Benefits and Equity Release Help Please

jacquij123

Hello,
I hope someone is able to help with this or point me in the right direction. My parents currently live together in a house that they own outright. They are doing this for convenience as they are no longer together as a couple. My Dad gets Pension Credit and Housing Benefit for the rent he pays my mum. My mum is still working full time although as she is 65 she also receives her state pension which is not much.
Right, that's the situation now for the query....
There is approximately £250,000 equity in the house, some of which my mum would like to release. This would be for her own use, nothing to do with my dad but obviously he would need to agree to it. If she did this:

1) Would my dad loose his Pension Credit or housing benefit even though he would not get any of the money.

2) Can anyone see any potential pitfalls in doing this.

Thank-you to anyone that ca help with this.

poppyscorner

Do both of them still live in the house or not ?

I am by no means an expert but I did not think you could claim HB to pay to a relative I am not certain on that so feel free to correct me anyone.

If they are still together why does he have to pay mum rent to live in a house that he has most likely contributed to paying for?

If they do in fact live together I think it may have implications on your dad but probably not your mum

Kimitatsu

As HB is a means tested benefit you cannot release the equity and still claim the benefit. Also if he is trying to claim HB and PC as both are means tested he could fall under the deprivation of capital rules if he releases the equity and continues to live in the house.

Contact your local CAB and they will be able to advise you on the options which are open to them, as there are differing rules once you get over 65 and different allowances.

jacquij123

Thank-youfor replying,
They both live in the same house but not as 'man and wife'. Housing Benefit and Pension Credit were both happy with the situation. I think it's something to do with the fact that he has not been around for big chunks of time and my mum has supported herself.
I thought that as they were individuals, ie her income is not taken into account for his benefit she would be able to release some equity in her own right. He wouldn't be getting the money.

fos

Sounds like they are on a good thing and milking the system , so i would leave well alone.Just how does your father manage to get housing benefit for living in his own house ??. The mind boggles. No wonder genuine cases have problems getting their just benefits

diddlydum

The council will have examined it, and he is entitled to it if he can show it's a genuine tenancy (which he obviously has done).

My understanding is that equity release acts as capital.

jacquij123

Quite offended by post #5, the application was done properly and the council were happy with the situation. He hadn't been living in the house for many years, if he moved somewhere else they would have to pay out a lot more than they are.
Anyway thanks for those that have contributed, looks like I'll have to look elsewhere for a definitve.