ESA, DLA & Ill health retirement pension

tealtastic

pmlindyloo wrote: »

I will try and help

Thank you very much :beer: You have been really helpful.

tealtastic

Indie_Kid wrote: »

Isn't that only income based? I seem to remember there's an £85 a per week disregard for pension if on contributions based benefits and then for every £1 over, 50p is deducted.

I am on income based ESA. My income went from £50k to zero once my sick pay ran out.

tealtastic

BigAunty wrote: »

The Shelter website has excellent information for homeowners at risk of arrears and repossession.

You are correct that if you leave a property when you had no need to, you can be deemed as making yourself intentionally homeless but this is complex (at least in England anyway, not sure about rules in Scotland and in NI, the rules are again very different and much more generous as the council will house those who struggle to afford rent or mortgage payments).

It is still worth double checking your rights with Shelter under homeless legislation regarding voluntary repossession (simply giving up the property) or if the council could classify you as 'intentionally homeless' when it is clear that you simply cannot afford the property.

Or book an appointment with the council homelessness department showing evidence of your finances that indicate repossession is inevitable and see if they can act at all (usually they won't act until tenure of accommodation is actually at threat in the next 28 days, the law doesn't require them to be particularly proactive). Not sure they will do much, though.

At some stage, x years down the line when your mortgage term expires, the lender will expect you to pay the capital but if you have no realistic prospect of returning back to employment, the lender won't extend the term. When the term expires, you face repossession of the property because the balance of the capital is due but if you are only paying the interest on it (are you, or is the mortgage on a repayment basis?).

Note the risks and issues that come from voluntary repossession - the capital you owe does not magically disappear the moment you post the keys back to the lender. They may sell it cheap at auction and then come after you as a debtor for any negative equity, sales/legal fees, repairs, insurance etc). Read about this on the Shelter website.

You've pitched it as a solution but remember that while you have 50% equity on the normal market, repossessions often get sold off on the cheap and the owner can be deducted steep costs, including the remaining mortgage payments until sold. Could be the start of a new nightmare. Do you have any other debts?

Do some research on the general allocation policies of local social housing landlords (housing associations, the council, etc).

Some bar home owners from applying for housing on their general lists (you've investigated the emergency homeless route but haven't mentioned general waiting list/choice based bidding allocations).

Others will accept homeowners on their general lists and may take into account disabilities/health issues when allocating the priority. You will simply need to check on a case by case (landlord by social housing landlord) basis if they will accept you despite owning a home. For example, I recall a thread on the social housing forum where an overcrowded home owner got a social housing tenancy.

I understand the Mortgage Rescue scheme closed within the last year (in England anyway, you'd need to check the position if you live elsewhere). Worth keeping your eyes open in case it reappears. This is where homeowners with dependents or disabilities at risk of repossession used to be able to sell the property to a local social housing landlord and continue to live in the property as a tenant. Did noone suggest this to you before the scheme closed in the spring? Perhaps it wasn't available to shared ownership people, don't know really.

Sorry need to clarify: I am not facing repossession at the moment. I will be in very, very hot water if my benefits are stopped but right now, my mortgage company is happy as DWP pays interest and I pay the repayment bit out of my ESA etc. I have not missed a single payment.

I owe just over £80k on a mortgage. I have made just over £2k in overpayments, which would give me about 6 mths' wriggle room on mortgage repayments if I really needed it.

The equity in the house, after paying back the mortgage is about £90-100k. However, the house needs work doing to it before it can be sold.

I did ring Shelter for advice a couple of years ago, but they said Shared Ownership was completely outside their area of expertise. It's a bit of a black hole as far as advice on legislation/entitlements etc goes. I have had real battles just to get help keeping up with the rent, service charge & mortgage interest.

When I was very ill in hospital a couple of years ago my mother tried to get the Housing Association to agree to buy back my share in the property and allow me to rent the property from them. They basically laughed in our faces. That is a no-go. It was at that point that I took advice on handing in the keys and was told I absolutely cannot do that (CAB). I also contacted a several local housing associations who specialise in mental health and was told they could not help for the reasons outlined in my OP.

I don't have any debts apart from £500 on a credit card. I did have a lot of debt as when I was really ill I didn't really know what was going on and lost all control of my affairs inc finances, but it has all been sorted out now (hence no savings and a bad credit record).

Molly41

DLA is not means tested.
ESA contribution not means tested but pension contributions are taken into consideration when calculating amount.

tealtastic

GirlFromMars wrote: »

As has already been said, Capital from the sale of a home can be disregarded for 26 weeks (or longer if appropriate) so long as you can prove you are using the money to buy somewhere else. If you sell/buy as part of a chain this wouldn't even be necessary, or were you planning on selling first then buying somewhere else later?

You should write to the DWP to let them know what you are intending to do, so that a Decision Maker can okay it in advance.

Are you planning on using the pension lump sum to add to your housing fund?

Is your ESA wholly Income based? I'm assuming you had contributions from before you became ill, so I'm assuming a fair portion is contribution based, which would continue even with a large sum of capital. DLA isn't means tested so would continue as well.

There are a number of different Shared Ownership housing schemes, it may be worth looking into a more affordable scheme and a more affordable home if you cannot buy outright.

Thank you, that was really helpful and informative :beer:

I will have to use every penny I have to get out of here. Won't be going on any holidays or buying sports cars lol.

The house is not in the best condition now as since I stopped work I have had no money to repair it. The built in cooker, oven and extractor have all been broken for 3 years & although I bought replacements, I have had no money to pay someone to install them so they are all sitting in my room three years on. At least two of the electric heaters are broken as well, possibly three (I didn't put the heating on last year at all so unsure). Two of the kitchen doors have fallen off and are beyond salvaging so that needs sorting too. So if possible, if the DWP would allow me to use a small amount of the money to repair the essentials that would help, as I doubt anyone apart from an investor would buy like this.

The rest will have to go towards a new property. I think I have about £100k in equity once the mortgage is paid back but that won't be buy very much in the South East so I would need to put the lump sum towards the property pot too.

BigAunty

tealtastic wrote: »

I did ring Shelter for advice a couple of years ago, but they said Shared Ownership was completely outside their area of expertise. It's a bit of a black hole as far as advice on legislation/entitlements etc goes. I have had real battles just to get help keeping up with the rent, service charge & mortgage interest.

When I was very ill in hospital a couple of years ago my mother tried to get the Housing Association to agree to buy back my share in the property and allow me to rent the property from them. They basically laughed in our faces. That is a no-go.


When I was very ill in hospital a couple of years ago my mother tried to get the Housing Association to agree to buy back my share in the property and allow me to rent the property from them. They basically laughed in our faces. That is a no-go.

Might be worth asking on the house buying/selling/renting board on MSE for your current options and whether SO properties were excluded from the MR scheme though it could descend into its usual contradictory arguments, and also on the Landlordzone website which tends to have social housing staff, housing solicitors and experienced landlords as members.

I don't know much at all about the ex Mortgage Rescue scheme in England, how it operated but that ship has now sailed.

It's not clear to me how formal an approach this was by your mother or just an informal enquiry, whether housing associations could opt out or if the property had to be bought by the existing social housing landlord or could be bought by others or the council, if it excluded SO properties, etc, for example.

I would have recommended at the time that you escalate this to your MP to let them know how ill served you were, to report to them how you have been excluded from a scheme designed to prevent homelessness in vulnerable homeowners. Also, to research and go through the HAs complaints policy, perhaps the HA ombudsman complaints procedure depending on how the scheme was supposed to operate.

Do you not get your service charges at least partly paid by Housing Benefit or does the home ownership share complicate things or some of the charges you face are excluded from HB?

tealtastic wrote: »

I also contacted a several local housing associations who specialise in mental health and was told they could not help for the reasons outlined in my OP.

I don't know what you mean by this. I asked you whether you are excluded from applying for social housing as a general applicant due to your home ownership and your historic post seems to relate to whether you would receive social housing by voluntary repossession under homelessness legislation (though maybe I misunderstand).

Just to confirm - all your local social housing landlords have told you that they will not accept a general housing waiting list application from you because of your current homeowning tenure (even though you have health issues and can't afford the mortgage)?

Social housing landlords in England do have a degree of discretion in who they allow to apply for social housing and for obvious reasons, they aren't keen on homeowners. Some have blanket bans, others will accept applications.

tealtastic wrote: »

However, the house needs work doing to it before it can be sold.

What type of work is this? Is there any potential to sell it in its current state with the valuation taking into account its condition? Does your local area have good turnover of sales (the housing forum sometimes gets reports that some SO properties are hard to shift, not really popular with new buyers or the HA is awkward and this deters sales).

EDIT - sorry, cross posted on the work required on the property.

BigAunty

tealtastic wrote: »

The house is not in the best condition now as since I stopped work I have had no money to repair it. The built in cooker, oven and extractor have all been broken for 3 years & although I bought replacements, I have had no money to pay someone to install them so they are all sitting in my room three years on. At least two of the electric heaters are broken as well, possibly three (I didn't put the heating on last year at all so unsure). Two of the kitchen doors have fallen off and are beyond salvaging so that needs sorting too. So if possible, if the DWP would allow me to use a small amount of the money to repair the essentials that would help, as I doubt anyone apart from an investor would buy like this.

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To other posters - the crisis/loan schemes have changed over the last few years for benefit claimants, with the odd one ported from the DWP to the local council.

Can anyone define the potential loan that the OP could get and where to apply for it?

Otherwise, I would suggest joining a credit union and enquiring about the likelihood of getting a loan from them. They are designed for low income applicants.

BigAunty

To the OP - my mention of the historic Mortgage Rescue scheme was perhaps a deadend anyway due to your property being shared ownership but you possibly could have reduced your share back then.

Some information about SO here at the bottom of the page

Assisting shared owners at risk of repossession

Shared owners are not eligible for assistance under the Mortgage Rescue Scheme, but may be able to get assistance where they are at risk of repossession through flexible tenure, which allows shared owners to reduce the size of their owned share. Further advice is available in our publication Assisting shared owners at risk of repossession: Flexible tenure.

http://www.homesandcommunities.co.uk/mortgage_rescue_guidance

But that's hindsight for you.

pmlindyloo

tealtastic wrote: »

Thank you, that was really helpful and informative :beer:

I will have to use every penny I have to get out of here. Won't be going on any holidays or buying sports cars lol.

The house is not in the best condition now as since I stopped work I have had no money to repair it. The built in cooker, oven and extractor have all been broken for 3 years & although I bought replacements, I have had no money to pay someone to install them so they are all sitting in my room three years on. At least two of the electric heaters are broken as well, possibly three (I didn't put the heating on last year at all so unsure). Two of the kitchen doors have fallen off and are beyond salvaging so that needs sorting too. So if possible, if the DWP would allow me to use a small amount of the money to repair the essentials that would help, as I doubt anyone apart from an investor would buy like this.

The rest will have to go towards a new property. I think I have about £100k in equity once the mortgage is paid back but that won't be buy very much in the South East so I would need to put the lump sum towards the property pot too.

Using the pension lump sum to carry out the necessary repairs would, I feel, be perfectly reasonable.

Keep all the receipts in case you have to provide evidence of what you have spent the money on.

Be sure to update the DWP of everything - when you get the lump sum, the weekly pension etc etc. If you can take the evidence(bank statement/paper work about the pensions) into the Job Centre Plus yourself then they will photocopy them and give a receipt. keep the receipt somewhere safe as this is your evidence that you told them of your change of circumstances. At the same time ask them about spending some money on essential repairs and whether this would be seen as deprivation of capital. Ask them to put their answer in writing.

All may seem like overkill but you may need evidence that you did everything 'by the book'.

tealtastic

BigAunty wrote: »

Might be worth asking on the house buying/selling/renting board on MSE for your current options and whether SO properties were excluded from the MR scheme though it could descend into its usual contradictory arguments, and also on the Landlordzone website which tends to have social housing staff, housing solicitors and experienced landlords as members.

I don't know much at all about the ex Mortgage Rescue scheme in England, how it operated but that ship has now sailed.

It's not clear to me how formal an approach this was by your mother or just an informal enquiry, whether housing associations could opt out or if the property had to be bought by the existing social housing landlord or could be bought by others or the council, if it excluded SO properties, etc, for example....




Just to confirm - all your local social housing landlords have told you that they will not accept a general housing waiting list application from you because of your current homeowning tenure (even though you have health issues and can't afford the mortgage)?
EDIT - sorry, cross posted on the work required on the property.

Social housing where I live is managed by the local authority unless it's a special scheme like the one I mentioned for mental health patients. The LA turned me down flat out on the grounds that I do not meet their criteria for rehousing (as I already have a home) and said if I hand the keys in I'm making myself voluntarily homeless. I was told that I would have to wait until a repossession order goes through and the bailiffs turn up. I cannot go through that with my mental health as fragile as it is, it would literally kill me.

That is when I contacted all the local HAs to find out re schemes outside of the general list. I would be eligible for mental health housing IF I did not already have a home, which I do so they said they couldn't help and referred me back to the council.

I'm not eligible for any of it.

Re my own Housing Association. I have received no support/advice at all from them: they are not interested. My mum wrote to them requesting that I be allowed to staircase downwards (she is authorised to speak to them on my behalf this as my main carer). She sent them evidence from my CMHT and even went to a meeting with a senior official from the HA to discuss it. He basically told her that the HA will get its money regardless of whether or not I keep the house as there is so much equity in it that if it's repossessed they won't lose anything, so why on earth would they buy my share. That is how helpful they were. As I said, that is a no-go.