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Thread: housing benefit/ council tax/ pension credit

  1. #1
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    housing benefit/ council tax/ pension credit

    Hiya this query is a bit confusing so I will do my best to explain, last year I lost my dad due to cancer, which left my mum widowed, they lived in a 3 bed house over 40 yrs whilst me and my siblings were growing up, my mum gets pension credit, housing benefit and council tax benefit she is 74. My brother who is 55 but still working wants to buy my mum's house, due to break up of his own marriage he is having housing problems because he's got no dependant children, what benefits will my mum lose if she goes ahead with the paperwork to start the ball rolling about this, I'm not sure what to think about it myself as mum would be living like a lodger in her own home, any info and advice would be good thankyou

  2. #2
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    I can't answer your question but would advise that if your brother does buy your mothers house, that she has some safeguard to her being able to stay in her home for life, I know things are okay at the moment but things change.

    A friend did this and when her son found a new wife she ended up in an annex that had no bathing facilities and had to knock on their back door to go to the toilet, they did not give her a key to the house as it wasn't hers anymore, a cautionary tale.

    Mags

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    Ok mags I will speak to my mum about this my idea is that she doesn't want to sell the house to my own brother but she hates seeing him with housing problems too x

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    Quote Originally Posted by donnaclarke View Post
    Hiya this query is a bit confusing so I will do my best to explain, last year I lost my dad due to cancer, which left my mum widowed, they lived in a 3 bed house over 40 yrs whilst me and my siblings were growing up, my mum gets pension credit, housing benefit and council tax benefit she is 74. My brother who is 55 but still working wants to buy my mum's house, due to break up of his own marriage he is having housing problems because he's got no dependant children, what benefits will my mum lose if she goes ahead with the paperwork to start the ball rolling about this, I'm not sure what to think about it myself as mum would be living like a lodger in her own home, any info and advice would be good thankyou
    This is a bad idea.

    If your brother buys your mother's house then she will have capital/savings of a considerable amount from the sale. This means that she will lose any means tested benefits - pension credit, council tax. She will have to live off her state pension and savings.

    I am confused by your saying your mother receives housing benefit. Was this a mistake? Does she live in a council house? If she does and your brother is considering using the Right To Buy scheme then he is not eligible for this - only your mother.

    if he can afford to buy a house then why doesn't he buy his own one? Sorry, totally confused!

  5. #5
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    If your mum is still a council tenant, your brother can't buy the house. Social housing can only be sold to the tenant so that non-tenants do not benefit from the discount price. Your brother could only buy the house if your mum bought it first and then sold it to him, but I believe that to prevent people making a quick profit buying their council house at a discount price and selling on again at market value, there is a minimum period after purchase during which the house cannot be resold. I think it's 5 years.

    If he was intending to let your mum continue living there anyway, presumably he could move in without buying the place and pay your mum a fair contribution to the rent and council tax, making up any reduction in her benefits caused by his presence.
    Last edited by noisynoodle; 27-03-15 at 11:46.

  6. #6
    Senior Member Lighttouch's Avatar
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    As mentioned only your mum could buy the house off the Council or Registered Social Landlord under the 'Right to Buy' rules.

    The house must remain in your mum’s name for 5 years or she will have to repay part of the discount.
    During that 5 years you can place a charge on the house so that if she dies or something happens you get repaid in full.
    Alternativvely she can execute added of trust which connfirms that the house was bought with your money.
    http://www.deedoftrust.co.uk

    Which way you do it depends if you have brothers and sisters and how they feel.
    The trust should ideally be registered.
    It also helps if you brother and mum write wills saying what happens to the house on death
    After 5 years you can put it into your brothers name.
    Provided your mum repays an amount to your brother equivalent to rent she pays now, she should get the same benefits.
    The solicitor who does your mum’s RTB purchase will have done this many times.

  7. #7
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    Ok thankyou everybody it all sounds and probably is so complicated I don't think she wants to sign the forms / paperwork anyway so I'm trying not to worry about it too much at the moment

  8. #8
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    Yes my mum is a council tenant she's been living there for 45 yrs sorry for any confusion

  9. #9
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    I agree with the other people who say she needs to look into this carefully before committing to anything. As far as her benefits go, she would lose all means tested benefits like pension credit, housing and council tax benefit if she were to sell a house as she would be well over the capital limit. It would also mean that in the future if she were to need to go into residential care, she would be left paying all her own fees until her savings dropped to a few thousand pounds.

  10. #10
    Senior Member Lighttouch's Avatar
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    That's why the house should be put in a 'Trust' - that way the house isn't in her name. She could then decide to give relations some proceeds of the sale as 'gifts' which is within the law.

    Proceeds from the sale of her home could be put in a Trust Fund so she could still claim benefits.

    There are too many unanswered questions like -

    - is her son wanting to buy with cash or a mortgage
    does his mum want to move or remain in the house as a lodger/tenant
    - she couldn't apply for a mortgage but her son might be able to buy on her behalf - see my earlier post.

    Both my grandparents lived in Council houses for 40 odd years. My parents never thought about trying to buy them which was a mistake. When they died after 45 years of paying rent the keys were given back to the Council for new tenants.

    What you might call a lost opportunity.

    Care fees. If the proceeds of the house were put in a Trust Fund that your mum could access and spend as she liked. She wouldn't be liable to pay care fees as the money isn't in her name.

    You need legal advice to move this project forward but it would be a worth while investment tat secures some inheritance for your mum's kids but gives her cash to play with.

    You should try to find out if your mum is entitled to Pension Guarantee as that is another springboard to other benefits.

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