Pension/Benefit/Income help, caring for Grandmother

superpup

Hi

I’ve just been to CAB who couldn’t help, hence why I’m asking on here.
My Grandmother has finally agreed to move in with me and let me look after her. She owns her home outright.

She has a widow’s pension that’s just under £130 a month. I can’t tell you exactly what she is getting but I’m pretty sure she gets pension credit and either attendance allowance or some higher disability rate at she gets close to £250 per week.

We’re planning on renting her house out which should get around £550 - £600 pm before letting fees and tax (btw, does anyone know what is an average % is reasonable? 1st quote has come in at 12.5%).

What I want to know is roughly what money would we have coming in to support myself and my Grandmother and if I can afford not to work so I can look after her properly, or if I need to get a part time job. I have a mortgage which is currently quite low as I’m on a +0.79 tracker.

One thing I’ve thought about is if my Grandmother signs her house over to me and my Father (it’s evenly split in the will), then the rental income would be mine (and my Father’s) and if I didn’t work, I wouldn’t pay much tax over the year. I don’t know how much this would affect my Grandmother’s income when she is living with me.

I don’t want to be bringing in a fortune, I just want to be able to live reasonably comfortably and be able to look after my Nan properly and be able to afford to take her to the hairdressers now and again, or to a show or out for lunch as a treat, etc.

Thank you in advance.

McKneff

She cant just sign over her house to you and your father, its not as simple as that. You need to google 'Deprivation of Assets'
Presumably as she gets attendance allowance she is not in good health so may, in the future need to go into Care which she will have to fund herself.

superpup

McKneff wrote: »

She cant just sign over her house to you and your father, its not as simple as that. You need to google 'Deprivation of Assets'
Presumably as she gets attendance allowance she is not in good health so may, in the future need to go into Care which she will have to fund herself.

No, she isn't in particularly good health but I have no intention of putting her into care. I am fit and well and as long as it is possible, I will keep her at home. She would hate to go into care.

The signing the house over suggestion wasn't to avoid paying care home fees, it's just so we have an income and can afford for me to look after her.

Thanks for your reply

Mojisola

superpup wrote: »

No, she isn't in particularly good health but I have no intention of putting her into care. I am fit and well and as long as it is possible, I will keep her at home. She would hate to go into care.

The signing the house over suggestion wasn't to avoid paying care home fees, it's just so we have an income and can afford for me to look after her.

This is an honorable intention but keep your options open. You don't know what might happen in the future and being a 24/7 carer for a very sick person could prove too much to cope with.

Signing the house over could cause problems in the future if she does need care. It could also mean that you may be liable for CGT when the house is eventually sold.

Why don't you go down the more straightforward way of your Grandmother paying you for the care you're giving her? That money plus her payment for her share of the bills should give you enough to live off.

If she hasn't done it already, it would be worth discussing power of attorney with her.

superpup

Mojisola wrote: »

This is an honorable intention but keep your options open. You don't know what might happen in the future and being a 24/7 carer for a very sick person could prove too much to cope with.

Signing the house over could cause problems in the future if she does need care. It could also mean that you may be liable for CGT when the house is eventually sold.

Why don't you go down the more straightforward way of your Grandmother paying you for the care you're giving her? That money plus her payment for her share of the bills should give you enough to live off.

If she hasn't done it already, it would be worth discussing power of attorney with her.

Thanks

I do appreciate what you are saying but I really do think the only reason I wouldn't be looking after her is if I got ill myself. If I had to pay for nurses to come in and help me, I would.

If the most straightforward way gives us enough money to live off, then I definitely want to do it that way. I only thought of the signing over house option as I don't actually know how much she will receive in pension/benefits once she's moved in with me and how much they will be affected by the rental income.

I already have power of attorney on her bank account as I had to do this when my Grandfather was ill but I do need to discuss it with her but I'll save that for when she's all moved in and settled.

thanks again

McKneff

As good as your intentions are, there could be a time when she really is too ill for you to look after.

Dementia is a terrible thing to cope with and none of us can see into the future.

At 49 my brother was hale and hearty, at 50 he was diagnosed with dementia, it got to the stage quickly where my SIL couldnt cope with him. (long and very upsetting story) he ended up having to go into care and was dead by 52 and looked 90.

Like I say, its not that simpel and it could come back to bite her, you and your father big time.

(and no one suggested that you were doing it to avoid care home fees)

Mojisola

If she gets AA or DLA that won't be affected by selling her house and moving in with you. Her pension credit may be affected.

Deprivation of capital can be claimed by the authorities if it can be shown that capital was disposed of in order to avoid care home fees. You could go ahead with the house transfer and use the argument that there was no intention of getting rid of the house for that purpose because you had every intention of caring for her until her death. If that argument was not accepted, you would still have the option of selling the house then and paying for your Grandmother's care with the proceeds.

There are other potential problems with you and your Father owning a rental property. If either of you needed to claim means-tested benefits you would be unlikely to get them. You would need to protect the house in case either of you died before your Grandmother. If either of you are married and, in the future, divorced, the house would be part of the divorce settlement.

Alter_ego

Why sign the house over for you to rent it out? She could rent it out herself. Problem solved!

superpup

McKneff wrote: »

As good as your intentions are, there could be a time when she really is too ill for you to look after.

Dementia is a terrible thing to cope with and none of us can see into the future.

At 49 my brother was hale and hearty, at 50 he was diagnosed with dementia, it got to the stage quickly where my SIL couldnt cope with him. (long and very upsetting story) he ended up having to go into care and was dead by 52 and looked 90.

Like I say, its not that simpel and it could come back to bite her, you and your father big time.

(and no one suggested that you were doing it to avoid care home fees)

Thanks, I know what you're all saying but I am relatively young, extremely strong and healthy and am used to family/friends with all levels of dementia (including violence) and am sure I can cope.

Sorry, I'm sure you didn't mean it that way re avoiding care home fees but that was how I read your post. Doesn't matter anyway

Mojisola wrote: »

If she gets AA or DLA that won't be affected by selling her house and moving in with you. Her pension credit may be affected.

Thanks, this is exactly the kind of info I'm after.

Deprivation of capital can be claimed by the authorities if it can be shown that capital was disposed of in order to avoid care home fees. You could go ahead with the house transfer and use the argument that there was no intention of getting rid of the house for that purpose because you had every intention of caring for her until her death. If that argument was not accepted, you would still have the option of selling the house then and paying for your Grandmother's care with the proceeds.

There are other potential problems with you and your Father owning a rental property. If either of you needed to claim means-tested benefits you would be unlikely to get them. You would need to protect the house in case either of you died before your Grandmother. If either of you are married and, in the future, divorced, the house would be part of the divorce settlement.

If I did go down the signing over the house route, I would expect to pay for care home fees if she did have to go into care so that isn't an issue. The house thing was really an afterthought as CAB weren't helpful.

I don't claim any benefits and neither does my father (who lives in Australia). Once I don't have my Nan any more, I will go out and get a job again. Half of the proceeds of the house will be mine then anyway so I don't suppose it matters as regards to claiming benefits as I wouldn't be eligible either way.

Alter_ego wrote: »

Why sign the house over for you to rent it out? She could rent it out herself. Problem solved!

That's what I want to do but I don't know how that will affect the rest of the money coming in.

If we can afford to live with what my Nan will have coming in after letting agents fees and tax, that's all I want. I'm about to start a job on reduced hours but would prefer not to do it if we can afford it.

seven-day-weekend

If you rent your gran's house out, the rent (minus allowable expenses) will be classed as her income. If her total income from all sources is over her personal tax allowances, then she will have to pay tax on it.

It will not affect her Attendance Allowance, nor her State Pension, but may affect Pension Credit.

I suggest seeing a Benefits Advisor or Welfare Rights Officer (probably at the CAB).

superpup

seven-day-weekend wrote: »

If you rent your gran's house out, the rent (minus allowable expenses) will be classed as her income. If her total income from all sources is over her personal tax allowances, then she will have to pay tax on it.

It will not affect her Attendance Allowance, nor her State Pension, but may affect Pension Credit.

I suggest seeing a Benefits Advisor or Welfare Rights Officer (probably at the CAB).

Thanks, the tax aspect was why I was wondering whether it would be better to sign over the house so the income would be mine and I would then be liable for the tax, rather than her, but I would prefer not to have the complication of doing all that if possible.

CAB guy I saw this morning really didn't have a clue and told me to make an appointment with someone else in another town but there's at least a 2 week waiting list. I don't have 2 weeks as I need to make a decision about a job I'm about to start in the next couple of days.

How should I go about seeing a Benefits Advisor please?

thanks again