“I receive Tax Credits and other benefits and allowances, will a lump sum settlement from my divorce affect what I can claim?”
Whilst the full answer to this question is dependent on a number of factors, the short answer is likely yes.
It’s important to note that a divorce financial settlement can impact both your current entitlement and future entitlement. The law governing benefits has changed in recent years following welfare reforms and this may mean that the benefits you are currently claiming have changed their entitlement criteria. It is always best to seek professional advice if you are unsure about the impact a settlement could have.
If you have instructed a Solicitor to deal with your divorce they will already have your financial best interests at heart. They can work with us as specialists to ensure your interests are protected and you are fully informed to make the best decision for your future.
How will my divorce financial settlement be treated?
Government allowances and benefits are categorised in different ways but generally speaking those that are means tested are affected by the income and savings you have. Most income replacement benefits including Universal Credit, Jobseekers Allowance, Income Support and Employment and Support Allowance would be affected by a settlement.
As all financial settlements are different they will affect individuals differently. Your divorce financial settlement may see you receive assets such as property, cars and other possessions. It may see you receive a lump sum or you may receive a regular maintenance payment.
As with all benefits there are a number of exemptions and disregards that may be applicable. It is always helpful to know your rights so that you can make the most informed decisions and better plan for your future.
Separating from a partner will often see a reduction to your household income. Often certain types of income can be disregarded and being separated may mean that you find out you are entitled to more than you were previously. It’s always best to seek professional advice.
Separations can also raise other issues including your housing situation and where you will live after the separation. You may already own a property or you may rent a property. If you do not receive property in the settlement or do not agree on who will remain in a rental property, you will need to consider your housing options.
If you require housing after a separation it is important you deal with this straight away. You should approach the Council and local housing schemes as soon as possible to find out what support is available to you. They can help guide you through social housing and private rented accommodation.
If you find yourself in a situation where you are homeless or at risk of becoming homeless you should obtain specialist housing law advice.
At Howells we know that going through a separation is difficult. There are many factors to consider and planning and understanding your finances for the future can seem overwhelming. We know that it’s important to seek support with all of this and we are able to offer specialist advice so that you know all the facts when agreeing to a divorce financial settlement.
If you require any assistance with benefits, credits or housing matters please do not hesitate to contact us to see how we can help you.
Written by Marie Busfield, Benefits, Credits and Housing law specialist
If you would like to submit a question to for one of our legal experts to answer, please email ross.holliday@howellsllp.com
If you would like to keep up to date with the news from Howells Solicitors, receive exclusive offers and free legal advice, sign to our mailing list here.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent. Read More
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.