devil and deep blue sea!!!

GirlFromMars_2

jlawrence wrote: »

Thanks Lindy, yes it was a condition of the mortgage (they called it a vehicle???) to have the cash invested because of our low income. They warned us about not taking it out as we would not then be able to replace it when the time came to settle up in 2020 and we would be in breach of the mortgage conditions. I telephoned the ESA centre after they said that we can't get ESA and suggested that the easy way out was to pay off the mortgage using the deposit and take it from there. They said they wouldn't allow that. Seems to me that we made a mistake and should have tied our money up in the house and not have a mortgage.
We bought this house to be near our family but it doesn't have any adaptions like stair lift as there aren't any stairs. We had all of the ground floor doors made wider to get our chairs through before we moved in.
If we paid off the mortgage using the capital the bank have, it is because that would be the only way that we could get benefits. We don't want to move, this is the ideal home. We did downsize to get this one as there were too many rooms in the old house for us to keep clean.

Did you telephone or write?

You need a decision from a Decision Maker, not just whichever telephone operator you happen to get connected to. I had to do this when I wanted to buy a flat with my inheritance, and I was given a decision in writing that I would be allowed to buy a flat without it being considered DoC.

I think you need to lay out your whole situation in writing, and ask them in writing if you can pay off your mortgage early, and if that would be counted as Deprivation of Capital in your situation or not.

The only person who can decide if it's Deprivation of Capital is a Decision Maker. They may still say what you are intending is Deprivation of Capital, or they may agree that it's the sensible option for you to buy the home you are currently living in.

So far as you are concerned at the moment you will be refused ESA and other means tested benefits, so you really have nothing to lose by putting your situation in writing to them.

jlawrence

GirlFromMars wrote: »

Did you telephone or write?

You need a decision from a Decision Maker, not just whichever telephone operator you happen to get connected to. I had to do this when I wanted to buy a flat with my inheritance, and I was given a decision in writing that I would be allowed to buy a flat without it being considered DoC.

I think you need to lay out your whole situation in writing, and ask them in writing if you can pay off your mortgage early, and if that would be counted as Deprivation of Capital in your situation or not.

The only person who can decide if it's Deprivation of Capital is a Decision Maker. They may still say what you are intending is Deprivation of Capital, or they may agree that it's the sensible option for you to buy the home you are currently living in.

So far as you are concerned at the moment you will be refused ESA and other means tested benefits, so you really have nothing to lose by putting your situation in writing to them.

Thanks Girlfrom mars, it was a telephone conversation only. I first of all asked them if there was a way round it. Then I suggested that I could get rid of the capital by paying off the mortgage so leaving us with no savings and then being able to claim the maximum ESA. She said no you can't do that. I'll drop them a line as you suggest setting down what was said in the telephone call and asking if the operator was in fact right or wrong.

epitome

Girl From Mars is correct that the telephone people are not Decision Makers, they do not know all the fancy rules and loops that become a part of a deprivation of capital decision.

From my own understanding, DoC is when you use the money deliberately to become eligible for benefits. On the face of it the telephone people are correct to say if you pay off the mortgage purely to become eligible for benefits then that will be seen by DWP as DoC.

But there are other angles that we can observe here, If you pay off the mortgage as advised by your financial advisor *before* you claim income related benefits then you can argue when you finally do make the claim that you were not paying it off to become eligible for benefits but you were paying it off as advised by your IFA.

If you claim the benefits before paying the mortgage and you are then refused IR benefits. You are then stuffed, because if you now pay it off, it is clearly because you want to become eligible to the benefit and so it will be seen as DoC. However, if you have written advice from a IFA that this is the best thing you should do with your money, you could appeal the DWP decision and try to get the decision overturned. BUT would a *fully informed* IFA really advise this?..... knowing that you have no income, no entitlement to IR benefits and if you pay off the mortgage it could be seen by DWP as DoC and therefore leave you destitute.... I doubt a responsible IFA would give such written advice.

So we go back to the excellent point made in post #8
If you start withdrawing funds from your bank account, maybe the bank will have something to say about that, or maybe the IFA could genuinely give advice that living on your money will mean that you will lose your house in the long run,
so if you live off the money you will lose the house eventually.
and if you pay off the mortgage you will lose your ability to support yourself immediately....catch 22.

If it can be seen as vital that you pay off the mortgage then it may not be seen as DoC. This is definately an area to be explored.... possibly on appeal.

When did you get the compo? Was it more than a year ago?


What about your wife did she work in 11/12 and 12/13? earning £5,100 and £5,350 respectively in each year?

Why didn't you (both) claim ESA in 2013 ? if you had stopped working?

GirlFromMars_2

jlawrence wrote: »

Thanks Girlfrom mars, it was a telephone conversation only. I first of all asked them if there was a way round it. Then I suggested that I could get rid of the capital by paying off the mortgage so leaving us with no savings and then being able to claim the maximum ESA. She said no you can't do that. I'll drop them a line as you suggest setting down what was said in the telephone call and asking if the operator was in fact right or wrong.

I'm not sure it will go down too well if you ask for "a way round deprivation of capital", but it's definitely worth asking them to look at your situation and make a decision. You don't need to tell them you've already had a "no" from the DWP, as that wasn't a Decision Maker, and whoever gave you that no did not have all the information available to a Decision Maker.

Under most circumstances paying off a mortgage early is DoC, but your mortgage is different from a regular mortgage. Make sure you explain exactly what your mortgage entails, what interest payments will become due if you start eating away at the capital, and what the bank will say about the mortgage itself if you start eating away at the capital. It is possible given there is now so much equity in your property that the bank will have no qualms about you using the capital, as they will be able to recover the original £100K through the sale of your property.

Capital (cash) can be disregarded for 26? weeks if it is specifically set aside for the purpose of buying a property. In my case I was advised to put the money into a separate bank account so that they could easily see what my intentions were for the money (it went into my solicitor's account). It seems to me like your money already is in a specific account deliberately designed to buy your property, so you may fall under this rule.

Ultimately it doesn't sound like you will become homeless if you use this capital to live on as you seem to have a lot of equity in the property? Presumably you will just have to sell up and release the equity in your current property to buy a new smaller property?

Why did you choose an interest only mortgage in the first place instead of buying the property outright? If someone advised you that was the best course of action then you may have been woefully ill-advised.

Anyhow, write to the DWP, explain your circumstances, both health and money, and ask for a written decision about what you intend to do. The worst they can say is no, and you thought they said that already, so it can't hurt to ask the correct people!