Does Pension credit reduce, if person buys property?

TheCatMan

Hi just a quick question my father who gets pension credit may consider buying a property under his name, but he is concerned this would change the amount of money he gets with his state pension.

Does anyone know if it gets reduced or cut due to owning a property?

thanks

Own_My_Own

Confused.
Surely he is too old to get a new mortgage if he gets pension credits.
And if he is buying cash he must have too much money to qualify for pension credits.

seven-day-weekend

Does he get State Pension or Pension Credit (or a mixture of both)?

And how is he funding his property?

meercatsunited

there are two types of pension credit, one when you have saved and are over 65 and the other is the basic one that we are all familiar with.

he is probably in receipt of a smaller pension credit due to being frugale and saving for his old age. you can actually have a considerable sum saved to be able to get this.

it will reduce or disappear if he uses it to buy a house but then may be entitled to the basic pension credit.

if the BA believe he has bought a house just to enable him to receive more benefits they may disallow all claims.

if he already has a home to live in then he does not need to buy a property and they will question this.

TheCatMan

To clarify he is getting pension credit himself, and is buying the house with his 2 sons.

Would he be able to do this and still get his pension credit ?

I feel it may get stopped or reduced ?

oldboy64

TheCatMan wrote: »

To clarify he is getting pension credit himself, and is buying the house with his 2 sons.

Would he be able to do this and still get his pension credit ?

I feel it may get stopped or reduced ?

Of course he will. Buying a home using capital is not treated as available capital.

Take someone that inherits £400,000. If that money and any money he may get from his current home is used to buy another home, he will still get his full Pension Credit.

It's a common situation for those on a means tested benefit who come into capital. To maximise their benefit income, the vast majority invest it in their only home. Your home is exempt when calculating Pension Credit/Income Support etc .

You could very well own a property outright valued at say £750,000, but you will still be entitled to full means tested benefits.

Will it be his main and only residence?

seven-day-weekend

Who will live in the house?

TheCatMan

thanks oldboy & seven day weekend

Yes will be his only place of residence, with his 2 sons for now obviously unsure if the Sons will move out but that is in the future.

It is nice to hear his pension will not be reduced, I thought I read somewhere a pensioner that had over 10k or owned houses would be exempt from pension !

oldboy64

TheCatMan wrote: »

thanks oldboy & seven day weekend

Yes will be his only place of residence, with his 2 sons for now obviously unsure if the Sons will move out but that is in the future.

It is nice to hear his pension will not be reduced, I thought I read somewhere a pensioner that had over 10k or owned houses would be exempt from pension !

In part you are right. If this property will be his only and main home, then it is ignored. If he has a whole stable of properties then yes they will be taken into account.

There is no such thing as being exempt from Pension Credit. It depends how much assessable capital they have over £10,000. As the level of capital goes up so the Pension Credit comes down at the rate of £1 for every £500 of capital over £10,000.

So someone that has £30,000 of capital, they will lose £40 of Pension Credit every week - capital of £90,000, they will lose £160.

seven-day-weekend

His house that he owns and lives in is not counted in the means test. A house that he owns but does not live in is classed as capital and is counted in the means test.

So, if it's his only home and he lives there, he should be fine

Mojisola

Own_My_Own wrote: »

Confused.
Surely he is too old to get a new mortgage if he gets pension credits.
And if he is buying cash he must have too much money to qualify for pension credits.

This is what's puzzling me.

Guaranteed Credit tops up a single person's income to £145.40 if their regular income is less than this. There are more permutations if you are disabled and so on.

Savings Credit gives a little back if you have savings - up to £18.06 for a single person.

Which is he getting?