Deprivation of Capital - Buying Shared Ownership

GirlFromMars_2

BurnleyBob wrote: »

Ideally you'd want it in writing from the DWP, who administer both types of ESA, and from the LA, who administer Housing Benefit and Council Tax Support on behalf of the DWP where the shared ownership is, that you'd be eligible to claim income-based ESA plus the other two so that you can present that evidence to satisfy the HA that you'd be able to meet your rent liability to it should you proceed.

I doubt you would receive an unqualified yes from them or an indication that it should be okay because under the current rules, in my opinion, it would be deprivation of capital. Although I agree with your 'ludicrous' comment, the simplest solution would be not to travel that path and instead act on the recommendation from the Advice Centre re the 26 week rule as those tasked with deciding whether you fit the criteria for claiming means-tested benefits will have to base their decision on their interpretation of those rules.

... can you explain why you think this would be Deprivation of Capital? ... from what I can tell at the moment the house is Disregarded Capital as my brother is living there and he claims DLA. So I couldn't sell my half of the house to him and buy a new one?

You stated that the home you half own you 'cannot live in' and that returning to live there 'isn't an option' but didn't expand upon the reasons why. Other than an extraordinary set of circumstances, legally you would be able to live there whenever you wish. If you meant it would merely be awkward or unsatisfactory for a variety of reasons then I'm afraid those would be unlikely to convince an impartial bureaucrat that you hadn't deliberately deprived yourself of capital.

Couldn't you ensure you're resident there for a very brief period before and on the date that the payment from your brother clears into your bank account? If you can, be sure to declare your new address to the DWP, LA, etc, the instant you move back in for their records to be updated.

I need to be on the housing register where I'm buying a house ... if I move into another area wouldn't that remove me from the housing register? ... Also three adults and a baby in a two bed house don't fit ... I really couldn't live there without forcing my brother to move out ...

From what I can see from the decision making rules provided the house is currently Disregarded Capital (a close relative who's incapacitated lives there) ... then once it's sold the money would go to the solicitor to be ready to buy the new shared portion of the shared ownership house (which would be disregarded for 52 weeks) ... then it would be converted back into a home that I would live in (which would again be disregarded capital) ... I'm not sure where I'm Depriving Myself of Capital ...

If the home I currently own is indeed Disregarded Capital as my brother lives there, surely I could currently claim full housing benefit, so selling it, buying somewhere on shared ownership, and claiming a fraction of the housing benefit should be doing the right thing?

Thanks!

BurnleyBob

You haven't taken onboard the nuances of disregarded in relation to means-tested benefits.

I'd overlooked your earlier remarks about the capital being disregarded. This link to another DWP (official government) site http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/pc10s-guide-to-pension-credit/capital-disregards/#notlive under Legislation 23 says the value of the property [or your share of it] can be ignored if a close relative who's sick or disabled lives there.

My understanding is that would mean you could technically have capital worth literally any amount tied up in that house and be able to claim means-tested benefits - provided your income and other capital and savings were sufficiently low enough to - but only for as long as its value remained unrealised. Once it is realised and let's say it's currently worth £50K then you wouldn't be able to claim Housing Benefit, etc, as you'd be over the allowable maximum of £16K.

If you lived there it would become your home and when realised you'd be over the limit but you would have a window of many months to purchase another property as your new residence with some or all of the proceeds and, as you know, that wouldn't be deprivation of capital.

If you were genuinely homeless then again £50K landing in your account and you buying a property to reside at wouldn't be classed as D of C. Though doing so in your present situation could easily be viewed by a decision maker (or whomever) as that 'cause they might well conclude you'd be abandoning a secure environment without acceptably good enough cause and with it commit D of C.

It would appear you could have claimed means-tested benefits for years prior due to your brother's poor health that makes your share of the property valueless when determining those payments. That would also mean you can rent a place anywhere in Britain today with state aid except, bizarrely, the house you own half of and the one you're living at as those would be problematic for different reasons.

As I suggested in an earlier post, you have the legal right to entry at your brother's home at any time. Not exercising that for the reasons you have outlined here wouldn't impress a decision maker.

I have no idea concerning the housing register rules and what effect moving from the area would entail.

Apologies if some of the above comes across as a little brusque as it wasn't meant to be.

The good news is you can escape your abode easily enough but your preferred getaway route will be a more hazardous one.

GirlFromMars_2

BurnleyBob wrote: »

You haven't taken onboard the nuances of disregarded in relation to means-tested benefits.

I'd overlooked your earlier remarks about the capital being disregarded. This link to another DWP (official government) site under Legislation 23 says the value of the property [or your share of it] can be ignored if a close relative who's sick or disabled lives there.

My understanding is that would mean you could technically have capital worth literally any amount tied up in that house and be able to claim means-tested benefits - provided your income and other capital and savings were sufficiently low enough to - but only for as long as its value remained unrealised. Once it is realised and let's say it's currently worth £50K then you wouldn't be able to claim Housing Benefit, etc, as you'd be over the allowable maximum of £16K.

If you lived there it would become your home and when realised you'd be over the limit but you would have a window of many months to purchase another property as your new residence with some or all of the proceeds and, as you know, that wouldn't be deprivation of capital.

If you were genuinely homeless then again £50K landing in your account and you buying a property to reside at wouldn't be classed as D of C. Though doing so in your present situation could easily be viewed by a decision maker (or whomever) as that 'cause they might well conclude you'd be abandoning a secure environment without acceptably good enough cause and with it commit D of C.

It would appear you could have claimed means-tested benefits for years prior due to your brother's poor health that makes your share of the property valueless when determining those payments. That would also mean you can rent a place anywhere in Britain today with state aid except, bizarrely, the house you own half of and the one you're living at as those would be problematic for different reasons.

As I suggested in an earlier post, you have the legal right to entry at your brother's home at any time. Not exercising that for the reasons you have outlined here wouldn't impress a decision maker.

I have no idea concerning the housing register rules and what effect moving from the area would entail.

Apologies if some of the above comes across as a little brusque as it wasn't meant to be.

The good news is you can escape your abode easily enough but your preferred getaway route will be a more hazardous one.

Thanks heaps, and no problem sounding brusque ... tisn't you who set up the rules! Thanks for helping me decipher this!

It used to be my home, does that count at all? ... unfortunately I moved out permanently last year, so beyond the 26 week limit.

Once I've realised the capital tied up in the house, does it not become earmarked capital destined to be used for something I can live in? ... ie, the cash is only ever going to be used to buy a home from the housing association for me to live in.

I'm not living in a secure environment at the moment. My current living situation is detrimental to my health. However, I haven't filled out the relevant health forms for the Local Authority Housing Register as I didn't think I needed to ... would it help matters somewhat if the Local Authority knew I needed to move based on health grounds?

I have spoken to my brother about the possibility of me having to move back in for a period of time ... he was aggressively against that suggestion and has said he would barricade the house ... if I were forced to live there it would be bad for my health and my brother's health, and would be seriously detrimental to my family support system. I doubt my family would ever speak to me again, and I'm sure my brother would kick up a fuss about buying my share for market value, which I need.

And I find it hard to believe the local authority here would keep me on the housing register if I moved across the country. Would it be possible to live there part time and keep a second address here?

It's loopy that the the Local Authority wouldn't have a problem with me moving into rented accommodation with Full Housing Benefit, instead of allowing me to buy my own home.

I can't believe it's taken till now to realise this ... it was a benefits advisor who first suggested I sell my house and buy a shared ownership place ... *sighs*

Thanks!

ETA ... hypothetical ... if someone sold their home, and fell outside the 26 week rule before buying a new one (I know it's somewhat extendible) but would that mean they would never be able to re-invest the capital in a home again and be entitled to means tested benefits?

BurnleyBob

The user Housing Benefit Officer would make a better stab of answering your hypothetical query to explain how they make diminishing notional capital calculations, though it certainly wouldn't disallow you forever as it's plain your half of the house isn't an enormous sum.

Placing my virtual decision maker's hat on again, I'd want more than your word as evidence that bruv was so intransigent. A written statement signed by him confirming his unwillingness wouldn't cut it either because as siblings I would be suspicious of collusion to help you. I'd need third party stuff, maybe from a solicitor detailing legal moves you made or a police incident report with details of him screaming "hop it!" at you from behind the front door when he refused access.

I can't see a part-time address as a solution as you can only declare one main residence and it seems you need two main ones simultaneously for the housing register and at bruv's in order to swerve the D of C problem.

Being slung out on the street from where you are now to present yourself as homeless to various bodies, whether that be contrived or not, wouldn't be a solution because that pesky decision maker would be aware you own half a house and would require some convincing that you made strenuous efforts to effect your legal right to live there.

Hypothetically, you could live at bruv's place officially without stepping inside there. That would entail making a false declaration though and he'd have to be onside with that and be prepared to fib in the unlikely event that he's asked. But even that spot of naughtiness might not enable you to spend your share on the property you want as it seems you need to be resident in that area to purchase it.

Sherlock himself would be scratching his head trying to solve this enigma.

GirlFromMars_2

BurnleyBob wrote: »

Sherlock himself would be scratching his head trying to solve this enigma.

LOL! ... thanks for trying! ... ok, so tell me this, how is it buying a car to drive isn't deprivation of capital, but buying a house to live in is deprivation of capital?

... if I can prove I need somewhere to live after I've sold my share in the house, why can't I use the money to buy somewhere to live ...

... if I could prove I needed a car and I bought a car that brought me down under the capital limits that would be ok right?

paddedjohn

OP, have you been charging your brother rent for your half of the property? if not why not.

GirlFromMars_2

paddedjohn wrote: »

OP, have you been charging your brother rent for your half of the property? if not why not.

... nope ... he's been responsible for maintaining the property though ... it's one we inherited as kids and we grew up in it so he just continued living there ...

Housing_Benefit_Officer

http://www.dwp.gov.uk/docs/dmgch29.pdf

The property would be disregarded for means tested benefits as it is occupied by someone who is incapacitated. So you could claim with the DWP.

29433

29437

Deprivation of Capital rules

29805 onwards

29843 - may be helpful - get something in writing from the DWP saying it isn't deprivation.

GirlFromMars_2

Housing_Benefit_Officer wrote: »

The property would be disregarded for means tested benefits as it is occupied by someone who is incapacitated. So you could claim with the DWP.

29433

29437

Deprivation of Capital rules

29805 onwards

29843 - may be helpful - get something in writing from the DWP saying it isn't deprivation.

... thanks! ... that looks to be really helpful!

... this is going to sound like a stupid question ... but how do I go about contacting DWP and the Local Authority to get written confirmation that it's not deprivation?

The house I am selling was my main home at one point ... my brother and I own it jointly, and as a close relative he has been living there all the time we've owned it ... so does 29535 apply? ... or do I need to have been living there at the time I sold it? ... it seems later on they have a lot of information about the difficulties of selling a share in a jointly owned home 29642 ... which explains why I've waited until my brother is able to buy my share to move on and buy something else ...

... I really need a decision as quickly as possible as the housing association and I were in a position to buy until this came up as an issue on yesterday ... the housing association were planning on putting in an offer tomorrow, but I'm guessing I have to stop that now until I know more about what the LA / DWP will decide ... is there any chance in the world that the LA / DWP won't take another 10+ weeks to give me an indication of their thinking?

Thanks heaps for the help! x

GirlFromMars_2

Thanks for everyone's help with this!

I have written responses from both DWP and the Local Authority advising me that spending this money on a Shared Ownership Property is just fine, and won't be counted as Deprivation of Capital for the purposes of means tested benefits including Housing Benefit and Employment and Support Allowance.

... in case anyone else faces a similar situation in the future here's what happened ... I phoned both the DWP and Local Authority and was advised by both departments to put my situation in writing so that they could respond and give me an answer.

The Local Authority were especially helpful and immediately spoke to a decision maker about my case, and allowed me to discuss with her what I was planning on doing and gave me an thorough answer stating that I would be entitled to Housing Benefit if I spent my capital on a Shared Ownership Property to live in. She asked me to email her the details so that she could email me back immediately so I could move forward.

The DWP person who I spoke to on the phone had no idea that they could advise me about this at all, and spent about five minutes telling me that they could only make a decision or give me any advice after I'd bought the property & applied for IR ESA (ie after I couldn't do anything about my decision) ... her supervisor must have heard what she was saying though, and interrupted to tell us that I could write to the Customer Service Manager of the Local Jobcentre and they would be able to advise me about my situation. Which I did ...

... the DWP advice was the same as the Local Authority Advice, that I can spend the money on a house to live in and it won't affect my entitlement to IR ESA. They advised that all of the money from the sale of the current house should go into a separate bank account specifically for the purpose of buying a new property,as this would indicate I have every intention of using this money for the purpose of buying a new property and would allow them to disregard the money as capital.

So ... I shall mostly be moving forward and buying a home! ... thanks for all your advice!

... speaking to the DWP & Local Authority was super scary after so many people (including professional benefits advisers) were sceptical about the chances of them giving me a positive response, but ultimately it was the only thing I could do to get any clarity on the issue ... and as it turned out both came back with a positive response and will allow me to use the money in a positive way to improve my life!

Thanks! x