Pension credit entitlement

door123

I have a question for a struggling friend.

Purchased house jointly with son in 2007 with a 20 year interest only mortgage and a 6 year fixed rate deal. He did not contribute towards the mortgage or the maintenance of the property the son did. In 2013 the mortgage deal come to a end and the interest rate went up so it was time to remortgage to a better deal. The issue was that no lender will accept them as the the father was to old to be accepted for a mortgage. The father and son were both stuck with the current lender on a interest only mortgage and 14 years remaining on the mortgage. They were advised by mortgage adviser that after 14 years remaining on the mortgage the house will be reopossessed as the the mortgage term will finish the existing provider will not give you more term years and a new provider will not accept you.

The mortgage advisor said the way forward is to do a transfer of equity the father transferred the whole property into the sons name in 2013 no money was exchanged and the father got nothing and did not want anything as had not contributed to the towards the house. After the transfer of equity the son was accepted by a new lender on a repayment mortgage and the father still remaind in the property and still is.

At the time of the transfer of equity the father was getting pension credit which DWP stopped and he only gets state pension.

The question is that no money was transferred exchanged to the father at the transfer of equity. Also this was 11 years ago will the father be entitled to Pension Credit now? Surely it can't be disregard forever?

Thanks

Rubyroobs

He gave away half the house which presumably had significant equity ? There is no limit on the length of time they can go back if they suspect deprivation of assets. I'm sure the pension credit form asks whether you have owned property although I may be getting confused with another form.

door123

Rubyroobs said:

He gave away half the house which presumably had significant equity ? There is no limit on the length of time they can go back if they suspect deprivation of assets. I'm sure the pension credit form asks whether you have owned property although I may be getting confused with another form.

Yes there was a significant amount of equity. 

Newcad

As I see it the DWP wiil do a calculation on the lines of-

What was the value given away, (that's called 'notional capital') and could he have been expected to have used that notional capital up on reasonable living expenses by now?

That's not simple of course, particularly a number of years on.

The only way to find out for sure is to apply for Pension Credit and see what the DWP say.