Help / Advice needed on claiming pension credit with second property

mertywerty

Hi - I am in the process of helping my mum and dad look at applying for pension credits.

Thanks to this very very helpful site and links around here I have managed to find 99% of what I'm looking for before I help them make the application, but there is one big question mark which I am afraid will result in an application being rejected, regarding a second property.

I have been unable to find any concrete info around this so if anyone here the answer or had have experience with this situation and could share their knowledge / advice this would be really really appreciated!

My parents are both older than 65 and live in their own house with no mortgage, and do have savings over £6k. They are getting a combined pension of around £130 a week and the council tax for this property they are paying is around £40 a week. Aside from the pension they do not get any income at all from any other sources.

Based on these figures put into the handy calculator linked from this site (entitledto.co.uk) these figures make them eligible for pension credit.

However one thing I did omit and where my doubts are is that they also have a second property, a little retail shop that they used to work in before they retired. This property has been empty and vacant for over a year, and they have been trying to sell it via property agents for that period (but there is no interest due to the credit crisis, even with dropping the asking price dramatically). My mum and dad have to pay full council tax on this business property of £55 a week.

So the situation is that my parents receive £130 a week in total pension, but pay out total of £95 in council taxes, leaving them not much else to pay for utility bills, food, insurance, etc, which is why I am looking to apply to get pension credit for them.

The bit I need advice on is around the second property. In applying you obviously have to declare the business property, whose value is used as a basis to calculate a part of the weekly income, but it also sounds like the calculations do not take into account that the business property is empty and on the market to be sold. It seems to make the assumption that every couple of hundred of pounds of the property value equates to £1 in the stream of weekly income. So adding the value of the business property to the calculator makes my parents not eligible for pension credit due to this income assumption, when in reality they are actually losing money due to having to paying council tax / insurance etc on this property.

So my question is if anyone knows how this empty business property would get treated in a real pension credit application, and if there is anything my parents could declare etc in the application to remove the assumption that just because they have this second property it is automatically included in the weekly income calculations?

Any advice at all on this would be really really appreciated!!

CIS

has he tried to apply for small rates relief on the business property - there may be some sort of reduction available. They should contact their local Council's Non Domestic Rates dept to enquire.

Have they tried applying for Council Tax benefit ?

mertywerty

Hi CIS - thanks for the reply. I've had a look at the council's relief criteria on business rates and they don't qualify as the small business property is not the place of their main occupancy and it exceeds the rateable value ( around £2000) allowed for additional properties.

Also for council credit relief I think the same problem exists in that you have to declare the second property which will probably treated in the same way as the pension credit calculation (judging by the application form).

They used to be eligible for empty business property relief, but this was abolished by the government with effect from April 2008.

Getting back to the pension credit question is there anyway I can find out about the question of how an empty business property with full business rates payable, is treated in the calculations for pension credit relief?

Many Thanks

dmg24

Hi mertywerty,

Welcome to MSE.

I'm afraid that I don't know the answer, but it may be worth having a look at the Silver Savers board, to see if anybody else has been in the same situation?

If not, I would make a call to the pension credit team to get a definitive answer. If you do, would it be possible to update us please, as it is always good to update our knowledge! x

mertywerty

Thanks dmg24. Not sure if the rules allow me to repost this on the silver savers board but I'll have a look at it.

Also if I find out the answer I'll be sure to report it here

dmg24

If you want to search Silver Savers first, you may find the answer without needing to post. If you go on to the board, then click on 'Search this Forum' this will enable you to search just the posts on that board.

You are fine to repost, it just becomes a problem when people post all over the place without thinking about it first! x

bigbill

I can see no reason why it would not be disregarded for up to 6 months or longer as long as steps are being taken to sell it or its up for sale.

mertywerty

Hi - I reposted this thread on the "Silver Savers" board (pls see link at bottom of this post), and will continue with on that thread. There's some very useful information on there for anyone else with second properties who want to see if they can claim for pension credit.

My parents have now made an application, so will update the progress on the other thread.

Also for people that didn't know - if you apply for pension credit and get accepted - you automatically qualify for council tax credit as well and this is supposedly all handled for you. If you get rejected for pension credit then you will have to apply separately for council tax credit.

Thanks again

http://forums.moneysavingexpert.com/showthread.html?t=936841&highlight=pension+credit+second+property