Benefits & Right to Buy

Mara69

I have a question relating to the right to buy and benefits.

Person lives in a council flat, is on full benefits (income based ESA, full HB and CTB). This person has applied to buy their council flat with the full £75k discount. Their son is funding this purchase and will be giving their parent the full £60k into their bank account. How will this affect his benefits (if at all?). For information, the son cannot buy the flat as they do not live in the property but is fully expecting to inherit the flat when his Dad dies. He will then rent it out.

As an interesting aside once the purchase is done and the person owns the property they can then apply to the DWP for help with their service charges, including any potential major works bills.

pickpocketlocket

And this is exactly why RTB needs to be stopped, it is a complete joke!

When the parent has the money in their bank account their eligibility for means tested benefits will stop. As for whether the DWP will allow them to reclaim once the property is bought, or if they will see it as deprivation of capital, they would need to ask before spending the money.

rogerblack

I am unsure the above is correct.
My memory is that it is permitted to use savings to buy a house you will live in.
I don't remember if there is an exclusion saying that this can't be a house you are renting.
I don't think there is, but I'd need to reread.

Face1992

rogerblack wrote: »

I am unsure the above is correct.
My memory is that it is permitted to use savings to buy a house you will live in.
I don't remember if there is an exclusion saying that this can't be a house you are renting.
I don't think there is, but I'd need to reread.

How can anyone have "savings" of £60,000 when they are on benefits?

Mojisola

Mara69 wrote: »

. For information, the son cannot buy the flat as they do not live in the property but is fully expecting to inherit the flat when his Dad dies. He will then rent it out.

As long as Dad doesn't have to go into residential care and the house is sold to pay for it. Or Dad finds a lovely woman to marry, dies first and she inherits the house.

If you give someone a lot of money, you have to be prepared to never see a return on it!

pickpocketlocket

rogerblack wrote: »

I am unsure the above is correct.
My memory is that it is permitted to use savings to buy a house you will live in.
I don't remember if there is an exclusion saying that this can't be a house you are renting.
I don't think there is, but I'd need to reread.

I did not say they could not use the money for the purchase, I said they would need to ask the DWP to determine accordingly. It would be very silly to spend that amount and then have the DWP decide otherwise - that would lead to years without any payments.

There are some things that need more than the word of some stranger on the internet!

clemmatis

Face1992 wrote: »

How can anyone have "savings" of £60,000 when they are on benefits?

1. The money is not their savings. The money comes from their son.

2. "Savings" is perhaps misleading; see the discussion here

http://www.carlisle.gov.uk/advice_and_benefits/benefits/housing_benefits/benefit_calculations/capital.aspx

By the way: did you manage to get the benefits you wanted?

rogerblack

The particular provision I was thinking of seems to only apply if it's money from the sale of your house. Not money you have been given.

It might still be possible, I would agree checking first is required.
I'd first look at if it's possible for the son to simply pay for the house in the name of the father.
Will the council simply not accept a transfer from the son?

If the father never has any control over the money - he can't have deprived himself of capital.

Another option would be that the son insists the father sign a legally binding contract, with a penalty that the money must be immediately repaid, if not used to purchase the house.

Both of these would possibly be avenues to explore with a solicitor that understands benefit law.
See
http://www.b3tards.com/u/e72b6a43f7162171a09b/monacatcollar.jpg for more details.

Once this is done, you can verify it would not be deprivation of capital ahead of time iwht the DWP, and they can't change their mind.

xylophone

The son could lend the money to parent interest free but RPI linked on repayment - he would also take a first charge on the property so that in the event of a sale, he would be repaid capital plus RPI linking?
A solicitor would need to be consulted.

GrungeMeister

The son could pay the £60,000 direct to the council, bypassing his parents. That way they never had the £60,000 in the first place, then deprivation doesn't become an issue in any form whatever.

Sorted.

The DWP will leap at this. Saves £thousands in housing benefit. But they don't give decisions in hypothetical scenarios, unfortunately.

leveller2911

I'm not sure of the current rules are but the rules use to be that if you were in receipt of HB you could not take up the RTB for a certain length of time.