Client lives alone in large 4 bedroom house following divorce. Financial settlement on divorce has been made so he is sole owner and mortgage is in his name only therefore. He wants to move to a new area to be nearer support. When he sells the house he will be left with approx £300,000 equity. He could probably buy a house in the new area which was adequate for his purposes for say £200,000. If he blows the full £300,000 on a better/bigger house than he needs, will the DWP treat this as deprivation of £100,000 capital?

Just a very quick reply for now as I'm off to see a client. It all depends whart his intention is. Would it be a significant operative purpose of the deprivation to become entitled to a means tested benefit or an increase of that benefit?

Any sum directly attributable to the proceeds of sale ... which is used for the purchase of other premises etc. para 3 scedule 10 (Capital to be Disregarded)IS General Regs. The whole of the proceeds of sale should be disregarded if the whole of the proceeds of sale are used to purchase another home.

If it is disregarded as capital and then the proceeds from the sale are used to buy another home I can't see what it has to do with deprivation of capital. If they were to purchase for £200,000 and spend £100,000 on furnishings, fittings, repairs, adaptions etc. then significant operative purpose should come into play. I would think that the size of the home was irrelevant unless it was an issue of eligible housing costs.

I feel uncertainty as it looks so simple. Confirmation or correction would be welcome.

Shaun

Previous info was from the social worker - turns out the client is on PC not IS and I can't see an equivalent disregard on proceeds of sale in Sch 5 of the PC regs. Am I missing something in my haste to get work off my desk by the weekend?

That puts an entirely different complexion on it - The value of a property not being used as the main residence is ignored for up to 6 months if the intention is to sell it and to purchase another, and steps have been taken to place it on the market - ie, registered with an estate agent etc.

additionally - what rate of PC is he on - if guarenteed PC, did the original award letter state whether it was subject to an AIP - if so, I believe that changes of circumstances that occur after the award are ignored until the AIP end date - winning the lottery and the proceeds of selling a property come under that heading ....?

I also cannot see any equivalent paragraph for disregarding proceeds from sale in PC regs or HB/CTB 60+ regs. Therefore does this mean that the capital would be taken into account, with Mike's exception of an AIP, for PC cases.

Although I find the wording strange in applying it to this case, does para 19 of Sched 5 PC regs have a similar role to play in disregarding proceeds from sale. If this is the case then it is disregarded for a year. There is also an equivalent for HB/CTB 60+.

Shaun

The commentary on paragraph 19 in the Sweet and Maxwell vol 2 suggests that it is intended as parallel to para 3 in Sched 10 of the IS regs - the one that deals with proceeds of sale. Can't see why not meself.