Client in receipt of IS, HRm and MRc DLA and lived in a HE house. Her 4 children wanted to invest in the house so that after their mother had lived her life they could sell the house and realise their investment.

Cl informed that she would be entitled to a 56% discount (35k) but that only one of the 4 children could have their name on the mortgage. Cl never expected to receive a portion. This was accepted and the four children paid equal shares of the mortgage into the joint account of the mother and eldest son.

Later the client's father became sick so the client moved into her son's bungalow where she could care for her father. Cl now lives in her son's house along with her father.

The house was sold 3.5 years after it was purchased for a profit of £88,016 after expenses and the mortgage. A solicitor distributed the sale monies as thus: £21,250 to each of the four children and £3,016 to the client.

Department say cl should have received 56% of profit and is considered as having capital of £3,016 and notional capital of £46,272. IS suspended.

I am awaiting information as to weather a tenancy in common was established by the solicitor but DMG paras 84255 and especially 84256 seem to give us some room to manoeuvre.

The main case being cited by the department is R (IS) 4/03.

Does anyone feel there is scope to argue that the circumstances mean that a significant operative purpose was not to receive IS?

Also are there grounds to argue that the client should not be considered as having 56% of the profit and that this should be reduced to reflect the 4 children’s share of the property?

p926 CPAG refers to R v Caerphilly CBC HBRB ex parte Jones, 1 Feb 1999, unreported as a HB case where the court decided there was no evidence of intention as the sole purpose of the arrangement was so that the relative would be gifted the discount value. Could this hold relevance in this case?

Any other help or comments would be most welcome!