Council tax reduction based on earnings and capital - pensioner

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I have a relative who is on new state pension only (qualified last year). Before than he was living off less than £400 a month UC for 5 years.

I helped him apply for the council tax reduction as he has no idea how to do any of these things on a computer. He was looked after by his mother his whole life and now has no clue how to do basic things.

He qualified for a massive reduction, paying only £50 council tax per year, due to income, single person discount and under £16k in savings. This is despite living in a Band F property so it’s a big reduction.

As I understand it, once he has more than £16k in savings he will not qualify anymore. But he thinks he gets the reduction because he only has state pension as his income and he will get it forever regardless on whether he has savings.

I have told him he must tell the council if his savings go above £16k but he says he doesn’t understand and I am causing him stress and making him ill by mentioning it.

Even though his income is just SP I know he is able to save more than half of it as he is still living as he did when he was on UC which was much lower. He doesn’t spend much and his bills are very low. So there is a chance he will eventually exceed £16k in savings eventually though I don’t think he has yet.

I am concerned he won’t keep on top of this and could then end up with a big bill or worse. It would be helpful if the council asked for bank account statements periodically from him so he knows it’s important. I have to tell him things several times for it to register. Does anyone know if the council ever asks for this proof, or is the responsibility purely on the claimant?

I can't answer your latest question, but can you encourage him to spend more?

On such a low income, even without paying much in the way of council tax, he must be skimping on food, heating, house maintenance etc as that would take up a lot of a state pension, especially if he has to do something like replace the boiler.

I assume he owns the house that he inherited from his mother? If he wants to continue living there, unless everything is in good state, he could spend a lot of spare money he has replacing things over time, so he's more comfortable and it maintains the value of the house.

Or if you think he's not capable of the above, would he benefit from downsizing into a sheltered living arrangement? There he might be able to access formal help with managing his money and presumably he'll free up a sizeable sum to live off? Depending on the amount, it might be worth him paying for advice and setting up investments to provide a sustainable income.

Are you willing/able to continue helping him? Making sure all his bills are paid and perhaps even teach him to manage his money? After all, he's only in his mid 60s, it's not like he's 'elderly' or incapable of learning, unless there's a disability you haven't mentioned. He could do an online course, or one in person. What was his situation when he was younger? Did he work or was he unable for some reason? Did he have any money while he was (presumably) working up until a few years ago.

If he qualifies for pension credit there is no capital limit. Have you checked on a benefits calculator to see if he qualifies?

Yes they can ask for bank statements. If they don't, and he's gone over the £16k limit then that will come to light when he dies and his estate goes through probate. They will then take any money owed out of his estate.

It isn't anything that will effect you. Tell him what will happen then leave him to it. But him thinking if he doesn't pay he gets away with it isnt true. It will just defer it.

If he’s in receipt of full new state pension he won’t qualify for pension credit, even if it’s his sole income. Pension credit is a top up for someone whose income is below that level.

He doesn’t qualify for pension credit as he gets full state pension.

He definitely needs to downsize as the house needs many repairs and maintenance he could never afford. But that’s another story.

He has always been frugal and doesn’t want to spend money if he can help it. He will only buy the cheapest food and won’t turn the heating on unless vital. He won’t take any notice if people tell him to spend more money.

He did used to work but very low pay jobs and stopped about 10 years ago.

If he qualifies for attendance allowance he will qualify for pension credit because of the premium. He sounds as though he needs a lot of support so he might qualify.

He doesn’t get attendance allowance and I don’t think he’s eligible for it

Also you can’t get pension credit if you have over £16k in savings either

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Yes you can actually. I suggest you take some advice from a benefits advisor.

Your savings and investments
If you have £10,000 or less in savings and investments this will not affect your Pension Credit.
If you have more than £10,000, every £500 over £10,000 counts as £1 income a week. For example, if you have £11,000 in savings, this counts as £2 income a week
https://www.ageuk.org.uk/siteassets/documents/factsheets/fs48pensioncreditfcs.pdf

Yes dear. So if you have 20k in savings you lose £20 per week in benefit. If you have 30k you lose another £20 so £40 in total etc. It's called tariff income. So there is no capital 16k limit.

As I said, you clearly don't understand the rules and should take advice from a benefits advisor.