good morning, i have received an appeal with regards CTB, claimant has second prop which is not on the market, property worth £90 grand outstanding mortgage of £70.512. So has capital over £16,000.d.n.q for CTB.
Problem claimant has stated he took a out a loan for £18.000 (equity)therefore he no longer has equity in the second property and as such no longer has excess capital, or does he? Help!

Not sure I understand what you are saying here. Where does the loan come in?

sorry, what i should have said was the claimant received a loan under the "equity release scheme"therefore should it be disregarded,or still included? in the assessment?, if we include it the claimant would still have capital over £16,000, if we disregard it the he has no capital and can be considered for CTB benefit.

If the other figures are correct, it would be highly unlikely that any lender would have given such an equity release loan; it's way out of line with the calculations they use for deciding what they will advance.

Two questions

Was the 2nd loan secured on the property?
What did he do with the cash, and when?

yes, the loan was secured on the property and he said he used it to clear credit cards and other debts

IF both loans are secured against the property surely it is only the remaining equitable interest which falls to be taken into account. The issue of what happened to the loan advance including confimrtion of where the money went and whether this amounts to deprivation is another question.

i think i need to clarify, 1. second property not on the market valued at £90,000, claimant still owes £70.512(he has paid the differance) 2.loan against the property (under the equity scheme)£18.000,Is this disregarded in the assessment.

I know it's not what you are asking but I have to agree with Gareth. Have you seen the paperwork for the loan ?
If any lender did allow someone to borrow that amount it would make me wonder about the valuation on the property. The only way you would think a responsible lender (and maybe he just borrowed from a very irresponsible one) is if they valued the property at a higher amount.

I don't know whether there is a rule that specfies whether the loan amount is deducted from the value - but in the absense of a specific rule it should be. Capital should be valued at market value, which is what you could raise by selling it or taking out a loan (CPAG Welfare Benefits Handbook page 1046), and he cannot raise money he has already had through equity release....

Victoria J.

Thank you all, the only paperwork i have seen is the original paperwork regarding the value of the property, i would need the claimants permission to have the property revalued (not sure the claimant would give permission!)so i will plod on. Thanks

Laherne,

If this is the case I think it is (yes, I was that appeals officer in Wokingham before you!), I gave him until I think Mid Sept to provide the info. This is Mr Shopkeeper with a second property right?

I would just draw adverse inference, Nil him and refer to TAS on the basis that you have revised the decisions, but the revision was not in the claimant favour, and then let TAS decide...

You say property valued at £90k and outstanding mortgage is c.£70,500.

You have forgotten to deduct 10% for costs of sale, so capital (not withstanding the second loan is actually less than £16,000.

If the second loan is secured against the property (which it must be if done under an equity release scheme) than it is an 'incumbrance' which must be deducted from the market value. In this case, the remaining capital value would be nil.

If the client needs a rep (and if HBspecialists comments are anything to go by, he does) then please refer him to us. At the very least, I think it would be fair to send the claimant a copy of this thread.

Merry Xmas