Gifted Property Whilst On PIP and Support Group ESA

muldesia

Hi All,

My brother is on PIP and Support Group ESA benefits due to mental illness. He's currently living with my mum, but he's 40 years old now, and he'd like to try to live in a flat by himself.  My mum is considering selling her house and buying him a flat with the proceeds.

I've done some research, but just wanted to confirm with anyone here that might know : If my mum were to buy a flat for him, and put it in his name, would it affect his entitlement to either PIP or Support Group ESA?  He needs the benefits since he cannot work.

Many thanks!

born_again

PIP is not means tested so that is no issue.

ESA, someone will be along to advise

HillStreetBlues

muldesia said:

Hi All,

My brother is on PIP and Support Group ESA benefits due to mental illness. He's currently living with my mum, but he's 40 years old now, and he'd like to try to live in a flat by himself.  My mum is considering selling her house and buying him a flat with the proceeds.

I've done some research, but just wanted to confirm with anyone here that might know : If my mum were to buy a flat for him, and put it in his name, would it affect his entitlement to either PIP or Support Group ESA?  He needs the benefits since he cannot work.

Many thanks!

PIP  no effect as not income based. If ESA is income based then capital does effect that (the group he is in has no bearing).

HillStreetBlues

The actual buying of flat is fine, nothing wrong with that.
If it's income based then the issue becomes how it's bought. If funds are transferred to your brother then this should be declared. If your mother can pay directly then nothing needs to be declared, apart from change of address for your brother.
If it's the former, the best way to retain all income related benefit if for your mother to declare the money as a Quistclose trust. That means he can only use that money to buy the property. so although the money is in his account, he has no beneficial interest in it. 

sheramber

Where will your mother live after she sells her house?

elsien

You also need to consider the ongoing service charges, maintenance, costs et cetera and whether he will be able to afford this from benefits.
He will then have the issue that if he can’t manage to live on his own, and the flat is in his name, it will count as an asset for benefits purposes if he has to then live somewhere  somewhere else. That money could then have to be used for him to live on until it gets down to the benefits thresholds. 

If there is a reasonable amount of doubt about his ability to manage, I do think he should seriously consider renting first if he is able to find a property that will accept him. 

This would seem to be a case of hope for the best but plan for the other scenarios as well. 

muldesia

HillStreetBlues said:

The actual buying of flat is fine, nothing wrong with that.
If it's income based then the issue becomes how it's bought. If funds are transferred to your brother then this should be declared. If your mother can pay directly then nothing needs to be declared, apart from change of address for your brother.
If it's the former, the best way to retain all income related benefit if for your mother to declare the money as a Quistclose trust. That means he can only use that money to buy the property. so although the money is in his account, he has no beneficial interest in it. 

The plan is for my mum to sell her place, and buy him a property outright for him with the proceeds of the sale of her property, and put the property in his name.  I believe she avoids the additional property stamp duty by doing this, since the property is for him and not for her.  My mum would also buy herself a flat with the proceeds of the sale of her current place.

So just to confirm, are you saying that PIP and ESA are unaffected by by brother owning the property?

Many thanks for your help!

muldesia

sheramber said:

Where will your mother live after she sells her house?

She'll buy herself a new place too, nearby.

Thanks!

HillStreetBlues

muldesia said:

So just to confirm, are you saying that PIP and ESA are unaffected by by brother owning the property?

Many thanks for your help!

Owning would have no affect on either ESA or PIP.

muldesia

elsien said:

You also need to consider the ongoing service charges, maintenance, costs et cetera and whether he will be able to afford this from benefits.
He will then have the issue that if he can’t manage to live on his own, and the flat is in his name, it will count as an asset for benefits purposes if he has to then live somewhere  somewhere else. That money could then have to be used for him to live on until it gets down to the benefits thresholds. 

If there is a reasonable amount of doubt about his ability to manage, I do think he should seriously consider renting first if he is able to find a property that will accept him. 

This would seem to be a case of hope for the best but plan for the other scenarios as well. 

That's a very good point.  There's not a lot of money to go around, so not sure how feasible it is to pay out rent for a while - his PIP and ESA benefits certainly wouldn't allow him to afford it

But I take on board what you say about how if he moves away from the place he's bought, perhaps back with my mum, that property will now be viewed as an asset my brother holds, and that could affect his benefits.  Do you know if that situation would affect either PIP or ESA?

Many thanks for the help!

Spoonie_Turtle

muldesia said:

elsien said:

You also need to consider the ongoing service charges, maintenance, costs et cetera and whether he will be able to afford this from benefits.
He will then have the issue that if he can’t manage to live on his own, and the flat is in his name, it will count as an asset for benefits purposes if he has to then live somewhere  somewhere else. That money could then have to be used for him to live on until it gets down to the benefits thresholds. 

If there is a reasonable amount of doubt about his ability to manage, I do think he should seriously consider renting first if he is able to find a property that will accept him. 

This would seem to be a case of hope for the best but plan for the other scenarios as well. 

That's a very good point.  There's not a lot of money to go around, so not sure how feasible it is to pay out rent for a while - his PIP and ESA benefits certainly wouldn't allow him to afford it

But I take on board what you say about how if he moves away from the place he's bought, perhaps back with my mum, that property will now be viewed as an asset my brother holds, and that could affect his benefits.  Do you know if that situation would affect either PIP or ESA?

Many thanks for the help!

Depends on what type of ESA he claims.

Forget PIP, it's not affected by anything financial at all.