Can we buy parents house outright then let them live in it?

Tiglet

Also I don't think they'll pay HB if the landlord is a family member. Otherwise everyone would do this sort of thing.

jetplane

You can have housing benefit if you rent from a family member and it is possible to have HB for a house you owned but criteria has to be met and in this case I doubt either would apply.

jellie

TheSilentMeow wrote: »

particularly ones who love to pretend that they don't do all they can to help their offspring, which is all my MIL wanted to do. She's not an idiot, she's actually a very bright woman, who wants to help us, and her grandchildren, while she is alive.

If you can't afford to do up your own home without your MIL's money, you could sell your inherited property?

TheSilentMeow wrote: »

I have inherited my fathers property which is worth significantly more.

frugalsmurf

Not intended as a put down or negative.

But Why not just pay her money to get rid of the mortgage.

You seem keen to show your plan is to help her, but the sticking point personally came when you said she'll spend it on your property, but then said it's her money to spend how she wishes?

If she is bad with money, why give her a lump sum to waste then regret when she's on a pension with no equity or house to fall back on.

She won't get benefits for various reasons,
1-it was her house.
2 -she's seen to have 35k.
3-you're related but you are the land lords.

Help her by all means, just don't buy her only asset as you're not helping her.

Person_one

TheSilentMeow wrote: »

She's not an idiot, she's actually a very bright woman, who wants to help us, and her grandchildren, while she is alive.

Sometimes, no matter how much somebody wants to sacrifice their own security and future to help you, the right thing to do is to not let them!

missbiggles1

jetplane wrote: »

You can have housing benefit if you rent from a family member and it is possible to have HB for a house you owned but criteria has to be met and in this case I doubt either would apply.

Only in certain very limited circumstances - I agree with you, unlikely to be met here.


"3 Housing Benefit aims to provide help with the rent a person has to pay on their home. However, in certain specified situations housing benefit will not be paid even though a person has to pay rent. One of those situations is where they once owned the home they live in, either as a freeholder or leaseholder, and now rent and where they sold that home within five years of claiming Housing Benefit (“the Former Owner Rule”).
4 The Former Owner Rule will not apply where they can satisfy the local authority processing their Housing Benefit claim that they could not have stayed living in their home without selling it. They do not need to show that it was completely impossible to keep their home, but they do need to show a degree of difficulty that, while falling short of impossibility, still amounted to practical compulsion."

Housing Benefit and Council Tax Benefit Circular
Department for Work and Pensions
1st Floor, Caxton House, Tothill Street, London SW1H 9NA
HB/CTB A5/2009
ADJUDICATION AND OPERATIONS CIRCULAR
WHO SHOULD READ
All Housing Benefit (HB) and Council Tax Benefit (CTB) staff
ACTION
For information
SUBJECT
Sale and rent back arrangements
Guidance Manual
The information in this circular does not affect the content of the HB/CTB Guidance Manual.
Queries
If you
want extra copies of this circular/copies of previous circulars, they can be found on the website at https://www.dwp.gov.uk/housingbenefit/user-communications/circulars
have any queries about the
- technical content of this circular, contact Dave Jones
Email: dave.jones@dwp.gsi.gov.uk
- distribution of this circular, contact Corporate Document Services Ltd Orderline
Email: orderline@cds.co.uk

Crown Copyright 2009
Recipients may freely reproduce this circular.


HB/CTB Circular A5/2009

Contents
para
Sale and Rent back arrangements
Introduction 1
Guidance on sale and rent back arrangements Appendix A
Copy of letter: Advice for homeowners Appendix B
(also sent as separate pdf file)
Copy of leaflet: Advice for Homeowners Appendix C
(also sent as separate pdf file)



Adjudication and Operations circular
March 2009
HB/CTB Circular A5/2009

Sale and rent back arrangements
1 Following the publication in October last year of the Office of Fair Trading's (OFT) research report on the sale and rent back industry, the Government included in its response the commitment that the DWP would draw together existing guidance for the benefit of consumer bodies and those thinking about entering into a sale and rent back arrangement.
2 The attached guidance and covering letter to advisers has been produced in response to that commitment and seeks to clarify the impact of entering into a sale and rent back agreement on a person's eligibility to Housing Benefit. It is in a format that can be copied and handed to those thinking about entering into a sale and rent back arrangement, whether or not they have any immediate intention of claiming benefit.
3 The guidance has been circulated to relevant organisations and some of those who had responded to the OFT consultation to get the guidance to where it is most needed. Because of the low numbers likely to be affected we are not proposing to publish this guidance in hardcopy, but circulated the guidance electronically asking that it be copied as widely as possible.
4 It is therefore copied to you for information but we would also be grateful for your assistance in distributing this electronic copy of the guidance as widely as possible particularly to those involved in money advice, or who have any other interest, in your area.

Adjudication and Operations circular
March 2009
HB/CTB Circular A5/2009
Appendix A
Guidance on sale and rent back arrangements
If a person is thinking about selling their home and renting it from the new owner and expects Housing Benefit to help with the rent
1 We have been increasingly concerned to hear of cases where people who have sold their homes and rented it back have been refused Housing Benefit. In the Office of Fair Trading’s recent market study of the sale and rent back industry it was recommended that DWP should provide greater clarity on the eligibility of sale and rent back tenants for Housing Benefit.
2 Where a person is genuinely unable to remain in their home without selling and renting it back, help is available with the rent charged through Housing Benefit. However we would strongly recommend that those thinking of entering into a sale and rent back arrangement should first ask their local authority for advice or speak to independent money advisers such as the Citizen’s Advice Bureau.
Help from Housing Benefit for those who used to own their homes
3 Housing Benefit aims to provide help with the rent a person has to pay on their home. However, in certain specified situations housing benefit will not be paid even though a person has to pay rent. One of those situations is where they once owned the home they live in, either as a freeholder or leaseholder, and now rent and where they sold that home within five years of claiming Housing Benefit (“the Former Owner Rule”).
4 The Former Owner Rule will not apply where they can satisfy the local authority processing their Housing Benefit claim that they could not have stayed living in their home without selling it. They do not need to show that it was completely impossible to keep their home, but they do need to show a degree of difficulty that, while falling short of impossibility, still amounted to practical compulsion.
Did a person have to sell their home?
5 This is quite a difficult test to satisfy. The onus is on them to explain their reasons for giving up ownership as well as providing evidence of the situation they were in that lead to the sale of their home, such as letters from the lender about action to be taken over arrears etc.
6 The local authority has to reach a decision based on the specific facts of each case and must apply the test to the particular circumstances. In general, a person’s own beliefs and perceptions as to whether they could have avoided selling their home are not really relevant. Consequently, if they thought that in their particular circumstances they had no other option but to sell so as to remain living in their home, but in actual fact there were other feasible options available that they had not considered, then the Former Owner Rule would still apply.
Adjudication and Operations circular
March 2009
HB/CTB Circular A5/2009
Appendix A
7 In reaching a decision, the local authority may take into account the fact that
benefits such as Income Support, Jobseekers Allowance, Employment and Support Allowance and State Pension Credit, can help with homeowners’ housing costs, including mortgage interest payments
only the recovery of debts secured on the home rather than unsecured debts are likely to lead to repossession
What happens if they didn’t have to sell their home?
8 Where the local authority decides that they could have continued living in the property without giving up their ownership, the Housing Benefit claim will be turned down. Whilst each case will be decided on its particular facts, the following are examples of situations where Housing Benefit has been denied. In each case the crucial point was that there were alternative options to sale available – that is, they could have kept ownership of the property and continued living in it. The situations include selling the property and renting it back
following the signing over of the home to relatives, both where a payment was made for the property and where one was not, but where it was thought that there was no compulsion on the person to do so
to claim Housing Benefit to avoid claiming the help available with housing costs through Income Support, Jobseekers Allowance, Employment and Support Allowance or State Pension Credit
to lower the person’s outgoings so that they could be a student where the housing costs were paid up to date
to use the equity released to clear other unsecured debts such as credit card and gambling debts
How does the equity they had in their home affect Housing Benefit?
9 Where the local authority is satisfied that a person had to sell their home the next factor to consider is that there are also rules concerning the amount of savings or capital that a person has that affect entitlement to Housing Benefit. By “capital” we mean savings and assets in whatever form, for example money held in a bank or building society account, Premium Bonds, National Savings Certificates, stocks and shares and property. There are lower capital limits above which housing benefit is reduced and upper limits above which benefit cannot be paid. The value of most forms of capital is counted for benefits purposes; although, some forms of capital are ignored.
10 Another relevant capital calculation rule provides that a person shall be treated as possessing capital of which they have deprived them self for the purpose of securing entitlement to housing benefit. In the context of sale and rent back situations, this rule means that the local authority has to consider whether they sold their home (i.e. deprived them self of their capital) to become entitled to Housing Benefit.
11 The local authority must consider each case on its individual facts. Unlike the Former Owner Rule, their beliefs and perceptions are the key here. The local authority must be satisfied that their actual, subjective purpose was to sell their home in order to become entitled to Housing Benefit. "

Adjudication and Operations circular
March 2009
HB/CTB Circular A5/2009
Appendix A

Dan-Dan

OP wont read all that,after all they know it all already

freeisgood

Buy a house worth 70K for 45K......AND get 35K "cashback" ...AND get rental money every month. Very nice! :P

jetplane

missbiggles1 wrote: »

Only in certain very limited circumstances - I agree with you, unlikely to be met here.

I know, and I only said this

jetplane wrote: »

You can have housing benefit if you rent from a family member and it is possible to have HB for a house you owned but criteria has to be met and in this case I doubt either would apply.

to clarify this

missbiggles1 wrote: »

Not that much of an expert - you can't get HB for a property you've previously owned.:p

csgohan4

Deprivation of assets to me


http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/