Money from house sale and how long it should last

_BOSS_

 If a pensioner couple were to sell their property, move into sheltered accommodation (which they pay fully for) and give away most of the profit from their house sale to their children in order to help them in life.....the question is how long would the authorities expect this money to last?

As an example: Say the profit was £120k and they split this 3 ways. 40k per child and keep 40k as a nest egg in a separate account not linked to either pensioner.

 The local housing office were aware of the house sale 2 years ago when the pensioners ceased claiming housing benefit. I know they can have up to 16k as savings but their bank accounts show very low savings.
 Would this be an issue in the event of any potential future claim for housing or council tax benefit?

Thank you for any potential help.
 

MeteredOut

I appreciate you're asking about housing or council tax benefit, what if they need to move into social care due to health issues? Read into Deprivation of Assets. There is no limit as to how far back the council can "look back".

One example, but google for more:

https://www.careline.co.uk/deprivation-of-assets/

And how can they keep 40k in a nest egg in an account not linked to one of them and not have it included in the 16k check?

_BOSS_

I think deprivation of assets is when you knowingly get rid of your assets so as to avoid issues further down the road or any impending illness that might see you have to move into care.

 They are both currently in good health and gifted their money to their children so they could see them enjoy it whilst they are still around. There was no intention of hiding money whatsoever, they just wanted to help out one of their children who was struggling a bit and they had the means to do so.

 The money from the sale of the house was paid into their daughters account as a just in case thing so as to avoid probate etc should the worse happen so their finances do not show any large sums of money at all but the council are aware of a house sale 2 years ago.

Grumpy_chap

_BOSS_ said:

 If a pensioner couple were to sell their property, move into sheltered accommodation (which they pay fully for) and give away most of the profit from their house sale to their children in order to help them in life.....the question is how long would the authorities expect this money to last?

As an example: Say the profit was £120k and they split this 3 ways. 40k per child and keep 40k as a nest egg in a separate account not linked to either pensioner.

 The local housing office were aware of the house sale 2 years ago when the pensioners ceased claiming housing benefit. I know they can have up to 16k as savings but their bank accounts show very low savings.
 Would this be an issue in the event of any potential future claim for housing or council tax benefit?

Thank you for any potential help.
 

_BOSS_ said:

I think deprivation of assets is when you knowingly get rid of your assets so as to avoid issues further down the road or any impending illness that might see you have to move into care.

 They are both currently in good health and gifted their money to their children so they could see them enjoy it whilst they are still around. There was no intention of hiding money whatsoever, they just wanted to help out one of their children who was struggling a bit and they had the means to do so.

 The money from the sale of the house was paid into their daughters account as a just in case thing so as to avoid probate etc should the worse happen so their finances do not show any large sums of money at all but the council are aware of a house sale 2 years ago.

AIUI, deprivation of assets would be invoked here, both in relation to claiming means-tested benefits and in the event that future care is required.

The pensioner couple moving into sheltered accommodation are acknowledging some deterioration in their capabilities (hence the sheltered housing) and it seems entirely foreseeable, at that time, that future care needs might be required at a greater level than the sheltered housing.  To give away £80k from £120k of total assets is a significant proportion, given typical care home can exceed £1k per week.

What income does the couple have?

Spoonie_Turtle

_BOSS_ said:

I think deprivation of assets is when you knowingly get rid of your assets so as to avoid issues further down the road or any impending illness that might see you have to move into care.

 They are both currently in good health and gifted their money to their children so they could see them enjoy it whilst they are still around. There was no intention of hiding money whatsoever, they just wanted to help out one of their children who was struggling a bit and they had the means to do so.

 The money from the sale of the house was paid into their daughters account as a just in case thing so as to avoid probate etc should the worse happen so their finances do not show any large sums of money at all but the council are aware of a house sale 2 years ago.

But in your first post you said they ceased claiming HB upon the sale of their house.  That means Deprivation of Capital is very much in play, as they would have known the capital limit for claiming HB.  Even if it wasn't a main intention, it is highly likely to be determined that it was unreasonable to give their money away and expect to be able to claim again without living off the money they received.

Second bolded point, doesn't matter where the money actually is if it's theirs, it still counts.

Rubyroobs

If they know that they will need to claim help with rent once the money is gone then of course that is deprivation of assets. if they won't need to claim benefits then I guess it won't matter. regarding paying for care if neither of them have significant health issues now then it shouldn't matter.

Brie

Our LA were looking 5 years back into MiL selling her flat to help us buy a place for all 3 of us to live in.  That lasted for about 4 years but that wasn't sufficient time for the LA not to want to include a portion of the house that my OH & I had in our names only in her financial assessment.  And they didn't accept our reasoning that it was for her benefit for the years she lived with us.  They certainly won't accept someone giving money away to watch someone enjoy spending it.  

There's a big difference between giving someone £40k (x 3) as a lump as opposed to giving various members of the family a few hundred on birthdays or Christmas or graduation or whatever.  

Meanwhile I'm confused - how are they going to fund their ongoing costs of living?  £40k doesn't go very far at all if someone needs care - one person in care will be charged at least £1k a week and 2 together maybe a bit less than half that.  And that's with the council choosing the care home so nothing posh at all. 

Obviously you may be thinking that they will getting carers in but even that can be mighty costly.  Someone in 3-4 times a day to help get out of bed, make meals, get their tea, get them undressed and into bed - easily £100 a day.  MiL's carers cost £15 an hour plus £15 for each visit so it is likely cheaper to have someone there the entire day rather than coming and going.  So 1x3 hour visit cost £60 whereas 3x1 hour visits would have cost £90.  And this was a couple of years back.  

poppy12345

_BOSS_ said:

As an example: Say the profit was £120k and they split this 3 ways. 40k per child and keep 40k as a nest egg in a separate account not linked to either pensioner.

40k in a nest egg not linked to the pensioners? Yet you also say they had no intention of hiding money. If they have no money in their bank accounts now then they can ask the person they gave the 40k to for some of that money so they can pay their bills and continue to live. 

Placitasgirl

Deprivation of assets

You’re not allowed to intentionally reduce your assets or savings to increase the amount you get in benefits. The DWP calls this deprivation of assets.

Deprivation of assets can include:

• giving away money
• transferring ownership of a property
• buying possessions that are excluded from means testing, for example cars and jewellery.

If you've done any of these things before making a claim for benefits, the DWP will look at when you got rid of your savings and assets.

The DWP, or your local council, will look at the evidence to decide if they consider it to be deliberate.

If, at the time, you wouldn’t have been able to predict needing benefits, it might not count as deprivation of assets.

You might be asked to provide paperwork and receipts to back up the date, and the reasons for getting rid of savings or assets.

If it’s decided you have deliberately deprived yourself of savings or assets, you’ll be treated as if you still had them. This is called notional capital.

NedS

With notional capital they normally look at it on a monthly basis based on how much the claimant has deprived themselves and how much they could have expected to receive.

If, for example, a claimant was adjudged to have deprived them self of £100,000 and therefore considered to have £100,000 of notional capital, and could have otherwise expected to receive £1000 per month in benefit, then they would not be entitled to claim again for 100 months, or just over 8 years.

andrewmp

What would happen in reality in such circumstances. An couple (in their early 60s)  sell their house, gift for money to their kids who all buy houses with it and then have no money left. Then they get ill and lose their jobs and need to claim benefit but they're excluded. 

Would they just have to be homeless and starve?