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Deprivation of Capital - Endownment
dori2o
Posts: 8,150 Forumite
Posting for a friend.
He retired due to ill health 2 years ago after 43 years of working, and have been managing to pay the payments on the endownment mortgage from their DLA (him and his wife both get DLA).
The policies (3 of) matured this year. One in June, one in August and one in November. The amounts received totalled £14500 but didn't cover the mortgage and was short by approx £4000.
They managed to get the money together (borrowed from his MIL in lieu of part of wifes eventual inheretance) to pay off the mortgage in full following receipt of the final policy.
He has now received a letter from the LA stating his CT benefit has been stopped and asking him to send in bank statements and mortgage policies etc.
He phoned the council to ask why and was told that they considered the payments he received to be above the savings limits and that by paying off the mortgage he was in breach of the rules and should have lived off the money he received from the policies.
I've said to him I don't believe this is right but now I'm not so sure.
Any help is appreciated.
He retired due to ill health 2 years ago after 43 years of working, and have been managing to pay the payments on the endownment mortgage from their DLA (him and his wife both get DLA).
The policies (3 of) matured this year. One in June, one in August and one in November. The amounts received totalled £14500 but didn't cover the mortgage and was short by approx £4000.
They managed to get the money together (borrowed from his MIL in lieu of part of wifes eventual inheretance) to pay off the mortgage in full following receipt of the final policy.
He has now received a letter from the LA stating his CT benefit has been stopped and asking him to send in bank statements and mortgage policies etc.
He phoned the council to ask why and was told that they considered the payments he received to be above the savings limits and that by paying off the mortgage he was in breach of the rules and should have lived off the money he received from the policies.
I've said to him I don't believe this is right but now I'm not so sure.
Any help is appreciated.
[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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Comments
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If you go over the capital limits you need to advise the LA/ DWP etc even if you will be legitimately spending that money shortly afterwards. Were the endowments specifically set up for the mortgage, and does the paperwork reflect this? If so, there should not be a problem once the LA have confirmed this.0
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The endownments were specifically for the house.tomjonesrules wrote: »If you go over the capital limits you need to advise the LA/ DWP etc even if you will be legitimately spending that money shortly afterwards. Were the endowments specifically set up for the mortgage, and does the paperwork reflect this? If so, there should not be a problem once the LA have confirmed this.
I have just learned that one of the endownments was paid directly to the Halifax from the provider, but the other 2 (one with the Halifax and one with Legal and General) were paid to my friends bank account, but were transferred to Halifax via a BACS payment the same day they were received.
He has no idea why the Halifax payment couldn't be paid direct despite the mortgage being with the Halifax.[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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providing the end of the mortgage (25years?)was at the same time as the maturity of the endowments then no problem and no DOC,if thats not the case then they could be treated as having notional capital i.e. not got the money but treated as having it
did they and do they still get income support?0
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