Theoretical Question re selling a house and benefits

happyandcontented

TELLIT01 wrote: »

It's not just cans of worms which are being opened up but whole mountains of the things. Defining a temporary move to live with the mother is difficult. DWP may accept that view or may say they consider it permanent after an extended period. That decision can't be made if her appointee hasn't informed DWP of her current situation.

If she is on ESA plus whatever benefits pay for running the house which she still pays for, then why would staying temporarily with her mum affect that? She is still sick and still paying to run her house.

happyandcontented

Sunny_Intervals wrote: »

The value of the home you own is ignored in means-testing as long as you're living in it or are only living away from it temporarily. If she was living somewhere else permanently, it would then be counted as an asset for means-testing purposes and she'd lose income-based benefits. The fact that she's planning to sell it/give it away/rent it out is a pretty huge hint that this isn't temporary.

To be fair, she did intend to go back, but I think she has now got used to living with her mum and her illness means that she struggles to do things on her own and it is a big step for her to go back to living alone. Too big a step it would seem.

happyandcontented

TELLIT01 wrote: »

It's not just cans of worms which are being opened up but whole mountains of the things. Defining a temporary move to live with the mother is difficult. DWP may accept that view or may say they consider it permanent after an extended period. That decision can't be made if her appointee hasn't informed DWP of her current situation.

Is there a specific period after which it is deemed to be a permanent change of residence?

TELLIT01

happyandcontented wrote: »

Is there a specific period after which it is deemed to be a permanent change of residence?

I don't know. I suspect it will be for a Decision Maker to make the determination based on many factors, not least of which would be the likelihood of a return to the original home. If she is considering selling / giving away, the initial supposition is likely to be that there are no plans to return.

happyandcontented

TELLIT01 wrote: »

I don't know. I suspect it will be for a Decision Maker to make the determination based on many factors, not least of which would be the likelihood of a return to the original home. If she is considering selling / giving away, the initial supposition is likely to be that there are no plans to return.

I think the benefits question is clouding her judgment. It has always been at the forefront of her thinking.

Up to now she has been asked by her mother what her intentions are and always replied that she doesn't know. Her mother has pointed out that by not making a decision she is still effectively making one, that of staying where she is.

This line of questioning seems to be what has brought about the suggestion of selling to her family at a nominal fee. It has been said that from an insurance perspective and a bill paying perspective she needs to decide what she wants to do.

Then there is the inheritance question as, if she gives up her assets she cannot buy out her sister when her mum dies but would have nowhere else to go. Her mother wanted the other sister to get the inheritance solely and then drip feed distribute it to the sister on benefits so that no benefits were lost....but the other sister doesn't like the tax implications of that nor does her husband, but currently, that is apparently how the will stands.

They were quite open about it all when I visited, but I think they did take onboard my points which hopefully they will think deeply about to avoid a real mess.

TELLIT01

With every new piece of information the situation gets worse. If the mother doesn't trust the daughter to use the money wisely it needs to go into a formal trust of some kind. It's not fair on the other daughter to expect her to manage the finances for the rest of her life. What would happen if the other daughter died......

Afraid_of_Kittens

happyandcontented wrote: »

Is there a specific period after which it is deemed to be a permanent change of residence?

In the back of my mind I can see the legislation about being temporarily absent to receive care elsewhere but this is time restricted I think to 52 weeks (I think) but the permanent change of residence is when she decides she isn't going to return to her former home.

Danday

Afraid_of_Kittens wrote: »

The mother will be classed as depriving herself of an asset for benefits purpose.
.

With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
So how can she be said to be depriving herself of capital for benefit purposes if she sells it for £1?
I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.

TELLIT01

Danday wrote: »

With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
So how can she be said to be depriving herself of capital for benefit purposes if she sells it for £1?
I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.

It's the daughter's house, not the mother's. The daughter has moved in with her mother. The daughter is claiming Income Related benefits so if she effectively gives assets away with the intention of being able to continue claiming benefits it is almost certainly going to be classed as Deprivation of Capital. There is a big difference between reducing the price of a property in order to obtain a quick sale, and giving it away.

Afraid_of_Kittens

Danday wrote: »

With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
So how can she be said to be depriving herself of capital for benefit purposes if she sells it for £1?
I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.

She has left the property to live with her mother - it is an unoccupied former home. For benefit purposes it is classed as capital.

She wants to give it away - this is deprivation of capital.



Deprivation of capital
77. Claimants may knowingly deprive themselves of capital in order to be
eligible for benefit, or a higher award of JSA. This is known as
deprivation of capital and, if proved, the capital in question is treated as
notional capital.
78. A claimant can deprive themselves of capital by:
 giving it away to another person
 buying personal possessions
 paying debts before the agreed date
 paying more than the amount due on a debt
 paying back a debt that is not a legal debt, capable of enforcement
 spending it extravagantly, even if the claimant says they have used it to
pay for the necessities of life.

Examples of capital
9. Capital can include:
 savings for example, a bank or building society account, current or
savings/deposit accounts or cash
 investments, for example, Premium Bonds, stocks and shares or
insurance policies
 real property or in Scotland heritable property, that is land and anything
that has its foundations in the land such as a house
 a beneficial interest in the capital of a trust.
Note: this list is not exhaustive
10. Capital can also include property and assets, such as:
 premises;
 land;
 buildings:
 domestic;
 business;
 plant;
 machinery;
 investments;
 rights to capital;
 shares;
 timeshares;
 other items, for example, boats and jewellery.