Jobseekers Allowance and Inherited House - Options?

LexieB

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My partner who is on JSA has recently inherited a house, in which we have been living for the last few years. We desperately want to move for a number of reasons, including being close to my parents, one of whom has a long term illness.
We could just about manage it if we sold this house to buy in that area. Another option may be to buy a site and build. If he sold this house to buy another, how would his JSA be affected? Is there any sort of grace period between selling and buying before the money is counted as means?

An alternative is to rent out this house, and rent somewhere in the area we want to move to. However, with rents the way they are, most - if not all - of the rent this house would generate would be spent on renting somewhere else. Would the property be assessed as means if this was done? I know that is the case if someone owns a second property, but would it be the same in this case?

If so, would it be possible for my partner to become a sole trader to let out the property, and do so under the Back to Work Enterprise Allowance?

A further part of our hopes to move is that the area where my family is has better employment opportunities, and my partner hopes to get off JSA when we move. At the moment though, we have nothing but the house we are in, so don't want to lose that safety net while we transition.
 
Congratulations, your relative has just dropped a bounty into your lap, how much is it worth after tax ?

JSA is paid by the State to those in need, it is means tested, you will have cash after you sell the house if you choose to sell of course, do you still want the taxpayer to have the burden of your JSA in these circumstances ...really ?
 
If I were you I would drop into your local Citizens Information Office, they should be able to answer your questions without judgement.

I would think the Back to Work or sole trader set up is not a runner in any shape or form, best option in my opinion would be sell and buy immediately but do call in to CI to get the correct advice and possibly an appointment with a solicitor through their free legal advice clinic so that you have the full legal and tax situation too.
 
An alternative is to rent out this house, and rent somewhere in the area we want to move to. However, with rents the way they are, most - if not all - of the rent this house would generate would be spent on renting somewhere else.

The rental income would be taxable, and would probably make him ineligible for JSA. You cannot offset the rent you pay for somewhere else against the rent you receive.


If so, would it be possible for my partner to become a sole trader to let out the property, and do so under the Back to Work Enterprise Allowance?

Letting property is considered unearned income, and not a trade. I very much doubt it would qualify under the BTW scheme

It seems that selling and buying would be your best option. As suggested above, get advice on how to do this without affecting the JSA
 
If you sell the property the proceeds of sale can be considered capital and subject to means testing until you use them to buy a new property. However the deciding officer does have discretion not to assess this capital if you are in the process of buying a new home.

The operational guidelines state

"Where a person has sold his/her residence and is holding the money pending completion of the purchase of another, a Deciding Officer may decide not to assess the capital for a temporary period and review in 3-6 months to confirm that the purchase was completed".

If the proceeds are subject to a means test the deemed income formula is used. If for example you get €100,000 in proceeds then you would be deemed to earn €260 per week from this.
 
An alternative is to rent out this house, and rent somewhere in the area we want to move to. However, with rents the way they are, most - if not all - of the rent this house would generate would be spent on renting somewhere else. Would the property be assessed as means if this was done? I know that is the case if someone owns a second property, but would it be the same in this case?.

Yes, it would be assessed as income.

If so, would it be possible for my partner to become a sole trader to let out the property, and do so under the Back to Work Enterprise Allowance?

No, renting houses is not considered a trade or business for the purpose of BTWEA.

A further part of our hopes to move is that the area where my family is has better employment opportunities, and my partner hopes to get off JSA when we move. At the moment though, we have nothing but the house we are in, so don't want to lose that safety net while we transition.

It sounds like your best option all round is to sell and move. The only period you won't (potentially) get JSA is when you're between homes, but then you don't need it as you've a large cash pile to draw on for what's hopefully a very short period. Once you're in your new home the JSA does not take into account your new home, as it's where you're living. As you say, you're in a better place (literally) all round: better job prospects and living where you want. There is a risk OK that the purchase of somewhere new falls through and you've already sold and there's nowhere else you can find for the right amount, but that's down to timing and judgement on whether there are plenty of options to buy out at the right price out there.
 
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