Dad selling his house and claiming housing benefit for alternative accommodation.

kratosthegreat

My Dad has a mortgage but lost his job and became sick, and could not keep up the payments. I took over the payments with the house and mortgage still in his name. I do not live with him by the way.

He moved out, and lived temporarily in a care home, and now he is in some other accommodation for which he needs to claim benefits to pay. There is of course the problem that he has assets in the mortgage, so we need to sell the house and of course, the profits (if any) from the sale would have to be used before claiming housing benefits. There is the £6000-£16000 savings allowance too.

What I would like to know is if it is possible for me to buy the house at the value equal to the remainder on the mortgage? So if the remainder is £30 000, for example, could me and my Dad agree that the house is worth £30 000 and I purchase it for this amount? The reason for this is so that my Dad would not have made any profit on the sale, so he would be entitled to full housing benefit but are we also avoiding deprivation of assets? Are we allowed to put that valuation on it ourselves and agree the deal between us or would we need an official valuation to avoid a case of deprivation of assets?

HappyMJ

Benefits board would probably better suit this question but as you say deprivation of capital would come into play.

You can buy it for whatever amount you both feel is an equitable amount to pay but if the council thinks you are paying amounts under the table so to speak so your dad can claim full housing benefit and also has a regular sum coming from you then it's not just deprivation it could also be considered fraud.

Why not pay the market value for the property less 10% for a reasonable discount for not using an agency to sell the property. They don't mind you using 10% it's a reasonable figure. You don't need an official valuation just a few figures from agencies will do and use the lowest one.

If he moves he can use the money he's gained to pay for legal costs and new furniture in the property he moves to (keep all receipts) which will help in reducing his capital below £6,000.

If you've made payments on the mortgage then you should have some written agreement so your money is repaid. You could create a written agreement now retrospectively as long as you have proof you actually made the payments on his behalf. Bank statements for instance.

kratosthegreat

HappyMJ wrote: »

Benefits board would probably better suit this question but as you say deprivation of capital would come into play.

You can buy it for whatever amount you both feel is an equitable amount to pay but if the council thinks you are paying amounts under the table so to speak so your dad can claim full housing benefit and also has a regular sum coming from you then it's not just deprivation it could also be considered fraud.

Why not pay the market value for the property less 10% for a reasonable discount for not using an agency to sell the property. They don't mind you using 10% it's a reasonable figure. You don't need an official valuation just a few figures from agencies will do and use the lowest one.

If he moves he can use the money he's gained to pay for legal costs and new furniture in the property he moves to (keep all receipts) which will help in reducing his capital below £6,000.

If you've made payments on the mortgage then you should have some written agreement so your money is repaid. You could create a written agreement now retrospectively as long as you have proof you actually made the payments on his behalf. Bank statements for instance.

Thanks, this is very useful. Well there is about £27500 left on the mortgage and we think the house could be worth between £50 000-£60 000 - it hasn't been maintained for many years and needs a lot doing to it. The 10% discount idea sounds good.

When you say he has regular amounts coming from me do you mean the mortgage payments? I'm only paying these until we sell the house or until I buy it so the house doesn't get re-possessed. He's not receiving anything else from me.

Thrugelmir

kratosthegreat wrote: »

Are we allowed to put that valuation on it ourselves and agree the deal between us or would we need an official valuation to avoid a case of deprivation of assets?

The answer to your question is obvious. As parties in any such situation would work it to their advantage. You'll be party to the transaction. Which of course would mean that that your name could be tainted too.

meacynic?

I know of one couple who sold their home, bought a motorhome with the proceeds and toured Europe for a year;

When they returned they had no savings and no assetts - motorhomes don't count - so they now live in nicer house than the one they left, paid for by my taxes, and they go on holiday whenever they want in a very nice motorhome.

If you Dad needs to be cared for, then do it, but if it's just a way of getting free housing, then to me, it's morally wrong.