Gifted Property Whilst On PIP and Support Group ESA

Alice_Holt

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account. 

OP - see this for info on savings and means tested benefits.
https://www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

So (if I'm correct in this assumption) both PIP and ESA are unaffected by becoming an owner of the property he lives in.

Once in the flat, he should claim Council Tax reduction from his local council.

I'd be more concerned about the costs of running the property including service charges. However once migrated to Universal Credit (from April for a claimant over 25 - c.£810 pm in the LCWRA / Support Group), it may be possible to cover some service charges by way of the housing element. 
 Note UC is likely to be more than he receives with ESA.

 https://england.shelter.org.uk/housing_advice/council_housing_association/service_charges#:~:text=Back to top-,Can benefits pay the service charge?,of lifts and rubbish collection

HillStreetBlues

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account.

Can this be done? would money laundering checks prevent this?

Alice_Holt

HillStreetBlues said:

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account.

Can this be done? would money laundering checks prevent this?

      OP wrote "My mum is considering selling her house and buying him a flat with [some of] the proceeds."

  I can't see how this could be seen as money laundering -  can you explain how it might?

 

HillStreetBlues

Alice_Holt said:

HillStreetBlues said:

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account.

Can this be done? would money laundering checks prevent this?

      OP wrote "My mum is considering selling her house and buying him a flat with [some of] the proceeds."

  I can't see how this could be seen as money laundering -  can you explain how it might?

 

I'm not sure of the rules, but can the mother go though the money laundering checks that need to happen, when it's not her that will own the property?
The bother can't go though those checks has he isn't the one with the money.

Alice_Holt

HillStreetBlues said:

Alice_Holt said:

HillStreetBlues said:

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account.

Can this be done? would money laundering checks prevent this?

      OP wrote "My mum is considering selling her house and buying him a flat with [some of] the proceeds."

  I can't see how this could be seen as money laundering -  can you explain how it might?

 

I'm not sure of the rules, but can the mother go though the money laundering checks that need to happen, when it's not her that will own the property?

        Yes.

        It's the source of funds that is important  -  https://www.propertymark.co.uk/professional-standards/consumer-guides/buying-selling-houses/aml-proof-of-funds.html

     More to the point - The OP and his mother should be aware that gifting some of her house proceeds is likely to impact on any potential help with future care costs.

Bigwheels1111

Would it be more beneficial all round if Mum became his landlord.
Then left him the house in her will.

I was going to rent my house to the person I care for. I owned the house.
Then they were going to claim HB for us both ie 2 bedrooms LHA allowance.
Went to the local council to check this was all legal and above board.
They said it would be fine and even showed me in the book of rules where and what code applies.
Works out cheaper for them.
Adaptions were too expensive so gave up on the idea.

Spoonie_Turtle

Bigwheels1111 said:

Would it be more beneficial all round if Mum became his landlord.
Then left him the house in her will.

I was going to rent my house to the person I care for. I owned the house.
Then they were going to claim HB for us both ie 2 bedrooms LHA allowance.
Went to the local council to check this was all legal and above board.
They said it would be fine and even showed me in the book of rules where and what code applies.
Works out cheaper for them.
Adaptions were too expensive so gave up on the idea.

There might be legal responsibilities with that.

(Just as you mention renting out: for clarity he wouldn't get any rent help as it would be a contrived tenancy, but seeing as she is already intending to buy it for him then presumably she wouldn't need to charge him rent anyway.)

muldesia

Spoonie_Turtle said:

muldesia said:

Spoonie_Turtle said:

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.

This is a 'Support Group' ESA.  There's no expectation that he'll be able to work in the future.

Do you know if that type of ESA would be affected should he move back with my mum, and has that property in his name?

Many thanks!

That's not a type of ESA (although understandable that you wouldn't know that!). 

The type is whether it's new-style, income-based, the old contributions-based, or a mix of income and contributions-based.  When did he start his ESA claim, what year?

I asked him and he wasn't entirely sure.  Since around 2010-2012 he thinks.

muldesia

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account. 

OP - see this for info on savings and means tested benefits.
https://www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

So (if I'm correct in this assumption) both PIP and ESA are unaffected by becoming an owner of the property he lives in.

Once in the flat, he should claim Council Tax reduction from his local council.

I'd be more concerned about the costs of running the property including service charges. However once migrated to Universal Credit (from April for a claimant over 25 - c.£810 pm in the LCWRA / Support Group), it may be possible to cover some service charges by way of the housing element. 
 Note UC is likely to be more than he receives with ESA.

 https://england.shelter.org.uk/housing_advice/council_housing_association/service_charges#:~:text=Back to top-,Can benefits pay the service charge?,of lifts and rubbish collection

Thank you, that's some great links there!

muldesia

Alice_Holt said:

HillStreetBlues said:

Alice_Holt said:

HillStreetBlues said:

Alice_Holt said:

I can't see a problem even if the ESA is income related (or partly income related) because (as I read the OP) the flat will be bought for him without any monies moving into his account.

Can this be done? would money laundering checks prevent this?

      OP wrote "My mum is considering selling her house and buying him a flat with [some of] the proceeds."

  I can't see how this could be seen as money laundering -  can you explain how it might?

 

I'm not sure of the rules, but can the mother go though the money laundering checks that need to happen, when it's not her that will own the property?

        Yes.

        It's the source of funds that is important  -  https://www.propertymark.co.uk/professional-standards/consumer-guides/buying-selling-houses/aml-proof-of-funds.html

     More to the point - The OP and his mother should be aware that gifting some of her house proceeds is likely to impact on any potential help with future care costs.

Regarding it impacting on future care costs, I'm assuming you mean deprivation of assets when it comes to nursing home fees?  I thought that was a case-by-case decision made by the council... I'm hoping the council won't see it like that given my brother's status.  It should hopefully be obvious she's not selling her home just to avoid any nursing home fees.