Pension Credit and 2nd Home

zoxsa

Hello,

I desperately need some advice.

My parents purchased a house in London in 1974. They lived in it until 2000.
They rented it out.

In around 2003, they added my name to the house. My father is receiving pension credits. I do not know since when. Let's say since 2008.. We discovered this by luck when doing the paper work for him in around 2017.. .

My mother, in 2016 passed away, and we were obliged to take over her duties in all the paper work to help my dad who is disabled. It was when we received the letter to update his status for pension credits that we discovered that there could be an issue. We had NO idea on how pension credits work and have discovered that you cannot claim Pension Credits whilst having a second home.

We wrote to the DWP immediately and told them the situation. We said we'd like to pay anything we owe, and begged them to stop paying my father pension credits as his name was STILL on a house; albeit 50% owner.

They ignored our letter and still continued to pay pension credits to him.

After more than 1 year, they replied and asked us for information on our 2nd home.

The rental income from this home goes to provide my dad a full time carer that we are not getting any help with.

I fear that we they will ask us to sell our home to repay them for anything.

If I were to remove my dad from the title deeds, that would incur a CGT to pay on the property, but would that limit the DWP from seizing our property or using it to gain their money back?

I'd like to pay them back and help my dad, but I'm really worried. He really needs the income from the house. The pension credits he gets is very small.

Am I making a fuss over nothing? Did I misunderstand anything about having a second home and receiving pension credits?

If I leave my dad on the title deeds for the 2nd home, would that not be a risk for us as the DWP could force the sale of the property.

I'm really concerned and I have no where to turn to.

Can anyone help?

Thanks
Zoxa

Mojisola

zoxsa wrote: »

My father is receiving pension credits. I do not know since when.

People receiving PC would often have an AIP (Assessed Income Period) during which their savings/capital could go over £10,000 without it affecting their benefits.

Check with the DWP whether he has/had one.

zoxsa

Hi
His savings are not over 10K. I doubt that they were ever over 10K.
Can you explain to me this rule about the 10K? Are you saying that if his savings are above 10K then they look at his 2nd property?

But ultimately - can a person have a 2nd home and receive pension credits?

Thanks for your reply!

Mojisola

zoxsa wrote: »

Hi
His savings are not over 10K. I doubt that they were ever over 10K.
Can you explain to me this rule about the 10K? Are you saying that if his savings are above 10K then they look at his 2nd property?

But ultimately - can a person have a 2nd home and receive pension credits?

Thanks for your reply!

The value of the second property would be counted as capital and added to any other savings he had.

He wouldn't have been entitled to claim PC after he bought the second home but, if he was already claiming it and then bought the second property, that may be covered by an AIP.

zoxsa

Well, my father did retire early, most likely when he was still in the house in London. So most likely he received it whilst living in the 1st house in London.

So, if he was already receiving it before the house was rented and his savings never went above 10K, it means we are OK? Worrying about nothing?

The rental income is going to me (I own 50%). But I'm using that income to pay for a carer. We are not claiming for a carer. We are simply trying to be self sufficient as possible.

Thank you so much for your reply.

Mojisola

zoxsa wrote: »

Well, my father did retire early, most likely when he was still in the house in London. So most likely he received it whilst living in the 1st house in London.

So, if he was already receiving it before the house was rented and his savings never went above 10K, it means we are OK? Worrying about nothing?

Only if he has an AIP.

If you can't find the information in his paperwork, phone the DWP and ask.

As you are new to benefits, it would be worth getting a meeting with AgeUK or CAB or similar.

xylophone

In around 2003, they added my name to the house.

They made you a gift of an interest in a property that was no longer their Principal Private Residence - presumably they checked whether there were any CGT implications?

Are you and he declaring your shares of the rental income to HMRC?

If I were to remove my dad from the title deeds

Your father owns 50% of the property? You cannot simply remove him from the deeds.

If he gave you his share there could be CGT considerations for him and in addition he would be depriving himself of an asset.

You should make an appointment with CAB for advice.

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

https://www.entitledto.co.uk/help/assessed-income-period

Did your father have an AIP?

zoxsa

Hello

Yes, there is CGT to pay if we take my dad off the house - but the idea is to avoid any problems with the DWP.

We are currently being assessed. My assumptions are that If it surfaces that he has been receiving Pension Credits incorrectly and is asked to repay it, having his name on a house in central London could be a bargaining chip by the DWP to get him to sell it or whatever.

They'd tell him: you own a house - please pay us back - you can remortgage your house.

Is it wiser to take his name OFF the house and simply pay the CGT (get peace of mind)?

What are the dangers (in terms of our house) if he has been deemed to have incorrectly received Pension Credits and he has a house to his name (albeit 50%). ??

Id like to pay the the DWP on my terms - not being forced to sell our home that is STILL being used to support my dad with a carer!!

I really need advice on this part.

Thanks

zoxsa

Thank you all so much for your replies.

Is it wiser to take my dad off the title deeds of the 2nd house? if he's being investigated and the investigation is against us - having such a large asset in his name could be dangerous. we could be forced to sell it.

He really needs the rental income from it.

Thanks

zoxsa

you mention:

"Your father owns 50% of the property? You cannot simply remove him from the deeds."

Why not? What is wrong with that? Perhaps I need to get a remortgage and a condition is to remove him from the deeds anyway? Yes, there maybe CGT to pay, but if his name being on the house is a liability, then what is stopping us from taking it off?? He's totally OK with anything we decide.

We are taking care of him.

THanks

poppy12345

zoxsa wrote: »

Thank you all so much for your replies.

Is it wiser to take my dad off the title deeds of the 2nd house? if he's being investigated and the investigation is against us - having such a large asset in his name could be dangerous. we could be forced to sell it.

He really needs the rental income from it.

Thanks

As stated in post #7 that can be classed as deprivation of capital.