Pension Credit - Housing Costs

billywolf

My mother-in-law lives in a static park home which she owns outright. She pays a monthly pitch fee which I have read is treated as ground rent for Pension Credit purposes, which in turn the Pension Service take into account as a Housing Cost when they calculate eligibility for Pension Credit. In my m-i-l’s case, if they took this into account she would qualify for the Savings Credit element of Pension Credit - without it she won’t because her pension income exceeds the limit for payment. I have just been informed in a strange telephone conversation with the Pension Service that because her park home agreement Is covered by the Mobile Homes Act (which gives owners of park homes statutory rights and regulates pitch fees) they will not take these fees into account. This sounds bizarre to me. I have researched on the net about this, but can find no guidance to establish whether this is correct. Has anyone else encountered this issue or can give advice on whether this is correct please?

calcotti

Detailed Pension Credit guide here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/898908/pc10s-a-detailed-guide-to-pension-credit-for-advisers.pdf
I suspect the reason the costs you refer to cannot be included for Pension Credit is that they can be covered by Housing Benefit.

billywolf

Thanks for your help Calcotti. We have looked at Housing Benefit. We have been advised that as my m-i-law owns her park home, she cannot claim for this. Pitch fees do not count as rentals for this purpose. I can’t see anything in the guidance that specifically refers to park home pitch fees. I can see that pitch fees for tents and mobile motor homes are allowable so it seems odd to me park home pitch fees are not. Have I missed anything here?

xylophone

I can see that pitch fees for tents and mobile motor homes are allowable so it seems odd to me park home pitch fees are not. 

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

Ground rent and other housing costs

You can get help with other housing costs through PC including:

•   ground rent if you have a lease of more than 21 years

•   payments under a co-ownership scheme

•   rent if you are a Crown tenant (minus any water charges)

•   payments for a tent and its pitch, if that is your home.

Re savings credit https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-and-benefits/pension-credit-aj4ck5n7vl9q

calcotti

Shelter says the pitch fee can be covered by Housing Benefit. If this is correct it cannot be covered by Pension Credit.
https://england.shelter.org.uk/housing_advice/benefits/housing_benefit_for_mobile_homes

You can claim universal credit or housing benefit to help pay site fees if you own your mobile home. This can cover your pitch fees and maintenance charges.

calcotti

Now found this in Housing Benefit manual - but don't think it makes me any the wiser.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/236953/hbgm-a4-eligible-rent.pdf

Site rent for a caravan or mobile home

4.110  Site rent for a caravan or mobile home is eligible for HB when it is used as the home

• unless paid under a long lease, see Long leaseholders later in this chapter (HB Reg 12 & (SPC) 12)

•   even if the caravan or mobile home is owned by the claimant

Long leaseholders

4.260 Periodic payments under a long tenancy are not eligible for HB, except for payments under a shared ownership tenancy or lease, see Shared ownership schemes earlier in this chapter.

calcotti

xylophone said:

I can see that pitch fees for tents and mobile motor homes are allowable so it seems odd to me park home pitch fees are not. 

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

Ground rent and other housing costs

You can get help with other housing costs through PC including:

•   ground rent if you have a lease of more than 21 years

•   payments under a co-ownership scheme

•   rent if you are a Crown tenant (minus any water charges)

•   payments for a tent and its pitch, if that is your home.

Re savings credit https://www.which.co.uk/money/pensions-and-retirement/state-pension/your-state-pension-and-benefits/pension-credit-aj4ck5n7vl9q

Putting the its of information together I think the key issue may be the length of the lease. From the bit in the Housing Benefit manual  appears that the pitch fee can be covered by HB unless it is a long lease. If it isn't covered by HB then out can be covered by PC. Presumably the reference to 21 years in the bit you quoted is the definition of a long lease.

Pension Credit guidance I referenced earlier says https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/898908/pc10s-a-detailed-guide-to-pension-credit-for-advisers.pdf

The extra amount for housing costs

The extra amount for housing costs is for those costs not covered by the Housing Benefit scheme. Housing Benefit payments are from the local council to help towards rent or the cost of living in a hotel, guest house, hostel or somewhere similar.

The extra amount for housing costs does not cover Council Tax liabilities. Fees from the local council associated with Council Tax reduction payments are not classed as Pension Credit housing costs.

The housing costs that can be covered by extra amounts are:

• ground rents relating to a long tenancy

• some service charges

• co-ownership and Crown tenancy charges

• charges for tents and site rents

• rentcharge payments

billywolf

Calcotti/Xylophone - thanks very much for your help. 

To clarify, for mobile home owners there is an indefinite right to remain on a site under the Mobile Homes Act (subject to certain terms and conditions). I guess one issue here is whether this is regarded as a lease. If it was, it clearly passes the over 21 years hurdle. However, the Shelter advice is interesting in that it appears to say that help for pitch fees is covered by Housing Benefit. This is also stated in guidance on the nhas.org website (can’t post link as not allowed to by forum rules!). 

I think I have read somewhere that housing costs taken into account for HB cannot be taken into account for PC purposes - which may or may not be right. But if it is, then this could be why the Pension Service rejected the PC claim.

HB is administered by the Local Authority and I am already in correspondence with them over Council Tax Reduction. Interestingly, you apply for CTR on the same form as HB. If the pitch fee is regarded as rent then she will qualify for a small amount of HB. So I am now going to ask the LA the question and see what answer I get!

What a minefield this is! I would prefer m-i-l to qualify for PC rather than HB because this opens doors to other things (like a free TV licence). Occurs to me that there must be thousands of people living in park homes facing these issues. Will keep this thread posted on how this unfolds. 

calcotti

billywolf said: I think I have read somewhere that housing costs taken into account for HB cannot be taken into account for PC purposes

That's exactly the point I was trying to make in my first reply and has been reinforced from my reading of the documents referenced.

billywolf said: So I am now going to ask the LA the question and see what answer I get!

That seems to be the way forward. If they say no then you'll have to have another go at PC. 

My instinct is that HB will cover it in which case PC cannot.

billywolf

You are right Calcotti. I had been given advice to the contrary but shouldn’t have doubted you! 

calcotti

billywolf said:

You are right Calcotti. I had been given advice to the contrary but shouldn’t have doubted you! 

You have every right to doubt me. It’s not something I have ever come across so I am only going by what I have managed to find online.