benefits and selling a house to buy another because of disibility

cuddlein

Hi folks,

My mum is 65 and has her own flat but due to her disibilties and old age she finds it extrememly difficult to get in and out of the house due to 2 flights of stairs.

She gets pension credit, retirement pension and maximum dla

The idea we have is that she wants to sell the flat and buy a flat/house that is on the ground floor.

The question is what happens when she sells the house ? does she get a specific amount of time to buy another house ? like before the DWP count the cash from the sale of her flat as income and reduce her benefits ?

please can you help

thx

Sues48

I'm not a 100% certain but I think that the capital from the sale of your home can be disregarded for 6 months if that money is to be used to purchase another property.

zzzLazyDaisy

Will she be a cash purchaser for the new place, or will she need a mortgage? If she needs a mortgage you need to check that out first.

If possible it is best for her to sell her flat and buy her next place at the same time, in the normal way, because then she never has the cash in the bank.

As far as I know for LHA and CTB there is a 26 week period when the money is disregarded. This would only be relevant if she rents between selling one place and buying the next (I say afaik because that certainly used to be the case, but things are changing all the time so it would be best to check that closer to the time).

Retirement pension and DLA are not means tested, and are not affected by money in the bank

The rules around pension credit seem to be complicated but you can phone the pension service for information 0800 99 1234

Have you considered applying to your local housing association for a retirement bungalow or flat. The money from the house wouldn't be taken into account for housing benefit for the first 6 months so she would have time to see if she liked it. Even after that, although she would have to pay rent until her savings fell below the threshold, she would have money in the bank, and no worries about what might happen if the roof needs repairing, or the boiler breaks down.

cuddlein

she would probably have to get a small mortgage as flats are normally cheaper than houses where she stays

thats the idea sell this flat and buy another flat/house straight away (but then that'sa case of the best laid plans

the renting a house/flat off the local housing association never occurred to us because she no longer gets HB and we thought she would have to pay rent
and i dont think she would like to lose a lot of the capital from the sale of her house, will put this to her though

we are talking between 40k to 50k expected for the sale of her flat!

obviously the best option is selling her flat and buying another accomodation straight away but if that doesn't happen e.g she doesn't find a house in 26 weeks,

could you tell me what the threshold is for pension credit/LHA/HB/CB ?

zzzLazyDaisy

cuddlein wrote: »

could you tell me what the threshold is for pension credit/LHA/HB/CB ?

No-one on here can do that because it depends where you live and your circumstances.

However, you can check the LHA rates for your area by googling your local authority LHA (she would only be entitled to the one bedroom rate)

Then putting all the info into the turn2us questionnaire.

As far as losing her capital is concerned - yes she would have to pay rent if she decided to rent rather than buy, but she would have access to her capital, and once it dropped below the threshold she would be entitled to help with rent and council tax. While it is tied up in the house she doesn't have access to the capital, and it is therefore *lost* to her anyway (although it is of course safe for those who will inherit when she dies). She will also have to get a mortgage which might be a stumbling block, as she is on a very low income and a you know mortgages have become more difficult to obtain. It might be worth seeing an independent mortgage broker to explore her options.

You might also find it worthwhile giving Age Concern a ring as they can often help with benefits advice.

Oldernotwiser

cuddlein wrote: »

she would probably have to get a small mortgage as flats are normally cheaper than houses where she stays

thats the idea sell this flat and buy another flat/house straight away (but then that'sa case of the best laid plans

the renting a house/flat off the local housing association never occurred to us because she no longer gets HB and we thought she would have to pay rent
and i dont think she would like to lose a lot of the capital from the sale of her house, will put this to her though

we are talking between 40k to 50k expected for the sale of her flat!

obviously the best option is selling her flat and buying another accomodation straight away but if that doesn't happen e.g she doesn't find a house in 26 weeks,

could you tell me what the threshold is for pension credit/LHA/HB/CB ?

Surely, if she's moving from one flat to another, she just needs to make sure that the one she buys costs less or the same as the one she's selling?

I can't see why there would be a gap between the two either. Just like anybody else, she'll presumable move directly from the one she sells to the one she's buying.

You seem to be complicating the situation unnecessarily.

Whiteknight

If she sells one property and intends to buy another then Pension Credit will disregard the capital from the sale of the current home for a period of time. If she has not purchased a new property within this time then they will count the capital she has and it will reduce the amount of Pension Credit she is getting.

They would normally ask to see completion statements so that they know that the money has actually gone.

bigbill

As she is over 65 I suspect she will have an assessed income period could be years, her Pension Credit award letter will tell you.

During this period selling the house and having the capital will make no difference.

Get her to rent ideally from the council as HB & CTB will be due in full until this AIP period is up or if renting privatly then LHA will dictate how much will be paid.

cuddlein

Oldernotwiser wrote: »

Surely, if she's moving from one flat to another, she just needs to make sure that the one she buys costs less or the same as the one she's selling?

I can't see why there would be a gap between the two either. Just like anybody else, she'll presumable move directly from the one she sells to the one she's buying.

You seem to be complicating the situation unnecessarily.

The flat, stairs/access to building are in a terrible state, that along with the house being in a deprived and non desireable area means this flat will be sold at a low price!
Trying to buy somewhere decent is probably/more than likely, going to cost more money, so my mum me and my brother might well have to add to her capital to buy a house, as she may have a problem getting a mortgage at her age.

Oldernotwiser

cuddlein wrote: »

The flat, stairs/access to building are in a terrible state, that along with the house being in a deprived and non desireable area means this flat will be sold at a low price!
Trying to buy somewhere decent is probably/more than likely, going to cost more money, so my mum me and my brother might well have to add to her capital to buy a house, as she may have a problem getting a mortgage at her age.

Thanks for the explanation. However, I still think that there's no reason for her to be between one home and another, even if the family give her some money or she takes out a loan. It's really just the same as any other person moving home.

TOBRUK

zzzLazyDaisy wrote: »

...
She will also have to get a mortgage which might be a stumbling block, as she is on a very low income and a you know mortgages have become more difficult to obtain. It might be worth seeing an independent mortgage broker to explore her options.

You might also find it worthwhile giving Age Concern a ring as they can often help with benefits advice.

I would presume that she already has a mortgage as she is going to be selling her current flat.

First she would need to, with her current mortgage make sure that it is a 'portable' mortgage. Take advice from a mortgage advisor/broker which is free for advice - this is what I did. They will look at the best lender that will accept her taking all her situation into account.

How much equity has she with her current flat and how much has she on her present mortgage? If she has plenty of equity, even though she doesn't have much income she may still get a good deal with a lender.

I am in a similar situation (I am single and live alone) where I am in receipt of high rate DLA, unable to work and need to sell my house to move near my family, find a bungalow (as I presently have a house which I have problems with stairs) and for care needs.

I didn't have a 'portable' mortgage and my lender at the time didn't do 'portable mortgages' and so I needed to change it and change lenders. I had no problems in finding another lender and changing it.