Active discussions

Meet the Other Phone. Protection built in.

Meet the Other Phone.
Protection built in.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

Benefits Affected By House Sale

72 replies

NorthWestMan · 18/01/2018 15:34

Hey Everyone,

Looking for a bit of advice for my mother.

She’s in poor health and doesn’t feel that she has got much time left so she’s looking at cashing in her chips so to speak and buying a Caravan on a holiday park. Its always been her dream to do so.

The issue she has is that if she sells up she wont have enough money to survive without her benefits once she’s cleared her mortgage, bought a static caravan and basically settled up. She gets benefits such as disability, ESA etc. (I don’t know the exact details) however as far as we can work out she will lose them all and eat through all of her savings rather quickly. Part of what she wants to do is to ‘gift’ some money to my brother so that he can buy a home, I’ve included rough calculations below.

House Value: £120,000
Outstanding Mortgage: £20,000
Left £100,000

Caravan Purchase: £36,000
Clear Debts: £20,000
Gift to Brother: £30,000

Remainder £14,000

This £14,000 wont be enough to support herself for long so she wants to keep claiming her benefits but we’re stuck as to how she can sell the house, help my brother buy a property all the while keeping here benefits.

Does anyone have any suggestions or previous experience to help?

Thanks in advance

OP posts:
Gazelda · 18/01/2018 16:35

How old is she OP? Does she have any other income? Will she receive a private pension when she reaches retirement age?

AppleAndBlackberry · 18/01/2018 16:36

Yes, she could claim again once savings drop below 15k (they're means tested from 6-15k)

expatinscotland · 18/01/2018 16:37

'The concern isn't the immediate future but 7 + years down the line when she has gone through her savings.

My concern is that I don't want her to end up with nothing and struggling to pay for food etc.

The gift to my brother was her wishful thinking.

The question I'm trying to get the the bottom of is what happens in 7 odd years when her savings have dwindled to nothing. Will she be entitled to claim again or will she be knackered? '

That's complete pie in the sky with Universal Credit in. You can't plan on the benefits system in 7 years time so she needs to stay put. If she does it now she takes the chance of facing Universal Credit in 7 years and that's her lookout. The savings threshold is low for a reason, why should the state support people when they have the means to do so themselves and many working people are unable to save at all?

She sells up and burns through it all then she can face being homeless and at the mercy of the council when she can't pay the site fees and has to leave her van.

She's an adult, she can do as she likes, but cannot expect the government to provide a struggle-free life.

expatinscotland · 18/01/2018 16:38

'Yes, she could claim again once savings drop below 15k (they're means tested from 6-15k)'

PIP is not means-tested, but of course, you have to re-apply every three years. And the threshold for some benefits is as low at £6000 when it comes to housing benefit/LHA in many councils.

PersianCatLady · 18/01/2018 16:38

If PIP, ESA etc are not means tested then she should be okay shouldn't she?
Contribution Based ESA is not means tested but Income based ESA is means tested.

PersianCatLady · 18/01/2018 16:44

The concern isn't the immediate future but 7 + years down the line when she has gone through her savings
I am confused - at the beginning of the thread you posted that that your mother is in poor health and doesn't feel that she has long left to live.

If she has £100,000 capital and doesn't spend it or give it away then that should keep her going for quite a while.

May I ask, why the need to sell the house at all when she is presumably living there and receiving her benefits at the moment??

Is this change related to the changes in SMI payment??

tissuesosoft · 18/01/2018 16:44

Best thing to do is run the calculations through here- www.entitledto.co.uk.
If she is in a Universal Credit area after 6k up to 16k then her benefit amount would be reduced. 16k and over she wouldn't be entitled to anything

tissuesosoft · 18/01/2018 16:46

Best thing to do is run the calculations through here- www.entitledto.co.uk.
If she is in a Universal Credit area after 6k up to 16k then her benefit amount would be reduced. 16k and over she wouldn't be entitled to anything

PersianCatLady · 18/01/2018 16:46

The concern isn't the immediate future but 7 + years down the line when she has gone through her savings
I am confused - at the beginning of the thread you posted that that your mother is in poor health and doesn't feel that she has long left to live.

If she has £100,000 capital and doesn't spend it or give it away then that should keep her going for quite a while.

May I ask, why the need to sell the house at all when she is presumably living there and receiving her benefits at the moment??

Is this change related to the changes in SMI payment??

Kursk · 18/01/2018 16:46

Could she buy a car, apply for benefits, then give the car to your brother who could then sell it?

Kursk · 18/01/2018 16:46

Could she buy a car, apply for benefits, then give the car to your brother who could then sell it?

Original poster
NorthWestMan · 18/01/2018 16:47

Thanks everyone.

OP posts:
Efferlunt · 18/01/2018 16:47

Money aside has she really thought through what living in a Park home would be like? Nice in summer sure but freezing in winter. She won’t be able to live there all year round at the mercy of the site manager and ever rising fees. They may require her to replace the home after a few years.

If I were you I’d do my best to put her off tbh. Sounds like a pipe dream

Kursk · 18/01/2018 16:48

Could she buy a car, for £30k then sell it to your brother for £100?

PersianCatLady · 18/01/2018 16:48

Yes, she could claim again once savings drop below 15k (they're means tested from 6-15k)
Sorry to be picky but it is £6,000 to £16,000.

Basically -

Below £6,000 - Does not affect I-ESA.

£6,000 - £16,000 - Every £250 (or part of £250) of capital you have between £6000 and £16,000 is assumed to produce an income of £1 a week (known as ‘tariff income’), which is added to your other income when income-related ESA is worked out.

Over £16,000 - Cannot get I-ESA

expatinscotland · 18/01/2018 16:50

'Could she buy a car, apply for benefits, then give the car to your brother who could then sell it?'

No, because it's deprivation of capital because the taxpayer should not be paying for someone to give a huge amount of money to a relative. Buying a car for that amount is deprivation of capital for obvious reasons Hmm

MrsFantastic · 18/01/2018 17:25

www.entitledto.co.uk/help/savings

MyBrilliantDisguise · 18/01/2018 17:29

One thing she could do is to sell the house and buy into some scheme where you part-buy and part-rent. That way she wouldn't have a mortgage payment to worry about.

Or your brother could move in with her?

HisBetterHalf · 18/01/2018 17:29

Why should the tax payer pay her benefits because she has given her own money away?

citybzg · 18/01/2018 17:33

Oh ffs really.

All these suggestions on how to keep benefits with thousands of pounds to her name.

Buy a car at £30k and sell it to her son for £100 Hmm. Are people really that stupid with money that they would waste it on something ridiculous like this rather than spend it on living, which is what it is for?????

This thread is an eye opener that's for sure.

Nobody should be working out how to keep claiming with this amount of money ffs. No wonder the country is on its knees.

expatinscotland · 18/01/2018 17:48

'One thing she could do is to sell the house and buy into some scheme where you part-buy and part-rent. That way she wouldn't have a mortgage payment to worry about.'

No, instead she'll have a mortgage payment and a rent to worry about. Has she ever actually lived in a caravan? A lodge-insulated one can well approach the cost of her house, not including those lovely site fees, which again, rise every year and are far more than council tax as it's a private water/sewage and rubbish service.

Pension Credit is administered by the HMRC, so, of course, they'll want to know all about your assets.

Quite rightly, because benefits are not there to protect a person's savings or someone's inheritance Hmm.

The rules on benefit paying mortgage, too, are much stricter than rentals and again, subject to caps.

PersianCatLady · 18/01/2018 18:13

No, instead she'll have a mortgage payment and a rent to worry about
Depending on what house prices are like in her local area she may be able to afford a 50% share without a mortgage. Then she would only have to worry about paying the rent which will be around 50%.

PersianCatLady · 18/01/2018 18:15

The rules on benefit paying mortgage, too, are much stricter than rentals and again, subject to caps
SMI is changing and is going to be paid as a loan in the future.

Viviennemary · 18/01/2018 18:20

I don't think the gift to your brother would be allowed under deprivation of assets. Buying a mobile home would be. This is all very unwise IMHO. Why is she selling a house to buy a mobile home which will depreciate in value. Years ago I knew somebody (not well) who did this and rued the day. Why is she giving away £30K of her money to your brother leaving her without enough to support herself. The whole thing sounds bonkers. She should think again.

ivykaty44 · 18/01/2018 18:20

If your mother sells her house and pays of debts that’s fine

What she can’t do is give away £30k and then claim means tested benefits as she didn’t qualify when she had the capital and then gave that capital away - she would be seen as giving away capital purposely to qualify for means rested benefits

Swipe left for the next trending thread