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mabmab10

Hi
Need advice please!
My parents took out a mortgage about 10 years ago under the right to buy, and I helped them with the payments every month, sadly we lost my dad a few years after and now my mothers health is deteriorating.
We’re both now worried the government may claim her house if she goes into a home because of her health.
My main concern is the payments I have made were cash because of the legal terms under the right to buy terms and conditions.
Would everyone have any advice for us please.
Thanks
Mark

NYM

Read this article from Age.uk

https://www.ageuk.org.uk/information-advice/care/social-care-and-support-where-to-start/paying-for-care-support/do-i-have-to-sell-my-home-to-pay-for-care/


If your Mum is liable to pay, any payments you've made to your parents certainly won't count so it's unlikely that you'll get to keep the heavily discounted property. Look on it as you've been helping your parents with their financial commitments.

AnotherJoe

My sympathies regards your mother.

Am I correct in thinking that what you are saying is that the rules say that the person buying must be buying themselves and so you evaded those rules by paying in cash so there wasn't any way of tracing the fact they were evading these rules ?

Are you sure about that? In effect you were giving them additional money to help with their payments? Is that really against the rules? Maybe I'm wrong I'm not familiar with the exact details of RTB. Obviously they were buying it on behalf of themselves not you.

Unfortunately since you paid in cash to evade rules that may or may not be in place you've got no way to prove that what you were doing was not giving them money but instead a loan to your parents, if that was your intention. Presumably the longer term aim was for you to inherit.

To avoid the situation you outline, the usual advice is to create and document a loan to them so that you can retrieve your money when the house is sold, should that need occur. But it's too late for that now obviously. Otherwise everyone would just claim they lent their parents the money to buy and so the council can't get the money.

Other than that it seems you may hit one of the downsides of RTB, the risk that your purchase is lost when the house is sold to provide for care, statistically it's a low risk but it can happen. The other downside is the need to pay for significant repairs that are unaffordable.

It looks like you've been unlucky to hit the first of those risks and offhand I can't see any way round it. Happened to me with my mother we had to sell the flat to finance care. It wasn't RTB but that doesn't really make any difference.

Brock_and_Roll

From the local authority's perspective, it is a very simple case. There is an asset that can be used to fund care subject to the usual limits.


The OP should take comfort that he was able to assist the parents when they needed help.


If the mother lives a long and happy life in a care home for many years then that is obviously a good outcome. If alas her stay is much shorter then the OP is ultimately likely to benefit from the RTB discount which he has "enabled" through the cash payments.

mabmab10

Thanks for all the quick replies.
It was my intension to keep them safe in their home to stop the local council taking their house and putting them in somewhere smaller.
Under the RTB i was not legally allowed to help them in terms of the morgage so helped them with the repayments.
I'm now worried the money ive given to help is now lost.
Any advice on life time mortage route?
Is this an option?

AnotherJoe

mabmab10 wrote: »

Thanks for all the quick replies.
It was my intension to keep them safe in their home to stop the local council taking their house and putting them in somewhere smaller.
Under the RTB i was not legally allowed to help them in terms of the morgage so helped them with the repayments.
I'm now worried the money ive given to help is now lost.
Any advice on life time mortage route?
Is this an option?

Then you would appear to be in a Catch 22 and indeed the money may be lost. You cant really have it both ways.

A life time mortgage would be unlikely to help since the money your mother receives would be counted for care purposes and if she gave it away, lets say to you, that would be clear deprivation of assets. The only exception might be, if what she had and gave away was already under the limits. I think thats £16k. So suppose it is £16k, and suppose your mother has, say £5k in savings. She might be able then to take out a lifetime mortgage for £11k and give you that £11k or even the whole £16k since she is anyway under the £16k limit so there's no deprivation going on. IANAL though so dont know if the would work it just seems to me it ought to.

Brock_and_Roll

Agree. I think going through the lifetime mortgage route would be a waste of money (given the fees etc) given that the money received would represent a clear and easily spottable deprivation of assets if it were put out of reach of the LA.


Unlike the situation perhaps a decade ago, hard pressed local authorities are much sharper in this area now and are much better at going back through the records to spot potential deprivation of assets - and this would be a slam dunk.


As AnotherJoe puts it, it is a bit of a Catch22 situation and the money is potentially lost. Is it more than £16k? This level of savings is protected so you may ultimately you may get that back depending on the circumstances of her estate and beneficiaries.