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Housing benefit refused

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My friend is 64, she had cancer 2 years ago and was still working and paying a mortgage as she took it out to pay off her ex partner about 10 years ago. She couldnt afford the mortgage and was ill. She sold the house to someone and received £35000 once the mortgage was paid off. The house was then rented back to her for £500 a month.
She has lived on her basic pension and this money for 2 years. She now has below £15000 and so applied for housing benefit. She has been refused reasons given are. She should have got a lodger. She should have got a better job. She was not forced to sell her house by the mortgage company, even though she couldnt afford the payments.
What should she do she is getting £149 pension and her rent is £125 a week.

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