Housing benefit for mortgage?

intranicity

Jowo wrote: »

I could understand the money saving aspect for the public purse for the severely disabled who will never be able to enter employment. As you've indicated, it could work out cheaper to pay the mortgage for 25 years than HB for twice or three times that period.

But as you've noted, it is unpalatable on an ideological level for some that the taxpayer essentially pays for a personal asset, that the individual holds in a private capacity, capital that they later transfer to a family member on their death, for example.

In this scenario, there is scope for thousands of people to inherit estates upon the death of a severely disabled person, worth millions of pounds overall, all paid for by the tax payer and enjoyed by individuals who merely passively receive a property.

Yes, it is a moral dilemma, but playing the devils advocate, at the moment someone in that situation is possible paying (via Housing Benefit) a private landlords mortgage several times over... So which scenario is worse!

Jowo_2

intranicity wrote: »

Yes, it is a moral dilemma, but playing the devils advocate, at the moment someone in that situation is possible paying (via Housing Benefit) a private landlords mortgage several times over... So which scenario is worse!

Playing devils advocate back:-

The private landlord has to pay tax on their rental income and CGT upon the sale of it. An owner occupier does not. The private landlord also experiences a higher degree of risk - non-payment of rent, void periods, the general vissicitudes of business.

I don't know the position of IHT compared to the HB person but assume a private landlord has at least two properties so is more likely to come into the threshold for it.

millym

Mandymull wrote: »

Interesting post....we have two girls, both with profound learning disabilites and are looking in to supported living for them both. we were told by the LD TEAM Benefits officer that THEY could in theory own a property with their HB paying the mortgage....i had never heard of this before but have spoken to tow paretns now of young people with similar disabilites in supported livng who are 'buying' their porperty with thei HB money.....r

That would be the HOLD scheme - Home Ownership for people with Long-term Disabilites. This is shared ownership, with HB/LHA paid on the rented part, SMI paid on the mortgage interest part, and, I would imagine, the purchasers having to pay something towards it from their benefit, although not sure about the last part.

Sounds ideal for your girls, but think it really only works if they get med or high care DLA, which then entitles them to income support?

See the link below, and there are other websites that give details.

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001347

Marisco

I can understand intranicity's point about HB for life etc, but I'm with Jowo on this. Why should someone have their house paid for, only to leave it to relatives when they die. What about a compromise, that they get their mortgage paid, but the house has to be sold on death, and the mortgage paid back to the "state", and the residue go to relatives?

millym

This link provides more info on HOLD -

http://www.mysafehome.info/

Mrs_Arcanum

Jowo wrote: »

I could understand the money saving aspect for the public purse for the severely disabled who will never be able to enter employment. As you've indicated, it could work out cheaper to pay the mortgage for 25 years than HB for twice or three times that period.

But as you've noted, it is unpalatable on an ideological level for some that the taxpayer essentially pays for a personal asset, that the individual holds in a private capacity, capital that they later transfer to a family member on their death, for example.

In this scenario, there is scope for thousands of people to inherit estates upon the death of a severely disabled person, worth millions of pounds overall, all paid for by the tax payer and enjoyed by individuals who merely passively receive a property.

You should also consider many of the people with long term MH problems or LD do not live as long as the general population. It also saves as much as £8,500 pa versus the normal accommodation.

The HA also have to take up the slack when the SO dies or can no longer sustain their tenancy. Now these are very difficult to sell on due to the changes in SMI.

millym wrote: »

That would be the HOLD scheme - Home Ownership for people with Long-term Disabilites. This is shared ownership, with HB/LHA paid on the rented part, SMI paid on the mortgage interest part, and, I would imagine, the purchasers having to pay something towards it from their benefit, although not sure about the last part.

Sounds ideal for your girls, but think it really only works if they get med or high care DLA, which then entitles them to income support?

See the link below, and there are other websites that give details.

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001347

You do need to be on the highest rate now as the main mortgage lenders who supported this scheme have pulled out due to the reduction in SMI. Our company is no longer able to offer this sort of shared ownership any more HOLD Campaign

Family funded shared ownership is about all that we can now do if the family can get a mortgage themselves.

intranicity

Marisco wrote: »

I can understand intranicity's point about HB for life etc, but I'm with Jowo on this. Why should someone have their house paid for, only to leave it to relatives when they die. What about a compromise, that they get their mortgage paid, but the house has to be sold on death, and the mortgage paid back to the "state", and the residue go to relatives?

Sounds a perfect compromise and very sensible to me, I'm in a similar position through being a War pensioner, likely hood is renting for life, I'd jump at a scheme like that, just for the security.

Sadly though, we are talking about politicians here, and they rarely do anything that makes sense.....

Sixer

intranicity wrote: »

Sounds a perfect compromise and very sensible to me, I'm in a similar position through being a War pensioner, likely hood is renting for life, I'd jump at a scheme like that, just for the security.

Sadly though, we are talking about politicians here, and they rarely do anything that makes sense.....

Personally, I think the answer is sensible availability of council houses and other social housing!

intranicity

Sixer wrote: »

Personally, I think the answer is sensible availability of council houses and other social housing!

Yep, but sadly things aren't that sensible nowadays... maybe things will improve, I hope so, but doubt it!

millym

Mrs_Arcanum wrote: »

You should also consider many of the people with long term MH problems or LD do not live as long as the general population. It also saves as much as £8,500 pa versus the normal accommodation.

The HA also have to take up the slack when the SO dies or can no longer sustain their tenancy. Now these are very difficult to sell on due to the changes in SMI.


You do need to be on the highest rate now as the main mortgage lenders who supported this scheme have pulled out due to the reduction in SMI. Our company is no longer able to offer this sort of shared ownership any more HOLD Campaign

Family funded shared ownership is about all that we can now do if the family can get a mortgage themselves.

That's awful! Surely the govt could introduce a rate of SMI for the HOLD scheme that would be sufficient to cover it, since it's only for severely and permanently disabled people?

I really am shocked that they didn't take this into account when they reduced SMI last year. Yet another blow for the sick and disabled in this country! I used to be so thankful that my country looked after people like me, but now the most vulnerable are being put under horrendous amounts of stress due to all the reforms.

I do agree with other posters though, that such schemes should provide a secure home for the disabled, and not provide an inheritance for their offspring. Perhaps SMI could be increased for HOLD, with the condition that ownership returns to the HA when the disabled person dies? Seems like a reasonable compromise to me.