Can parents gift or sell house to their children and receive pension credit?

allen35

Hope this helps:

There are no time limits governing when someone can be regarded as having notional capital. However, the longer the time between the disposal and the application for financial help, the harder it will be for the local authority to show that the disposal was made in order to reduce the resident's liability for fees.

In some circumstances, a resident might consider giving away capital in order to avoid this being included in their assessment. However, rules and local authority powers are designed to prevent this.

An owner occupier may consider it would be a good idea to give away their home, provided they can preserve their right to live there during their lifetime. There is a legal process for doing this. The consequences for donor and recipient of taking such action could be both complex and far-reaching. The general rules about deprivation of capital apply. Alternatively, the recipient might lose control over the property by, for example, the property being treated as an asset in a divorce settlement, the recipient dying before the donor, or the recipient being made bankrupt. A resident considering taking action of this kind should be urged to obtain information from a specialist organisation and to take independent legal advice.
If the local authority decides that a resident has deprived themselves of capital in order to avoid or diminish their residential care fees, it will treat them as still possessing this capital. This is known as notional capital. It will calculate their fees as if they still possessed the capital and will try to recover the assessed fees from them. The rules on diminishing notional capital apply in the same way as for income support. The local authority must establish that the resident actually knew of the capital limit rule.

Recipients of residents' capital

If the local authority has decided that the resident has deprived themself of capital in order to avoid or diminish the care home fees, it can in some situations recover some of its costs from the recipient of the capital.

The paragraphs immediately below deal with recovery of capital from the recipient, that is, the person who received the capital. A client in dispute with a local authority about how the rules on recipients of capital should operate, may find it useful to refer to the text of section 21 of the Health and Social Security Adjudications Act 1983 which governs this area.

Transfers within six months of going into residential accommodation There are specific powers for the local authority to recover capital from the recipient if the transfer was less than six months before the date the local authority arranged the resident's care in the care home, or if the capital was disposed of while the resident was living in the care home. The local authority can do this whether or not the recipient is a relative and whether or not the recipient knew of the resident's circumstances. These powers are provided by section 21 (see previous paragraph).

Transfers over six months before entering residential accommodation A local authority could use powers under the Insolvency Act 1986 to set aside a transfer of capital. This would affect both the resident and the person to whom s/he gave the capital.

ellie_the_doggie

my dad is in a nursing home he had to sell his house to fund the monthly payments.
Does anyone know how much he is allowed to have before it goes to the social paying and also does anyone know how much he is allowed to gift each of his children each tax year

Mojisola

skcollobcat10 wrote: »

Could they gift the house to their children and live rent free, BUT if they need a care home in the future, seeing that the children got the house cheaper, could the children pay the fees between them?

The authorities don't care who pays the care home bill as long as it is paid.

Realistically though, would the children have the cash spare when it was needed for the fees?

nannytone_2

ellie_the_doggie wrote: »

my dad is in a nursing home he had to sell his house to fund the monthly payments.
Does anyone know how much he is allowed to have before it goes to the social paying and also does anyone know how much he is allowed to gift each of his children each tax year

i'm sure i read somewhere that its around the 23k mark. not positive though.

allen35

The capital limits used to calculate a resident's care home fees are uprated every year:-

• in England, the upper capital limit is from 12 April 2010, £23,250 and the lower capital limit is from 12 April 2010, £14,250
• in Wales, the upper capital limit is £22,000 and the lower capital limit is from 12 April 2010, £22,000).

If savings above the upper limit you pay full costs, equal/below the lower limit is disregarded and between upper/lower is classed as tariff income.