gift house, benefits stop?

BigAunty

Perhaps the DWP take the view that it is a joint claim - benefit income for couples get based on total household income/capital, it is treated jointly? I don't know, other posters can comment on this.

Aside from benefits issues, there could also be a potential issue if she ever needs to move into a care home - the local authority will not be best pleased if they detect that she had her own property and has gifted it. Comes under the same rules - deprivation of capital.

The rules are there to stop the taxpayer from footing the bill for means tested benefits and services for claimants who gave away their means.

Google the term to find out more. For care homes, see the info on the Age UK website.

Dunroamin

elyag wrote: »

She doesnt claim benefit. she just wanted to give me the flat to help me as I can't get a mortgage to buy it from her. It affects her partner's benefits and yes, you are correct< i am not looking for a fraudulent solution, hence asking on a very public forum!!!!!!!!!

She may not be claiming benefits at the moment but she will be when she moves in with someone who gets PC.

You and your mother may not be intending to commit fraud but your asking in your first post for ways round the rules comes very close to it, as I'm sure you'll see when you think about it.

Errata

No need for her to lose her house. She can simply rent it to you and the rent will more than cover the lost pension credits.

Dunroamin

skintandscared wrote: »

... or just does what they intend to do and her partner foregoes his pension credits. They can use the proceeds from the flat to compensate for it. Or just do without it. If your mum can't afford to move in with her partner without the pension credits, she can't afford to "gift" you her home.

I think that this would really be the best thing or what will happen if anything goes wrong (either through death or a relationship breakdown) and the mother could find herself homeless and unable to claim benefits because she'd given away an asset.

zagfles

elyag wrote: »

Thanks for your replies I am working full time and not in receipt of any benefits. My mum doesnt work and also doesn't receive any benefits, it only affects her partner's pension credits. The DWP have given them 6 months to sell. Surely their benefits would stop at this point anyway because they have funds in the bank?
She was going to be giving me the flat anyways to help me out as I need somewhere to live, not to get benefits as she isn't entitled anyway.
Thanks again for your replies, I think our hands are tied here. she either loses her house or doesn't live with her partner

I think the DWP have to show that she deprived herself of the capital in order to get pension credit or more pension credit. If there are convincing enough other reasons for her decision, and gaining more benefit was not one of them, then they should still be entitled.

Of course that presumes they believe the reason had nothing to do with securing extra benefit. See the links below for the DWP guidance and the law itself:

http://www.dwp.gov.uk/docs/hbgm-bp1-assessment-of-capital.pdf

http://www.legislation.gov.uk/uksi/2002/1792/regulation/21/made

seven-day-weekend

Your mother will be moving in with someone who receives a means-tested Benefit. As soon as she does that, their income will be assessed as a couple. Therefore they as a couple will be considered to be claiming a means-tested Benefit.

Your mother will have a house that she no longer lives in, therefore it will be classed as an asset and its value will be included in the means test.

If she gives it away, its value will still be counted in the means test, because she could have sold it at market value.

Therefore they (as a couple) will lose the Pension Credit because they will no longer qualify under the means test.

Hope this helps.

Whiteknight

elyag wrote: »

My mum would like to gift me her flat as she is moving in with her partner and the flat is unsuitable for his disabilities so they are moving to an adapted council house with level access. She has been told their pension credits will stop if she gifts me the house. Can anyone tell me why this is, as the flat wouldn't be her capital anymore, it would be mine, and she wouldn't continue to live in the house or gain any benefit from it. Also, if this is the case, is there a way round it? many thanks for reading guys

I'm sure others have already given you the answer but I don't have the time to read through this thread.

Your mother has property she no longer needs/wants to live at this property why should she have Pension Credit, she should sell the property and the savings will be added to her and her partners capital.

If she puts the house up for sale it can be disregarded for Pension Credit purposes for up to six month anyway!!!

Why should the state be paying your mother benefits when she clearly does not need them if she can afford to give money away.

dd101

When I volunteered in housing advice, this problem came up all the time. More so when people went into care homes. It kind of seems wrong in a way that people work hard all their life, pay their taxes but because they own a home, they have to sell it to pay for their care. I think people should be able to have this paid for them, for working their whole lifes and paying their taxes. People want to leave their homes to their children and this makes it very difficult and as stated, you cant just "gift it".

In this case, if she "gifts" the home now, she may not be entitled to paid care, if the time comes and she needs it.

As for her moving in with her partner, they are assessed as a couple and so her "gifting" the house will be taken into consideration.

How many bedrooms does the house have? I am just thinking, if there was 2 bedrooms, could you house share? If you are very desperate for a place to live and cannot afford a lot of rent, you could rent the other room out to someone, that would cover the loss of pension credits, this money will go straight to your Mum and you can live there for less money. I know its not ideal but if you are DESPERATE for a home, it puts a rough over your head, without you paying all the rent because I do not think your Mum and boyfriend will be entitled to pension credits with this asset??

Obviously, as you said the other option is for your Mum not to live with her partner but in reality, she is going to stay a lot and she could easily end up staying too much or start living there and then this would be fraudulent claims for pension credits. So I personally think the best thing is that your Mum rents the house while she decides if she wants to sell and keep the money for the future and use it to replace the pension credits OR as your desperate for a home, rent with someone.

If your not claiming benefits and working, do you not rent a home already now? I know the idea of being able to save money and live rent free is a very appealing one but in reality, unless you've got tons of money in the family, it wont happen. My Nan had a 3 storey house in the heart of Fulham that she inherited after Mum died and Dad was ill. They was desperate to hold onto it because Fulham was up and coming but to pay for his care when she couldnt care for him anymore, they had to sell. Sold for £70k, now worth 3million. Nan was forced to be housed by the council because she was living at the home with her children before Dad went into care. Seems cruel that the cost of elderly care can change the whole dynamics of someones life.

margaretclare

seven-day-weekend wrote: »

Your mother will be moving in with someone who receives a means-tested Benefit. As soon as she does that, their income will be assessed as a couple. Therefore they as a couple will be considered to be claiming a means-tested Benefit.

Your mother will have a house that she no longer lives in, therefore it will be classed as an asset and its value will be included in the means test.

If she gives it away, its value will still be counted in the means test, because she could have sold it at market value.

Therefore they (as a couple) will lose the Pension Credit because they will no longer qualify under the means test.

Hope this helps.

This explains it in words of one syllable.

Although Mum doesn't claim any benefits and neither do you, the moment she moves in with her partner who does, her income and assets are counted with his means-tested benefits and they are classed as a 'couple' for that purpose.

Isn't it terribly sad - I've often heard of older people, who might be lonely otherwise, having to think twice of entering into another partnership because of financial worries? Life can be so darned lonely.

Pricivius

margaretclare wrote: »

Isn't it terribly sad - I've often heard of older people, who might be lonely otherwise, having to think twice of entering into another partnership because of financial worries? Life can be so darned lonely.

In the OPs's instance, where are the financial worries? Mum owns a flat so she seems pretty comfortable financially. If she moves in with her partner, she would be expected to use her finances to support them both - I'm struggling to see what's wrong with that?