shared ownership and housing benefit

Does anyone know if you can sell the family home and put the money into ''part-rent part-buy'' - IF the amount of money is over 16K from the sale, and you want to apply for housing benefit to help with the rental part ?

Details:
My friend, who is on incapacity benefit and cannot work, is getting divorced. She cannot afford to keep the marital home by taking over the mortgage and paying off her husband. He does not earn enough to pay much, if any, spousal maintenance.

She has a daughter who is in full time education and lives with her.

She is likely to come out of the house sale with not enough to buy anything suitable (with 2 bedrooms) in the area. So she is wondering about shared ownership (part rent part buy).

Shared ownership does allow the shared owner access to housing benefit but she has been advised by the council that this would not apply to her - because she would have more than 16K in assets when she sells.

Citizens'' Advice were not sure so she doesn''t know what to do.
Help!

Having capital in excess of £6000 will normally affect one''s entitlement to means tested benefits.

Capital is defined so as to exclude the value of the house occupied by the claimant as a residence.

Of course anyone owning a house would not normally pay rent on it. But shared ownership is a bit of a hybrid and on the basis of the general rules, I would have thought that capital which is '' invested '' in a part buy part rent should not count.

The fact that part of the property is owned by the claimant reduces the rent and therefore the cost to the Exchequer. I''d be inclined to think in terms of challenging this ruling.

Housing benefit changes all the time, but I''d be inclined to show this reply to the CAB and ask advice from their specialist unit - if CAB''s still have them. Failing that, Shelter.

LMM