Hi all
How would everybody think HB would deal with this scenario:

Single person with Mental health needs, currently living in supported accommodation with 5 other service users, shared accom. Does not have any benefit, has capital of £40k so paying full rent and living off capital.

No longer requires high level of support and wants to buy shared ownership scheme with the money his mother left him in her will.

If he used all his capital to buy shared ownership flat. Would need to claim I.S. and HB.

Would both deny claim based on deprivation?


Many thanks

Speaking from the perspective of HB (although I'm pretty certain the principles are the same for IS on this issue).......

Based on the info given, there doesn't appear to be any disposal of capital for the purpose of increasing, or obtaining, HB.

HOWEVER, it's worth bearing in mind that the LA doesn't need to show that the disposal of capital was for a dominant purpose in obtaining HB. In order to show deprivation, the LA only need to show that the deprivation was a "significant operative purpose" (to obtain / increase HB).

There are lots of CDs on "significant operative purpose" - I'll point to some of them if needed.

Regards

Thanks Kevin

From what i know the main reason for choosing shared ownership is based on choice and giving the best long term solution. The claimant see's shared ownership as the best route for sustaining his long term independance. If he went for LA, Housing Association or private renting then evently he would need to claim full HB and I.S., whereas with shared ownership although having to claim I.S. immediatley he would be claiming a reduced HB over a longer period.

The problem of course is the chicken and egg situation. Having to complete on the purchase and then find out if HB and I.S. will pay. What happens if they deny and an appeal is unsuccessful.

Could you give me some "significant operative purpose" CD's please
Many thanks

The following CDs address "significant operative purpose":

CH/3169/2004 - Commissioners' site (www.osscsc.gov.uk)
CH/1873/2005 (in particular, see paras 10 & 12) - on the way to Rightsnet.
CH/2735/2005 (para 17) - on the way to Rightsnet.

R(SB) 38/85 (para 22) - Rightsnet (swapshop)
R(SB) 40/85 (para 10) - Rightsnet (swapshop)

Happy reading....

why would it be deprivation of capital at all?
he would still have his capital - in property instead of money - he has just changed the form of capiatl he possesses??

It was held in R(SB)38/85 and R(SB)40/85 that converting capital from a form that is not disregarded to a form that is disregarded may in certain circumstances amount to deprivation.

The Commissioners do not specify what those circumstances are and I would guess that buying into shared ownership is not deprivation.

I would also say that if you are able to argue that a property is more suitable to a person's disablement needs, then if you could find somewhere to buy outright on a £100k mortgage, outright ownership might be a better bet

thanks, stainsby. i'm all CD'd out at the moment -vaguely remembered one recently suggesting otherwise, but might have dreamed it, as cannot now find it.

R(IS) 8/04 however, is cautious about the above -

"It may be that there has to be some qualification of what was said in paragraph 8 of Commissioner’s decision R(SB) 40/85 (see also R(SB) 38/85) – that a person deprives himself of capital if he uses it to purchase some other resource, whether the resource is likely to retain its value or to depreciate and whether or not it would be disregarded for benefit purposes. Such a qualification would rest on the change from a rule where there was a discretion as to the amount of notional capital to take into account to a mandatory rule (“shall be treated as possessing”) in regulation 51(1)."

not sure if this helps psmith though...

Thanks very much to Kevin D, both CH/1873/2005 and CH/2735/2005 are now available on rightsnet.