Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • happyandcontented
    • By happyandcontented 15th Sep 18, 5:42 PM
    • 1,393Posts
    • 2,641Thanks
    happyandcontented
    Theoretical Question re selling a house and benefits
    • #1
    • 15th Sep 18, 5:42 PM
    Theoretical Question re selling a house and benefits 15th Sep 18 at 5:42 PM
    I visited an old friend today who has been on benefits for many years due to mental health issues. Currently, she is living with her mother but still has her own property.

    Her plan is to sell the house to her daughter and son in law for 1, let them rent it out and give her the money. This will enable her to stay on benefits.....to say I was gobsmacked is an understatement!

    I outlined the issues that could arise from: the couple splitting up, the possible benefit fraud, the lack of capital in old age for nursing care etc, etc. She thinks the plan is foolproof!

    Is it possible to sell a house for such a sum?
    Would it be seen as deprivation of capital?
    How could they find out?

    Any other comments?
Page 2
    • Sunny Intervals
    • By Sunny Intervals 15th Sep 18, 8:05 PM
    • 205 Posts
    • 651 Thanks
    Sunny Intervals
    I don' think she is aware of how the DSS operate on a daily basis.

    I don't believe this is a result of her illness, more of her belief that she has to have these benefits because that is the status quo.

    It wasn't her idea it was her son in laws....but she sees it as the way forward. Her 83-year-old mother is her appointee. Her mothers' estate is a whole other can of worms just waiting to be opened.
    Originally posted by happyandcontented

    The fact that she has an appointee would suggest she does have trouble handling money because of her illness.


    I agree with AoK, the daughter and son-in-law may be taking advantage and someone needs to step in to protect your friend's interests.
    • happyandcontented
    • By happyandcontented 15th Sep 18, 8:26 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    The fact that she has an appointee would suggest she does have trouble handling money because of her illness.


    I agree with AoK, the daughter and son-in-law may be taking advantage and someone needs to step in to protect your friend's interests.
    Originally posted by Sunny Intervals
    Yes, she did, she had unpaid bills stuffed in drawers several years ago which is when her mother stepped in. However, she sees her benefits as a right almost as she has been on them so long. It is that mindset which is leading her down this road, rather than her illness.
    • Afraid of Kittens
    • By Afraid of Kittens 15th Sep 18, 8:37 PM
    • 147 Posts
    • 150 Thanks
    Afraid of Kittens
    Yes, she did, she had unpaid bills stuffed in drawers several years ago which is when her mother stepped in. However, she sees her benefits as a right almost as she has been on them so long. It is that mindset which is leading her down this road, rather than her illness.
    Originally posted by happyandcontented
    She has rights to benefits but also has responsibilities.

    Did she ever consider giving away her only asset before her daughter and son in law got their tentacles in and convinced her this is the best course of action?
    • happyandcontented
    • By happyandcontented 15th Sep 18, 8:43 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    She has rights to benefits but also has responsibilities.

    Did she ever consider giving away her only asset before her daughter and son in law got their tentacles in and convinced her this is the best course of action?
    Originally posted by Afraid of Kittens
    Actually, she did, in that she had told them that she would sell and give the money to her daughters. When I and others, explained that this would be seen as deprivation of capital and that she would still be deemed as having the sale price and thus lose benefits (which was the intent behind the plan) she thought again.

    Son in Law then came up with this idea which she has now latched onto.
    • TELLIT01
    • By TELLIT01 15th Sep 18, 8:49 PM
    • 5,412 Posts
    • 6,007 Thanks
    TELLIT01
    It's not just cans of worms which are being opened up but whole mountains of the things. Defining a temporary move to live with the mother is difficult. DWP may accept that view or may say they consider it permanent after an extended period. That decision can't be made if her appointee hasn't informed DWP of her current situation.
    • happyandcontented
    • By happyandcontented 15th Sep 18, 8:56 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    It's not just cans of worms which are being opened up but whole mountains of the things. Defining a temporary move to live with the mother is difficult. DWP may accept that view or may say they consider it permanent after an extended period. That decision can't be made if her appointee hasn't informed DWP of her current situation.
    Originally posted by TELLIT01
    If she is on ESA plus whatever benefits pay for running the house which she still pays for, then why would staying temporarily with her mum affect that? She is still sick and still paying to run her house.
    • Sunny Intervals
    • By Sunny Intervals 15th Sep 18, 9:22 PM
    • 205 Posts
    • 651 Thanks
    Sunny Intervals
    If she is on ESA plus whatever benefits pay for running the house which she still pays for, then why would staying temporarily with her mum affect that? She is still sick and still paying to run her house.
    Originally posted by happyandcontented

    The value of the home you own is ignored in means-testing as long as you're living in it or are only living away from it temporarily. If she was living somewhere else permanently, it would then be counted as an asset for means-testing purposes and she'd lose income-based benefits. The fact that she's planning to sell it/give it away/rent it out is a pretty huge hint that this isn't temporary.
    • happyandcontented
    • By happyandcontented 15th Sep 18, 9:33 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    The value of the home you own is ignored in means-testing as long as you're living in it or are only living away from it temporarily. If she was living somewhere else permanently, it would then be counted as an asset for means-testing purposes and she'd lose income-based benefits. The fact that she's planning to sell it/give it away/rent it out is a pretty huge hint that this isn't temporary.
    Originally posted by Sunny Intervals
    To be fair, she did intend to go back, but I think she has now got used to living with her mum and her illness means that she struggles to do things on her own and it is a big step for her to go back to living alone. Too big a step it would seem.
    • happyandcontented
    • By happyandcontented 16th Sep 18, 2:09 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    It's not just cans of worms which are being opened up but whole mountains of the things. Defining a temporary move to live with the mother is difficult. DWP may accept that view or may say they consider it permanent after an extended period. That decision can't be made if her appointee hasn't informed DWP of her current situation.
    Originally posted by TELLIT01
    Is there a specific period after which it is deemed to be a permanent change of residence?
    • TELLIT01
    • By TELLIT01 16th Sep 18, 3:19 PM
    • 5,412 Posts
    • 6,007 Thanks
    TELLIT01
    Is there a specific period after which it is deemed to be a permanent change of residence?
    Originally posted by happyandcontented

    I don't know. I suspect it will be for a Decision Maker to make the determination based on many factors, not least of which would be the likelihood of a return to the original home. If she is considering selling / giving away, the initial supposition is likely to be that there are no plans to return.
    • happyandcontented
    • By happyandcontented 16th Sep 18, 3:48 PM
    • 1,393 Posts
    • 2,641 Thanks
    happyandcontented
    I don't know. I suspect it will be for a Decision Maker to make the determination based on many factors, not least of which would be the likelihood of a return to the original home. If she is considering selling / giving away, the initial supposition is likely to be that there are no plans to return.
    Originally posted by TELLIT01
    I think the benefits question is clouding her judgment. It has always been at the forefront of her thinking.

    Up to now she has been asked by her mother what her intentions are and always replied that she doesn't know. Her mother has pointed out that by not making a decision she is still effectively making one, that of staying where she is.

    This line of questioning seems to be what has brought about the suggestion of selling to her family at a nominal fee. It has been said that from an insurance perspective and a bill paying perspective she needs to decide what she wants to do.

    Then there is the inheritance question as, if she gives up her assets she cannot buy out her sister when her mum dies but would have nowhere else to go. Her mother wanted the other sister to get the inheritance solely and then drip feed distribute it to the sister on benefits so that no benefits were lost....but the other sister doesn't like the tax implications of that nor does her husband, but currently, that is apparently how the will stands.

    They were quite open about it all when I visited, but I think they did take onboard my points which hopefully they will think deeply about to avoid a real mess.
    • Sunny Intervals
    • By Sunny Intervals 16th Sep 18, 4:43 PM
    • 205 Posts
    • 651 Thanks
    Sunny Intervals
    Even the will sounds awful. Being left the money but not? Putting an unwilling unofficial Trustee in charge? No recourse for your friend if her sister just spends it all because it was all left solely to the sister? Or if the sister dies, gets divorced or gets in debt and all the money goes to someone else?


    The whole family seem to have become so consumed with this idea of keeping the benefits, they're tying themselves up in all these bizarre legal and financial knots.
    • TELLIT01
    • By TELLIT01 16th Sep 18, 6:13 PM
    • 5,412 Posts
    • 6,007 Thanks
    TELLIT01
    With every new piece of information the situation gets worse. If the mother doesn't trust the daughter to use the money wisely it needs to go into a formal trust of some kind. It's not fair on the other daughter to expect her to manage the finances for the rest of her life. What would happen if the other daughter died......
    • Afraid of Kittens
    • By Afraid of Kittens 16th Sep 18, 10:50 PM
    • 147 Posts
    • 150 Thanks
    Afraid of Kittens
    Is there a specific period after which it is deemed to be a permanent change of residence?
    Originally posted by happyandcontented
    In the back of my mind I can see the legislation about being temporarily absent to receive care elsewhere but this is time restricted I think to 52 weeks (I think) but the permanent change of residence is when she decides she isn't going to return to her former home.
    • Danday
    • By Danday 18th Sep 18, 3:45 PM
    • 388 Posts
    • 67 Thanks
    Danday
    The mother will be classed as depriving herself of an asset for benefits purpose.
    .
    Originally posted by Afraid of Kittens
    With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
    So how can she be said to be depriving herself of capital for benefit purposes if she sells it for 1?
    I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
    Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
    Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.
    • TELLIT01
    • By TELLIT01 18th Sep 18, 4:04 PM
    • 5,412 Posts
    • 6,007 Thanks
    TELLIT01
    With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
    So how can she be said to be depriving herself of capital for benefit purposes if she sells it for 1?
    I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
    Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
    Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.
    Originally posted by Danday

    It's the daughter's house, not the mother's. The daughter has moved in with her mother. The daughter is claiming Income Related benefits so if she effectively gives assets away with the intention of being able to continue claiming benefits it is almost certainly going to be classed as Deprivation of Capital. There is a big difference between reducing the price of a property in order to obtain a quick sale, and giving it away.
    • Afraid of Kittens
    • By Afraid of Kittens 18th Sep 18, 4:21 PM
    • 147 Posts
    • 150 Thanks
    Afraid of Kittens
    With mum owning and living in her own home and claiming a means tested benefit, her home is not classed as an asset for benefit purposes.
    So how can she be said to be depriving herself of capital for benefit purposes if she sells it for 1?
    I have seen many house sales happen at below market value for a quick sale - is it being suggested that that is also deprivation?
    Why doesn't the mother put her daughter on the deeds of the house as joint tenants?
    Daughter is then effectively the joint owner of the whole property for as long as mum lives and becomes the sole owner when mum dies.
    Originally posted by Danday
    She has left the property to live with her mother - it is an unoccupied former home. For benefit purposes it is classed as capital.

    She wants to give it away - this is deprivation of capital.



    Deprivation of capital
    77. Claimants may knowingly deprive themselves of capital in order to be
    eligible for benefit, or a higher award of JSA. This is known as
    deprivation of capital and, if proved, the capital in question is treated as
    notional capital.
    78. A claimant can deprive themselves of capital by:
    giving it away to another person
     buying personal possessions
     paying debts before the agreed date
     paying more than the amount due on a debt
     paying back a debt that is not a legal debt, capable of enforcement
     spending it extravagantly, even if the claimant says they have used it to
    pay for the necessities of life.

    Examples of capital
    9. Capital can include:
     savings for example, a bank or building society account, current or
    savings/deposit accounts or cash
     investments, for example, Premium Bonds, stocks and shares or
    insurance policies
    real property or in Scotland heritable property, that is land and anything
    that has its foundations in the land such as a house

     a beneficial interest in the capital of a trust.
    Note: this list is not exhaustive
    10. Capital can also include property and assets, such as:
     premises;
     land;
     buildings:
     domestic;
     business;
     plant;
     machinery;
     investments;
     rights to capital;
     shares;
     timeshares;
     other items, for example, boats and jewellery.
    Last edited by Afraid of Kittens; Yesterday at 4:27 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,604Posts Today

8,314Users online

Martin's Twitter
  • RT @Dora_Haf: @MartinSLewis So many people on here saying they're great until you get your PROPER job. What if Your proper job Is ON zero?

  • RT @hslt88: @MartinSLewis I?m a trustee for a youth charity. We only have a limited pool of funds for flexible youth workers for holiday sc?

  • RT @Dan_i_elle_88: @MartinSLewis Loved working zero hour agency care work. Never out of work and I loved having the flexibility! Only left?

  • Follow Martin