce seem far from clear cut. As each issue comes up, it just seems to raise yet more issues and questions. I must say I get more confused as time goes on - hopes are raised and then dashed. It is difficult to know when we are receiving the best financial advice.

I do have a Community Psychiatric Nurse (who has been on leave for last 3 weeks). I have a meeting with him this week when I can discuss my application for the Local Housing List and suitable accommodation etc. My application forms have been sent, together with a medical priority form filled in by the CPN.

Now the Council are asking for further evidence of my medical condition e.g. letter from consultant, another letter from CPN, evidence of repeat pre­script­ions. They also want evidence of my ID, i.e. passpost, birth certificate, plus evidence of disability living allowance (proof of which, I already sent with application form). This is frustating gathering all this evidence but, hopefully, I can sort it out.

I think there is sheltered accommodation available locally but my consultant psychiatrist was reluctant to support me in my application because he does not think I have any special needs. I said I did not want to end up in a bad neighbourhood with lots of anti-social behaviour and crime because this would make my depression worse. But he said 'that was just reality' there was nothing to be done. So, I am hoping the CPN might be more supportive in helping me to find better accommodation.

Zanth.

I have recently sent an application for the Local Housing List with a medical priority form from my Community Psychiatric Nurse. The council require further proof of identity and medical support letters but, hopefully, we can obtain these. I was hoping to look into local part-rent, part-buy homebuyer schemes because the accommodation is mostly newly built or refurbished and looks good quality. Sadly, the info I have found so far all suggests that if a person has debts, then their creditors can make a claim on their property even if they own only part of it. I will need to find out more about these schemes to see whether this is true or not.