Lump Sum contribution

Seaburys

Can anyone suggest an alternative financial mechanism? The only other way I can think of protecting his capital is to set up a discretionary trust, and that would be expensive - requiring legal fees.

All suggestions would be warmly welcomed,

Thanks

EdInvestor

Seaburys wrote: »

We would liberate several thousand of it for his personal needs - just don't want to impact his application for housing benefit.

So you would like the taxpayer to finance his housing costs even though he is able to pay himself?

I believe this is regarded as benefit fraud.

Could be wrong of course.

Seaburys

Edinvestor, the reason I've started this thread is to try and avoid being accused of benefit fraud, for good philanthropic reasons. I am looking for a legal and equitable way for my disabled brother to continue living without having to lose his capital. It was our parents legacy that we used to buy his current flat in the first place - and he has managed to live the last 25 years without having to claim housing benefit because of this.

He has never had enough money to put towards a pension - I'd just like to rectify this by setting one up now with the capital proceeds of this sale. Personally I see nothing wrong morally with this suggestion - we are just continuing to use our parents legacy to support their disabled son.

Oh, and I'm a taxpayer and have worked all my life.

EdInvestor

Why not look into equity release? Being disabled he would no doubt get a good deal, and he can take a lump sum or an income (tax free) or a mixture.This would also reduce his assets (though not his ability to enjoy the home) should he later need full time care.

No doubt he could use the money now - perhaps to pay for some more help if he needs it.If it ran out by the time he retired he would expect to get pension credit (topped up by extra amounts that disabled people get) plus housing benefit - or free care if he was in need of it full time..

Whereas if you put the money in a pension, you won't get tax relief going in as he isn't earning, yet you will pay tax on the proceeds AND it will probably (yet again) mean he won't get benefits.Much the same prooblem with a PLA.

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jamesd

Seaburys wrote: »

We would liberate several thousand of it for his personal needs - just don't want to impact his application for housing benefit.

He'd be making himself deliberately homeless by selling his home. Discuss with the council before doing this because I doubt that they will be keen on the concept of paying housing benefit to someone who has deliberately created the need for it by selling their home.

But a better idea is to discuss with social services. They may be willing to come to some arrangement that involves him using the proceeds to purchase a suitable place to live. They are the agency that has the potential financial liability for his presumably increasing care needs, so they may work with other departments to facilitate some plan. This seems likely to be your best prospect.

Knowing the approximate value of the home would also be helpful since that would affect whether some options are suitable. So would knowing the pension value, so it's possible to get some idea of the likely total income from investing the house sale proceeds.

Aside from the social services approach, you're trying to do what the system is designed to prevent you from doing. The trust would also presumably be seen as deliberate deprivation of assets. The timing here means that you have very few to no options because it's obvious that you're trying to find a way to get assets out of the means tests for benefits.