This blog details the benefits you can receive if you own property abroad, but reside in the U.K. It also addresses whether benefits can be accessed if you move temporarily to another property outside the U.K.

It looks at the conditions imposed in claiming benefits if you have property abroad. Finally it addresses some important queries surrounding this issue. 

Can I claim benefits if I own a house abroad? 

Yes, you can still claim benefits if you own a house abroad. 

If you own property in the European Economic Area (EEA) or certain specified European countries, you can continue to claim certain benefits even if you have moved there temporarily, permanently or for medical purposes. 

Different benefits are subject to varied conditions. In the case of owning property abroad, you will still be able to claim benefits, subject to certain limitations and restrictions on the amount. 

This blog will look at the benefits you can claim, along with the different contexts of owning property abroad and their impact on the benefits. 

Owning property abroad while living in the U.K. 

If you are a permanent resident of the U.K., you will still be eligible for all the benefits both means-tested and contributory. 

However, in the case of means-tested benefits, any property you own whether in the U.K. or abroad that does not function as your primary home, is treated as capital/savings. 

The market value of the house/property which is not used as the main residence, is taken into account for the calculation of means-tested benefits which are dependent on income and savings. 

As a consequence, for means-tested benefits like Universal Credit, if the value of the house goes above 16000 pounds, then you may not be eligible for the benefit. 

Or if the rental income/ land value which counts as income surpasses a certain amount it is unlikely that you will be eligible for emas-tested benefits like Universal Credit that are meant for people on a low income and/or with low savings. 

There are exceptions to this rule which will be detailed below. 

Concessions to the ‘property as income/savings’ rule while claiming benefits 

Some deductions can be eliminated or reduced , depending upon your circumstances. The value taken as income/saving may undergo changes depending on various factors. These are detailed below. 

  • Debt on property i.e. Mortgage 

If you have taken a mortgage out on the property that you own abroad then the amount of the mortgage will be deducted from the overall value of the property/land that you own. This reduced value will then be used to calculate the means-tested benefits. 

  • Property meant for Sale 

If the property you own abroad is being readied for sale, then the costs of the property will be deducted from the overall calculation. In addition, the total value of the house will be excluded from the calculation of savings and benefits temporarily. 

It will be disregarded as savings for a period of 6 months i.e. 26 weeks from the date on which the sale was initiated or an extended period, if the circumstances so warrant. 

  • Property being refurbished/repaired 

If your house is undergoing repairs or refurbishment for the purpose of either making it your primary place of residence or for the purpose of selling it, then the value of the house will be disregarded in benefit calculation for a temporary period of 6 months i.e. 26 weeks. 

  • Joint legal ownership of property 

If you own property or a house abroad that is not your main residence and you share ownership with a spouse, partner, child/children, relatives or parents, then whatever portion of the house value accrues to you will be added to your savings balance and used for the benefit calculation. 

Exceptions to the rule of property abroad as savings for claiming benefits 

In some cases the entire value of the property will be waived off in the calculation of benefit entitlement. It will not be considered as a part of savings for an extended period of time , perhaps even permanently, in the cases explained below.

  • Property/House abroad used as a home by a disabled/ill relative

If the house you used to reside in abroad is now being used by a relative who has a disability or chronic illness that indisposes them. In this case, the entire property value will be taken out of consideration for a long time or even perpetually. 

The only condition is that the occupant must be a relative. Even if they don’t have a disability or chronic illness, if they are of or above State Pension age, and they use the property as their residence, the same exemption applies. 

  • Property/House abroad used by an ex-spouse or partner 

If the house you own abroad and used to live in is now utilized and occupied by your former spouse (husband/wife) or partner ( by way of a civil partnership), then you can also get a complete exemption on incorporating the property value into your savings amount. 

But for this to happen, the occupant must be a former partner and must also have primary custody/care of your children. 

In other words, if they are a single parent caring for your children then their occupancy of the house you own is exempted from the calculation of the means-tested benefits. But both conditions need to be met.  

Benefits that can be claimed on temporary move to a house abroad

When you are moving temporarily for some purpose you can still claim benefits for a specified period of time. 

You could be moving to a residence abroad for the purpose of medical care etc. If you are moving temporarily to countries in the EEA or Switzerland,  and you reside in a house abroad, you can still claim the following benefits subject to certain conditions. 

  • Disability Benefits 

You can continue to claim disability benefits such as Disability Living Allowance (DLA), Personal Independence Payment (PIP) and Attendance Allowance for a period of 3 months if you have moved temporarily. 

This time period may be extended to 6 months, if you have moved for the purpose of medical treatment. You can claim it for yourself, or for the person that you are the primary care-giver for. 

You need to ensure that the Department of Work and Pension (DWP) is informed about this change of circumstances so that they can make appropriate adjustments to the benefit calculation. 

  • Pension and related benefits 

If you are of or above State Pension age, you can claim State Pension even if you have property abroad and are living in a home outside the U.K whether temporarily or permanently. 

But to receive annual increments from the U.K. government on your pension you need to have relocated or be living temporarily in either EEA countries Switzerland or other European countries that have welfare accords/agreements with the United Kingdom. 

With Pension Credit, which is a income top-up, you can continue to receive it temporarily for a period of 1 month to 2 months in case the temporary absence is caused by the death of a family member e.g. spouse, child etc. 

It may , in special circumstances, be extended to 6 months, if the residence in property abroad is for medical treatment purposes. 

  • Universal Credit 

You can only claim Universal Credit if you are moving to another residence temporarily. You will be allowed the receipt of Universal Credit for one month initially. 

You have to make it clear to the DWP about the amount of time you will be away and any change in these plans. The exemption can be extended up to 3 months, if the temporary residence outside the U.K. is due to the death of a spouse or child. 

It can also be extended to 6 months, in special circumstances where you have moved for medical treatment or have accompanied a child or dependent for medical care. 

As previously pointed out above, since UC is means-tested, the value of the property will be taken into consideration when calculating the benefits. 

The other benefits mentioned are not means-tested and so temporary residence outside the U.K. or the ownership of property outside the U.K. does not affect them. (The exception to this is if you leave or reside outside permanently; this scenario will be addressed later in this blog. 

  • Extra Benefits 

These include the Winter Fuel Payment and the Bereavement Support Payment. 

In the case of the former, it can be claimed if you move to countries within the EEA or Switzerland or countries that are colder that -n peak winter temperatures in the United Kingdom. 

For example, countries that wouldn’t be included could be Portugal, France, Spain etc. 

For the latter i.e. Bereavement Support claims can be made if the death of a family member has forced relocation to an EEA country or Switzerland or countries with welfare/social security agreements with the U.K. 

This blog has detailed the benefits you can receive if you own property abroad, but reside in the U.K. It has also addressed whether benefits can be accessed if you move temporarily to another property outside the U.K. 

It detailed the conditions imposed in claiming benefits if you have property abroad. Finally it addresses some important queries surrounding this issue. 

If you have any queries, comments or suggestions, please feel free to contact us and leave a message. We welcome your input. 

Frequently Asked Questions (FAQs)- can I claim benefits if I own a house abroad? 

Can I claim benefits if I move permanently to a house abroad? What if I return after a long period? 

Most of the benefits like Universal Credit, new -style JSA and ESA, Income support etc. will be ceased if you move permanently to a house abroad. 

The only exceptions are State Pension which you receive by virtue of having worked in the U.K. for so long and some other benefits like disability or living benefits like Winter Fuel Payment, if the country you are residing in has a welfare support agreement with the United Kingdom. 

For more information , you can refer to – Benefits abroad | Independent Age

Can I claim benefits if I return to the U.K. after a long period, but still own a house abroad? 

If you return to the United Kingdom after a hiatus, which was considered as a permanent departure,  then you will have to pass the Habitual Residence Test before you can claim any benefits. 

If you pass the HRT, then it doesn’t matter whether you won a house abroad or have any income sources from another country such as a pension. The usual limitations of means-tested benefits will apply based on the valuation of your house. 

But other than this, if you can prove that the United Kingdom is the ‘center of your life’ then you can claim benefits. This phrase means a lot of things like living in the U.K. for the majority of the time, or having a significant stake in terms of work or family in the country. 

For example, you children may be undergoing their education in the U.K. etc. For more details you may read- Returning to the UK: can you claim benefits? – UK Property Guides. Means-tested benefits won’t kick in even with an HRT certification until you have lived in the U.K. for a minimum of three months. 

If I claim benefits but don’t register my property abroad, is it benefit fraud? 

Yes! If the Department of Work and Pension (DWP) comes to know of your ownership of property or  a house abroad which you have not declared while claiming benefits, then this is a punishable offense. 

Not only will your benefits be reduced or stopped completely, you will also have to pay a penalty for the extra benefits that you collected which you would not have been entitled to had you declared your property. 

You will have to pay back what you received illegally and perhaps also pay a penalty for the fraud you committed. This is especially the case for means-tested benefits which will decline in amount if property/houses abroad and their valuation is taken into consideration. 

Can I claim Housing Benefit on my residence in the U.K. if I move to a house abroad? 

If you are moving to a house board for a temporary period, such as for medical treatment , then you can receive Housing Benefits for that period. 

It is usually granted for a month, but can extend up to 6 months in the case of residence abroad for medical purposes. During this period, you cannot rent out your house or sublet your house to another tenant. 

This will make you ineligible for Housing Benefits. Finally, if you move permanently to a house board, you will not receive Housing Benefits of any sort. 

Can I claim Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA), if I own a house abroad? 

The JSA and ESA scheme used to consist of income-based and contributory components. The income-based JSA and ESA are now part of Universal Credit. 

You may be eligible to receive them if you are habitually resident in the U.K. and fulfill other conditions like low income or savings. 

But they are means-tested components, which means that the greater the valuation of the house you own abroad, the less benefits you will receive. If the valuation of the house exceeds 16000 pounds in capital/savings then you may become ineligible for the income-based benefits. 

In the case of the new-style or contributory ESA and JSA, you will remain eligible as long as you fulfill the eligibility criteria of unemployment, disabilities and residence in the U.K amongst others. 

The new style ESA and JSA are not means-tested , so your ownership of a house abroad does not affect the receipt of the benefits, because your income or savings are not taken into consideration in the calculation. 

However, if you permanently move to the house abroad and leave the U.K. your benefits could be revoked, unless there are special welfare scheme agreements between the country you are based in and the U.K. which allows you to retain these non-means-tested benefits. 

To understand more about new-style JSA and ESA eligibility , you can refer to – Jobseeker’s Allowance (JSA): Eligibility – GOV.UK (www.gov.uk)

References : 

  1. Benefits Calculator – entitledto – independent | accurate | reliable | www.entitledto.co.uk. (n.d.). Www.entitledto.co.uk. Retrieved November 14, 2021, from https://www.entitledto.co.uk/help/Own-other-property
  2. Age, I. (n.d.). Benefits abroad | Independent Age. Www.independentage.org. Retrieved November 15, 2021, from https://www.independentage.org/get-advice/money/benefits/benefits-abroad
  3. Returning to the UK: can you claim benefits? (2019, October 9). UK Property Guides. https://www.propertyguides.com/uk/news/returning-to-uk-claiming-benefits/
  4. Jobseeker’s Allowance (JSA). (n.d.). GOV.UK. https://www.gov.uk/jobseekers-allowance/eligibility
  5. New Style Employment and Support Allowance. (n.d.). GOV.UK. https://www.gov.uk/guidance/new-style-employment-and-support-allowance
  6. Claiming benefits if you live, move or travel abroad. (n.d.). GOV.UK. Retrieved November 15, 2021, from https://www.gov.uk/claim-benefits-abroad
  7. Discussion: Means-tested benefits and owning property abroad – Rightsnet. (n.d.). Www.rightsnet.org.uk. Retrieved November 15, 2021, from https://www.rightsnet.org.uk/forums/viewthread/5777
  8. owning a EU property and esa. (n.d.). MoneySavingExpert Forum. Retrieved November 15, 2021, from https://forums.moneysavingexpert.com/discussion/5513456/owning-a-eu-property-and-esa
  9. Howard, L., & Mal, N. (2021, July 22). Your PIP payments may be stopped if you go on a holiday abroad. WalesOnline. https://www.walesonline.co.uk/news/uk-news/dwp-stop-pip-payments-you-21118395
  10. Shelter Legal England – People who are excluded from claiming housing benefit. (n.d.). Shelter England. Retrieved November 15, 2021, from https://england.shelter.org.uk/professional_resources/legal/benefits/housing_benefit/people_who_are_excluded_

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.