Incapacity Benefit - Getting element of Income Support

TOBRUK

calleyw wrote: »

I am sure that a reply has touched on this already.

If the deposit is paid direct to the mortgage company then the OP has never touched it.

If they don't touch it then it can't be claimed as deprivation of capital.

Rather like the grandparents paying a private school direct for the fees. It has never passed to the parents so no problems for tax or IHT issues.

Yours

Calley

To be honest I don't think this is quite right, they will find out who and how this money has been paid. You have to be up front with the DWP or you will find yourself in very hot water!

millym

Only had a quick search, but so far can't find any guidance on deprivation of capital and deposits.

I think we'll give it a miss anyway, as SMI support is reducing, and there is the risk that it might be withdrawn in the future. I want security of tenure, not neccessarily home ownership.

Still hoping for explanation from OP...

millym

Actually, have found the relevant legislation - deposit money can be disregarded for 52 weeks as being used towards purchasing premises that will be used as home -

Capital assets disregarded for 52 weeks
P1.201 In certain circumstances capital assets are disregarded for 52 weeks from the date of receipt
i amounts paid under an insurance policy in connection with loss or damage to the claimant’s
home and personal possessions
HB(SPC) Sch 6 Para 18; CTB(SPC) Sch 4 Para 19
ii amounts paid to the claimant and deposited in their name solely for
HB(SPC) Sch 6 Para 18; CTB(SPC) Sch 4 Para 20
- purchasing premises which they intend to occupy as their home
- effecting essential repairs or alterations to the premises which they

tcr_3

TOBRUK wrote: »

To be honest I don't think this is quite right, they will find out who and how this money has been paid. You have to be up front with the DWP or you will find yourself in very hot water!

Well, I've seen exactly the same scenario being allowed by an Income Support DM. The dosh got paid to the person's solicitor by a family member on the day of house purchase ... and on the clear, written understanding that it was only to be used to fund the house purchase. Later that day the house was bought, the deposit got tied up in the property, meaning it simply wasn't available to the claimant to deprive themselves of.

The test for IS is whether the claimant deprives themselves of capital to get themselves benefit, or a higher rate of benefit, than they would normally be entitled to. All the OP has to say is ... nope, the dosh was used to buy the house and here's my proof. And on the balance of probabilities I reckon it'll go in her favour because the DWP can't prove otherwise.

Having said that, every DM considers each case on its own merits, so nothing's cut & dried. The OP hasn't mentioned what their own plan is for the deposit yet.

If I were her I'd leave the whole thing until I got back to work, there's too many possible pitfalls. But we can only advise as best we can & point out where things could go wrong, what the OP decides is out of our control.

GlasweJen

If the money in the above situation was from a house sale that happened less than 52 weeks prior to the house being bought then it is technically allowable. But the OP does not currently qualify for income support and hopes that by buying a house she will even though she has access to money from some means (not from parents will as they are funding her medical expenses atm) so DWP are going to ask questions before allowing an income support application to go through in this case, OP clearly has access to money in some form.

millym

GlasweJen wrote: »

If the money in the above situation was from a house sale that happened less than 52 weeks prior to the house being bought then it is technically allowable. But the OP does not currently qualify for income support and hopes that by buying a house she will even though she has access to money from some means (not from parents will as they are funding her medical expenses atm) so DWP are going to ask questions before allowing an income support application to go through in this case, OP clearly has access to money in some form.

The OP hasn't told us enough about their situation to really assess it properly, but I can't find anywhere in the legislation that states the deposit must come from a house sale. Info from -
http://www.dwp.gov.uk/docs/hbgm-bp1-assessment-of-capital.pdf

Also, I currently don't qualify for IS as our benefits and housing costs leave us with a very slight excess(less than £10 per week). To qualify, we could move to more expensive accommodation, although I question the morality of such an action.

In our situation, what is more likely is that the proposed cut to LHA coming in April will increase our housing costs and take us into eligibility for IS through no fault of our own.

The OP may find themselves in this situation in April also. Ironically, the changes mean that we will get free prescriptions, glasses, dentists costs etc - costs which are considerable for us due to our complex health problems. The irony is that the government will cut LHA to save money, but (in our case anyway) it will cost them more to pay for our health costs. Crazy...

In the OP's case, the fact that their parents also pay for private health care will no doubt raise extra questions from the DM. I do wonder at the morality of asking the state to pay mortgage interest for someone who has private health care and a substantial deposit (potentially) paid for them.