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Compulsory purchase rights re: benefits

Can someone offer advice?. My parents had their house purchased by Liverpool City Council approx 2 years ago under a regeneration scheme as the houses were to be demolished. They were entitled to such things as home loss/disturbance payments etc on top of the current value for their property. At the age of 79 they obviously couldn't take on a new mortgage so ended up renting a house from a private landlord. They were then entitled to claim pension credits, housing benefit etc without this money being taken into account as savings and were told this would be the case indefinatley for the future also.
My Father passed away last month and my mum has now been told as she has 'savings' of approx £16,000 she has to provide evidence of bank statements etc for them to assess if she is still eligible for pension credit...Can this be fair or even legal?. My parents had lived in their property for over 53 years and had no mortgage,no debts as such and they didn't want to move but had no choice in the end as they were one of a few people left in their street and felt very isolated. Is my Mum not covered by any law that should be helping her and not trying to take away what she has left which came about through no fault of her own?. I would be extremely grateful for any sound advice. Thanks.
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Comments

  • silvercar
    silvercar Posts: 49,676 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    You need to post on the benefits board. I've not heard of any money being excluded from savings for benefits rules, but clearly HB when the council has CPO'd is a special case. The experts on benefit hang out over there.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • theartfullodger
    theartfullodger Posts: 15,715 Forumite
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    edited 17 June 2011 at 9:58AM
    What is & is not considered for various benefits (income, status, age, savings, family members) differs by benefits, but I suspect these savings will have to be considered.

    Fair?? Nope. Legal, probably.

    See..

    http://england.shelter.org.uk/get_advice/paying_for_a_home/housing_benefit_and_local_housing_allowance/housing_benefit_calculations#2
    Savings and investments

    If you have any savings or investments these can be counted as income too. This includes redundancy payments. If you have savings of over £6,000, this will affect the amount of housing benefit you will get. If you have savings of £16,000 or more, then unless you are aged 60 or over and receive the guarantee credit of pension credit, you will not be entitled to any housing benefit.
    Suggest going to local CaB for advice and/or calling Shelter free helpline 0808 800 4444 but expect a delay as they have too too many demands on this excellent service from a wonderful charity.

    Also beware savings (from whatever source ..) may mean you don't qualify for free legal aid ...

    Sorry to read your story.

    There would have been no HB/LHA anyway in their own, owned, home at all...

    Re.Pension credit try this online calculator to see if it says she's entitled or not...
    http://www.direct.gov.uk/en/Pensionsandretirementplanning/PensionCredit/DG_180167
  • silvercar
    silvercar Posts: 49,676 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    There would have been no HB/LHA anyway in their own, owned, home at all...

    it wouldn't have been needed because they would have been living in their own home with the mortgage cleared by the age of 79.

    Really the CPO payment should have been used to buy a property mortgage free, avoiding this situation. I'm surprised that the money can be ignored for HB purposes for more than a short stop gap time.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • Caveat_Mortgagor
    Caveat_Mortgagor Posts: 286 Forumite
    edited 17 June 2011 at 11:32AM
    Kikikat wrote: »
    They were then entitled to claim pension credits, housing benefit etc without this money being taken into account as savings and were told this would be the case indefinatley for the future also.

    I am astounded if this is true!

    It sounds to me like they were given bad advice and its now going to really cost.

    I am sorry for the predicament that you and you mum are in Kikikat. And without wanting to sound like Albert Hindsight, does anyone else really think that the advice they were given about being able to claim housing benefit indefinitely was bad advice?

    2 years ago the state of public finances was no secret. Even if they were entitled to the benefit back then, how on earth could anyone have advised two vulnerable old people on what to do with their money by saying 'this benefit is ringfenced' or words to that effect?

    To my mind, someone with a big pot of cash would be the first to lose housing benefit entitlement. And without wanting to sound unsympathetic to your situation, I think that in general terms, a wealthy person with a big pot of cash should have this benefit withdrawn.

    As such, i think you need to start with finding some proof of this advice and consider whether a legal challenge is possible. Maybe they would have used the money from the sale to buy another house if the correct advice was given at the time.

    I know it would involve a lot of hassle that she probably doesnt want, but could your mum still afford to buy with her savings? Prices have fallen in the last 2 years, so maybe she would still have a little nest egg left over.
  • poppysarah
    poppysarah Posts: 11,522 Forumite
    AFAIR money from the sale of a house that is intended to be used to buy another house is exempt from benefits for some time...
    Don't know how long though.
  • beecher2
    beecher2 Posts: 3,677 Forumite
    Tenth Anniversary 1,000 Posts Combo Breaker
    When does your mum's AIP (Assessed Income Period) come to an end for Pension Credit? I thought that she wouldn't have to tell them a change of circumstances until it ended, and that if you were over 80 you wouldn't be re-assessed.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
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    silvercar wrote: »

    Really the CPO payment should have been used to buy a property mortgage free, avoiding this situation.
    One of the problems with a lot of these CPO cases is that the money received is nowhere near enough money to buy another house anywhere.

    e.g. you might receive £50k, they knock down your house and build £150k houses on the spot - and all other houses within 50-100 miles are £80k.

    There was even a programme about this on the telly - giving the actual figures and interviewing people in these areas who were being CPO'd but were hanging on because the money couldn't buy them anything anywhere.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    poppysarah wrote: »
    AFAIR money from the sale of a house that is intended to be used to buy another house is exempt from benefits for some time...
    Don't know how long though.
    I think it's 6 months. But CPO money rarely buys another house as a lot of the people in this position are already retired and couldn't get a mortgage for the difference even if they wanted to.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Here's a random paper about it, with pieces from Shelter and The Rowntree Foundation.
    http://www.welshstreets.co.uk/wp-content/uploads/2011/04/oliver-jenkins-DOSSIER.pdf

    Rachman's also got a mention on page 7 (Simon Jenkins, Guardian)
  • darkpool
    darkpool Posts: 1,671 Forumite
    One of the problems with a lot of these CPO cases is that the money received is nowhere near enough money to buy another house anywhere.

    you get the market price of the house plus 10%. why not just buy another house of the same value?
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