Claiming Housing Benefit with some savings

Tomb1984

My father is currently on Incap Benefit and this is topped up with Pension Credit - he has no savings and no income so also gets Housing benefit and help with council tax - this has been the case since he was forced to quit work 3 years ago.

he is due to turn 65 early in 2014 and will switch to State Pension but he recieved a letter from a Private pension this morning (he stopped paying into this when he was made redundant over 30 years ago) and they are offering him a lump sum payment of £16800 plus a annual pension of £3500 approx.

now I know that he will loose some of his housing benefit because he will have more income than just his basic SPension - BUT will the lump sum also effect what he can claim? He wants to give his children some money as we all currently help him so wants to repay us but will this look like he is moving money around to avoid his savings being looked at?

from what i understand anything over £16000 and you are entitled to nothing and then anything under this is classed as an income based on £1 pw per £500 savings - its the £800 over the £16000 that worries me....would he just be expected to pay his own way untill his savings dropped and then he would be reassessed?
he is in desperate need of having his flat decorated, his cooker is broken and he needs a shower fitted as he cant get in and out of the bath (health problems) easily - would these be things he could buy?

any help/advice would be appriciated.

Caz3121

Tomb1984 wrote: »

My father is currently on Incap Benefit and this is topped up with Pension Credit - he has no savings and no income so also gets Housing benefit and help with council tax - this has been the case since he was forced to quit work 3 years ago.

he is due to turn 65 early in 2014 and will switch to State Pension but he recieved a letter from a Private pension this morning (he stopped paying into this when he was made redundant over 30 years ago) and they are offering him a lump sum payment of £16800 plus a annual pension of £3500 approx.

now I know that he will loose some of his housing benefit because he will have more income than just his basic SPension - BUT will the lump sum also effect what he can claim? He wants to give his children some money as we all currently help him so wants to repay us but will this look like he is moving money around to avoid his savings being looked at?

from what i understand anything over £16000 and you are entitled to nothing and then anything under this is classed as an income based on £1 pw per £500 savings - its the £800 over the £16000 that worries me....would he just be expected to pay his own way untill his savings dropped and then he would be reassessed?
he is in desperate need of having his flat decorated, his cooker is broken and he needs a shower fitted as he cant get in and out of the bath (health problems) easily - would these be things he could buy?

any help/advice would be appriciated.

replacing and a broken cooker and getting a shower fitted should be fine. Just make sure he keeps the receipts for the decision maker
Giving money away will not be fine and he will find that he could still be treated as if he has this money

Horseunderwater

If there are some things that need to be bought to replace worn out or broken items and the flat needs a good clean and decorating - fitting a new shower/ wet room - then that would be fine to use the capital sum to get it under the £16k limit for benefits. What may not be a good idea is for him to give away money as that may be seen as deprivation of Capital in order to keep receiving benefits.

pmlindyloo

Your dad cannot be receiving Incapacity Benefit and Pension Credit. You need to check which benefits he is receiving.

If he is on Incapacity Benefit then he may want to consider ending his claim and applying for Guarantee Pension Credit.


He is eligible for Guarantee PC at the present time and it is £145.40 per week.


His personal pension would be deducted from this as would his state pension when he receives it.


However, Guarantee Pension Credit is more generous than other benefits in that you only have to receive the smallest amount of PC and this entitles you to full HB and Council Tax Support. (up to the local housing allowance for his circumstances)


He is allowed £10000 in savings. Any amount over this is deducted from his PC at £1 for every £500. But he can certainly buy a new cooker etc. With his lump sum.


The only thing that he needs to be careful about is depriving himself of capital to claim benefits. As already said the improvements to his home are not a problem. Giving money to his family might be a concern but reasonable gifts at birthdays and Christmas would be OK.


If he decides to claim PC then it would be a good idea to keep receipts for any expenditure.


Come back if you need further help.

Tomb1984

Thank you guys. It would seem that you have confirmed what I thought and its just a case that he needs to listen to me!!

In regards to what benefits he claims ATM I may have that wrong BUT the money won't come through until after his 65th birthday so they will all change anyway.

It's difficult telling him that he can't spend the money- he has spent his life with nothing but enough to get by on, no holidays etc for best part of 10 years etc etc and now he thinks he can help out the family and have a more comfortable retirement! Might just need to be a little less rash with his spending.

lld01

pmlindyloo wrote: »

Your dad cannot be receiving Incapacity Benefit and Pension Credit. You need to check which benefits he is receiving.

You can receive Incapacity Benedit at the same time as Pension Credit. IB is deducted in full from the PC (in the same way as contribution-based ESA).

DWP will review his circumstances when he reaches 65 - it is unlikely he will qualify for Guarantee PC with an occ-pen of £67 per week as well as state pension.

So any savings over £6k (as well as his private and state pension incomes) will be taken into account by HB.

jacques_chirac

Horseunderwater wrote: »

If there are some things that need to be bought to replace worn out or broken items and the flat needs a good clean and decorating - fitting a new shower/ wet room - then that would be fine to use the capital sum to get it under the £16k limit for benefits. What may not be a good idea is for him to give away money as that may be seen as deprivation of Capital in order to keep receiving benefits.

I agree with what you are saying as a whole, but the highlighted phrase is incorrect. Spending money in order to increase your benefit entitlement is deprivation of capital. Spending money on essential works that may coincidentally take you under the capital limits is not.

Tomb1984

Again, thank you
The situation is made more complicated as he isn't entitled to 100% of his SP due to a period when he wasn't working nor claiming any benefits 15 years ago, so his NI stamp wasn't paid. He was offered the opportunity to top this up but as he is now not working he couldn't afford to...this date has now past so can no longer take this option.
He has applied to the Pension service to find out what he will get, it was only a few years so I can't see it making a huge impact.

The purpose of this post was not to find out how to avoid paying his own way but to find out what he can and can't do so he isn't breaking any laws or seen to be committing fraud without knowing.

pstuart

Two things,

I was offered a lump sum etc. with no mentioned alternatives, when I asked they said that they could lower the lump sum and give an enhanced pension.

Buying a pre paid funeral plan is not deprivation of capitol, he may also feel easier knowing that his affairs will be quickly attended to.

Tomb1984

But without knowing how old he will live too- is that possible?

pmlindyloo

lld01 wrote: »

You can receive Incapacity Benedit at the same time as Pension Credit. IB is deducted in full from the PC (in the same way as contribution-based ESA).

DWP will review his circumstances when he reaches 65 - it is unlikely he will qualify for Guarantee PC with an occ-pen of £67 per week as well as state pension.

So any savings over £6k (as well as his private and state pension incomes) will be taken into account by HB.

Apologies - you are quite right. It was late at night and I confused IB and IS

I believe that the lower qualification figure for savings is £10000 when you are over 60. (Hope I've got that right!)