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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To ask if you know about Deprivation of Capital

23 replies

DextroDependant · 29/08/2018 18:12

A relative sold her house to her child and had 30k left over. They moved across the country and rented a home together. The relative kept transferring cash from her own account to a joint account shared with the child and the child burnt through it fast.

Things between then have soured and the parent now needs to rent a place of their own. However they have no income as they gave up their job in order to move across the country with the child and provide childcare for the grandchildren.

So because she has no longer got the 30k and can't say what it had been spent on she has been told she isn't entitled to housing benefit or the housing aspect of universal credit.

Does any one have any advice or can point me in the direction of the rules? She is being passed from pillar to post.
How long would 30k be expected to last someone for general living expenses?

Her area has just switched to universal credit and she is waiting for her first payment.

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VanillaBeans · 29/08/2018 18:27

So her child has profited from this woman’s sale of her house, has been using her for free childcare, and is now refusing to put her up in the flat they agreed to rent together?

I have no idea honestly, that sounds so cruel and horrible I can’t believe it. Sorry I can’t offer practical advice :(

I’d think she would need legal advice - people gain and lose money and can still be unintentionally homeless - if she was spending the capital on her family with the understanding that she would be staying in the rented house with her child and grandchildren, and has now been told she has to leave, I don’t see how that can count as her not being homeless? However, whether she is a priority for housing and what the social housing situation is where you live is a completely different story.

VanillaBeans · 29/08/2018 18:31

Sorry meant to add that the CAB might help with the legal aspect but Shelter are better for housing specific circumstances so might be better. I also think councils go on a local connection criteria too so she depending on how long this has been going on she might be better speaking to the council where she used to live

DextroDependant · 29/08/2018 18:31

I only have one side of the story but that's the gist of it. I think they underestimated how it would be living together and both of them would rather circumstances change.

Are there specialist solicitors for this kind of thing?

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LIZS · 29/08/2018 18:32

Did she sell at market value? Did the same child buy house and move with her? So the asset still is within the family.

DextroDependant · 29/08/2018 18:33

Oh sorry should have added it in the OP. They moved almost 3 years ago and her other child also lives in that area too.

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DextroDependant · 29/08/2018 18:34

Yes she sold at market value and to the child that she moved across the country with.
The house is being rented out privately and the child rents a home in their new area.

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LIZS · 29/08/2018 18:37

Who gets the income from the rental? Is relative vulnerable or just naive?

DextroDependant · 29/08/2018 18:39

The rental income pays the mortgage on the house.

Not vulnerable just naive. Apparently she has spoken to CAB and Shelter and neither can help her because she can't explain where the money has gone and giving it to family (the child) does not count as living off it.

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LIZS · 29/08/2018 18:41

Could relative now work? Did she have any income since moving? It could look as if she has gifted the money over time rather than used it to live off. Is she on the tenancy, bills, ct etc?

Graphista · 29/08/2018 18:42

Well relatives been very silly haven't they? Not to protect the roof over their head.

Shelter have specialist lawyers but they can't change the law. As far as the govts concerned the relative has deliberately and carelessly deprived themselves of the money to house themselves, the law is fairly clear on that. It's been publicised on occasion too (when pools/lottery winners have let the money run through their fingers, when the 'dementia tax' was essentially altering this law slightly).

They could contact shelter but honestly I expect they'll be told they need to find a job.

Shelter will likely be able to tell you how long the "penalty phase" might be - I'm guessing a significant amount of time given the govt generally expect unemployed people who are able to work to live on approx £700 a month so £30k/£700 pcm = roughly 3.5 years

DextroDependant · 29/08/2018 18:44

I think she is looking for work currently, she is a couple of years off retirement.

I don't think she was on the old tenancy and she is definitely not on the child's new tenancy.

The child has moved into new property and the mother has to be out at the end of the tenancy on Friday.

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DextroDependant · 29/08/2018 18:47

@Graphista I totally agree and could see it was a disaster in the making but telling her I told you so won't help.

Well it has been almost 3 years, possibly she could live with her other child until the end of the penalty period or until she finds a job.

Note to self never give up everything to support someone else's dreams!!

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RJnomore1 · 29/08/2018 18:51

So she's been living with no income for 3 years?

£10K a year doesn't seem unreasonable for living expenses.

DextroDependant · 29/08/2018 18:53

That's what I thought @RJnomore1 she just can't seem to get a straight answer because she can't show where the money has gone/probe that it has been supporting her. It looks like she has been giving it away as gifts to the child.

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Sandstormbrewing · 29/08/2018 19:08

If they suspect deprivation of assets then they will ask for bank statements, and if that shows regular transfers the 30k will stay as 30k for calculation purposes.

However if she can show she had no other income but the 30k, and can evidence things such as rent and food shopping (i.e. normal living expenses) then that should be ok.

However from what you describe it IS deprivation of assets.

Sandstormbrewing · 29/08/2018 19:11

It looks like she has been giving it away as gifts to the child.

But from what you describe they have. Or was it for other things? Such as rent? Or were they being abused?

If the money was given against their will or under duress the only way to resolve this is to contact the police and follow through with any action they take, which would be seen as evidence that the relative didn't want to give the money and therefore did not deliberately deprive themselves.

DextroDependant · 29/08/2018 19:16

I don't think it was abuse, I just don't think they expected to be in a situation of needing to support and accommodate themselves.
The money was used for general spending before often than not from the child's account.

I think the deal was the mother gave up her job and sold her house because the child was offered a job in a nice part of the country and needed the mother to provide childcare (unusual hours). There fore the child paid the bills etc but had access to the 30k also.

So basically she has been stupid and short sighted but not deliberately deprived of assets to claim benefits.

It's a hell of a situation!

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Graphista · 29/08/2018 19:22

Must have been frustrating for you to witness op.

Nobody should ever put "all their eggs in someone else's basket" in this case it's a parent and child but we see it SO often on here where it's a sahm who sells the "little flat" they were living in before they met their partner, don't marry, don't make wills or any other provision, pay towards the partners property in cash with no receipts, no acknowledgement it's in essence rent, ditto bills etc and then when partner leaves, or becomes critically ill or dies they're up shit creek cos they've no proof of any possible contribution to their home at all, no legal contract to confer any rights, no evidence of what they've spent proceeds of their property sale on. Madness!

I wish it were on a public advert shown hourly on terrestrial channels and on SM - don't give away shed loads of cash without proof or something tangible to show for it NO not even to a loved one!

LakieLady · 29/08/2018 19:37

The deprivation of capital rules don't require you to prove what you did with the money. She can challenge the decision on the basis that it all went on living expenses and as a pp has said, £30k over 3 years isn't excessive at all.

The rules also only apply if there is a perception that the money has been intentionally disposed of with the intention of maximising benefit income.

If I were advising her, I would go through the bank statements of both accounts with a fine toothed comb, and account for as much as I possibly could. It is perfectly reasonable to have a joint account with someone with whom you share a home, so that shouldn't be an obstacle.

The joint account should show what has been paid out in rent, deposits and agent's fees, what has been spent on council tax, utilities etc, shopping and any furniture or household appliances bought jointly. That'll come to a goodly chunk. Then there's any car expenses, clothes, holidays - all of these are an acceptable use of capital if they're reasonable and not excessively extravagant. Buying a Bentley would be seen as excessive, a Ford Focus wouldn't. Spending £50 having your hair done every few weeks would be fine, spending hundreds getting Nicky Clarke to do it might be excessive. In one case I dealt with, the council accepted £3k or thereabouts spent on getting the client's teeth straightened as reasonable.

Gifts can also be ok, again, providing they're not extravagant. In another case of mine, the council accepted that the client gave each of her 4 adult children £5k each from her late husband's death in service benefit, because they had always agreed that if anything happened to either of them, they would make sure the kids were ok.

Other things I've had accepted as reasonable was some expensive, professional quality sewing stuff (overlocker, sewing machine etc) purchased by a client with a view to making some money from dressmaking, garden tools, a camera that cost several hundred and a trip to Australia to visit family.

All my deprivation cases pre-date universal credit (we haven't gone full serivce for UC yet in my area), and I always started off dealing with the council, as they tend to be more reasonable and treat people as individuals. You can actually go and meet them, armed with a schedule of spending, bank statements and receipts. Once I'd established the case with the council for HB, the DWP just rolled over on everything else.

I'd also play the "naive" card, and say that the adult child took advantage for any significant funds that can't be accounted for.

Most important is to challenge the decision within the one month deadline, you can do that with a letter and provide full evidence a couple of weeks later.

Make it as easy as possible for the person reconsidering the decision, with a nice, neat schedule of where the money's gone.

CSIblonde · 29/08/2018 19:45

So why doesn't the child give the tenant in the old house notice. Relative lives in old house paying rent to child (who bought house off said relative). Housing Dept wise if she left their new place voluntarily so she made herself homeless so they won't help with housing.

DextroDependant · 29/08/2018 19:50

#CSIblonde the mother still has no income to pay the rent on the house and the child needs the rent money to pay the mortgage.

Also I am the tenant so I really hope she doesn't do that.

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LukeCagesWife · 29/08/2018 20:05

Was the £30k equity after the original mortgage was cleared? If not, where did the rest of the purchase price go?

DextroDependant · 29/08/2018 20:56

Yes that's right 30k was what was left after the mortgage was paid.

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