Money from house sale and how long it should last

Grumpy_chap

andrewmp said:

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?

Is that a real of hypothetical question?
It is not clear who has all got ill and lost their jobs in the scenario.
Given the children have taken all the assets from the parents, thus leaving the parents destitute, one would like to think that the children would step in and see to it that their parents are well cared for. 
Then again, perhaps the children were not bought up that way, after all, the children were happy to take all their parent's money even though the parents were still very young.

Spoonie_Turtle

andrewmp said:

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?

Different situation when they didn't know they'd need to claim benefits in the near(ish) future.

Though regardless, it would be unwise to give all their money away and have no financial cushion.  One of the questions when determining whether something was DoC or not is 'what were they planning to live on afterwards?' and that would be relevant in your hypothetical situation for a couple so near to retirement age. 
One would assume they had substantially more than just the State Pension planned otherwise why give away all your money, especially if they're now having to rent??

That's not even touching on the considerations for if they need care in the future, considering most people do need some kind of care in their old age (realistically it's more a question of when than if).

TELLIT01

To me the whole thing here seems to about disposing of and/or concealing assets in order to make it easier to claim benefits in the future.  Whether that would simply be seen as Deprivation of Capital (the disposal of assets), or Fraud (hiding other assets) is possibly a question for the legal people at DWP.  Neither outcome would be good for the OP.

peteuk

For me, it’s not about claiming benefits, it’s about health and welfare.

The Op says there in good health, but regardless of their ability to be independent at present, if they have any illness or history of illness that may lead to them needing care, then giving the money away may well lead to DoC.

Op has said it was done to help out, but it has done so with a short sighted view.  Equally Op states council are aware… sorry to say they don’t care and aren’t as astute to work that jump out.  When you call and tell the council something they note it, action it and don’t worry about it, so the believe the council know what the couple has done is incorrect.

sheramber

I think the fact that money is invested in the daughter’s name tells its own story. 

_BOSS_

They were just trying to be prudent by putting the money in the daughters account. Having experienced probate it was thought to be the best move for the money. The pensioners do not need to claim benefits as they are well provided for and still in good health. 
 The main question is how long back do the authorities want to delve should a claim for council tax benefit or such like be actioned.

Murphybear

Grumpy_chap said:

_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?

You can be as fit as a flea and live in sheltered housing.  I live in sheltered housing, anyone over 55 can rent a place there.  

MeteredOut

_BOSS_ said:

They were just trying to be prudent by putting the money in the daughters account. Having experienced probate it was thought to be the best move for the money. The pensioners do not need to claim benefits as they are well provided for and still in good health. 
 The main question is how long back do the authorities want to delve should a claim for council tax benefit or such like be actioned.

Putting £40K in a daughters account (I assume this is what was meant by "keep 40k as a nest egg in a separate account not linked to either pensioner") and then claiming benefits based on having less than £16K is savings is not being prudent; it would be benefit fraud.

In your own words, the parents "bank accounts show very low savings" yet "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"

It's clear from your line of question that the parents realise they may not be able to afford the sheltered housing forever and are trying to hide their assets.

As others have said the local house "being aware of the sale" does not change anything if/when individuals are assessed for benefits or social care.

sheramber

_BOSS_ said:

They were just trying to be prudent by putting the money in the daughters account. Having experienced probate it was thought to be the best move for the money. The pensioners do not need to claim benefits as they are well provided for and still in good health. 
 The main question is how long back do the authorities want to delve should a claim for council tax benefit or such like be actioned.

But you are anticipating them claiming a benefit- council tax benefit

kaMelo

sheramber said:

But you are anticipating them claiming a benefit- council tax benefit

I was about to say the same thing as the OP's statement about having no need to claim benefits whilst enquiring about council tax reduction (a benefit) is contradictory.

 But in answer to this specific point;

_BOSS_ said: 

 The main question is how long back do the authorities want to delve should a claim for council tax benefit or such like be actioned.

They would want to go back as far as necessary to satisfy eligibility but there is no time limit on how far back they can look. Give they council are already aware of the house sale I would suggest they would at least go as far back as that and ask what happened to the proceeds of the sale.