Housing Benefit after Right to Buy

leveller2911

Dvalin wrote: »

I'm really just looking for advice, from experts if there are any. We may move out, we may sort things out, we may sell the house and split the money.

If you sell within 5 years you may well have to pay back the discount or at least a sizeable portion of it.If you sell it where would your mother live?.

Sorry to say this is yet another reason why RTB should have never been implemented....Or as suggested its a wind up....;) I'm def thinking its a Troll at work.

Housing_Benefit_Officer

Dvalin wrote: »

If we were to buy her share of the house and give her say £40k and if she were to move out and privately rent would she become entitled to HB once her savings fall below the threshold?

We would first establish the legal share of the ownership of the house at the time of purchase. We would then establish the current market value. To calculate her capital in the property we would take current market value, minus 10% to cover selling costs and then divide amongst owners. If her share was £75k and you gave her just £40k we would treat her as having £75k capital.

I assume your Mother was on the mortgage agreement?

Housing_Benefit_Officer

jetplane wrote: »

HBO would you be classing her as having the whole property because the value would need to be split, minus selling costs therefore if the mother lived alone, was in receipt of Attendance Allowance and no one claimed carers allowance for looking after her, with a basic state pension and £40k notional income (OP's estimate) she would receive guaranteed pension credit and could be passported to Housing and Council Tax benefit.

A few ifs but perfectly possible.

One would assume if she qualified for Pension Credit she would be claiming it now.

jetplane

^^ she may well be, but she won't have the 40k capital at the moment and may assume that it is not possible to get HB with more than 16k savings

PlymouthMaid

It seems to me that it would be terribly unfair for your Mother to have to move out and rent privately as it is generally more expensive, she will end up in a much smaller home and may have landlord problems or have to keep moving.. If anybody moves out it should be you and your wife. You will no doubt still benefit one day from the fact that the council house was purchased.

Dvalin

Housing_Benefit_Officer wrote: »

We would first establish the legal share of the ownership of the house at the time of purchase. We would then establish the current market value. To calculate her capital in the property we would take current market value, minus 10% to cover selling costs and then divide amongst owners. If her share was £75k and you gave her just £40k we would treat her as having £75k capital.

I assume your Mother was on the mortgage agreement?

There was no mortgage, we were able to buy the house after the sale of our old house outright. But we bought the house as joint applicants.

One thing I wonder is how one goes about spending or reducing capital that is notional. I mean if you treat her as having £75k but she only has £40k how does she spend that 35K difference? How can she prove she no longer has what she never had to begin with?

Thank you for your help btw, you have cleared up things for me.

BigAunty

Dvalin wrote: »

One thing I wonder is how one goes about spending or reducing capital that is notional. I mean if you treat her as having £75k but she only has £40k how does she spend that 35K difference? How can she prove she no longer has what she never had to begin with?

.

What you seem to have outlined as a contradiction or issue, is in fact the concept of notional capital - treating the claimant as if they still have the capital even if they've given it away! She doesn't need to prove she no longer has it, she is treated as if she still does....

See if you can find the DWP decision makers guides on deprivation of capital and notional capital. These are staff guides, manuals which help them identify deprivation and make calculations based on notional capital. It might make clearer to you the complex sums they undertake to ensure that the claimant is treated as if they have the original capital, not on the capital they really now have, how they apply the deductions.

They process the calculation based on how long the notional capital should take to erode, not on their actual spending (since they have been deemed to have intentionally deprived themselves of their capital so their actual balance is irrelevant). Staff will work out what the claimant should have been entitled to, if they hadn't have squandered their capital, then work back from the sum of capital they ought to have.

They are a very complex and dry read, though they do provide simple example cases to guide staff. I doubt that you (or any of the posters here) can easily or accurately estimate her notional capital and the type/degree of benefit reduction she will experience, how it will specifically be applied.

GirlFromMars_2

Dvalin wrote: »

We bought my mother's house under the right to buy scheme, myself and my wife as joint applicants. We have been living together over a year but my wife and my mother have fallen out. If my mother transferred her share in the house to us could she then claim housing benefit on another place? Or would this be considered deprivation of capital?

Your Mother cannot give you her share of the house, so please get that out of your head.

Are you or your partner disabled or incapacitated?

If your mother is of pension credit age (I'm not sure how old that is) and you were to move out of the house and allow your mother to live there then your share of the house would be disregarded for benefit purposes.

These are the Deprivation of Capital rules.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236960/hbgm-bw1-assessment-of-capital.pdf

I think you need to stop thinking of this house as yours because you put up the cash. Your mum is the one with the discount that enabled you to buy the house, and is thus perfectly entitled to her share.

PasturesNew

The decent thing to do would be to leave her in the house, the whole house, to live in for as long as she desires..... and for you to leave and make your own arrangements.

lighting_up_the_chalice

Dvalin wrote: »

One thing I wonder is how one goes about spending or reducing capital that is notional. I mean if you treat her as having £75k but she only has £40k how does she spend that 35K difference? How can she prove she no longer has what she never had to begin with?

They work on the assumption that you are a decent human being who wouldn't stiff your own mother for £35k.