This scenario has been put to me - client is on Income Support, inherits a capital share in a house with 2 other sisters, valued at £9k. The house is rented out to an assured tenant, and the rental income continues to go to the client's elderly mother, as it has done for the past 15 years.

Because of the capital rules, Income Support has now ceased, with consequent knock-on effects on Housing Benefit. However, the concern is that their is no access to the capital at all. The obligation for the house to continue to be rented out to provide a retirement income for the client's mother is set out in the will, and the other two parties are, in any case, not willing to sell. Does anyone know caselaw that could be used to argue this capital value should be disregarded for Income Support and Housing Benefit, as it is clearly not accessible for her to live on. As her only source of income was her Income Support, she is now virtually destitute; but the DWP only advised her to force the other parties to sell up, which she is not in a position to do.

Any advice would be appreciated.

I would have thought your best bet was to argue that the claimant has no capital.

If the property cannot be sold, and the income has to go to client's mother, how can the property have any capital value? Who has valued it at £9k, and how have they concluded that a 1/3 share in a property which cannot be sold, and which cannot generate any income for the owners, has any market value at all?

Alternatively, you could argue that your client is not the beneficial owner of the property. Since it seems that the property has to be used for the benefit of the mother, you may be able to argue that the fact that your client's name is on the deeds shouldn't be decisive. The weakness with that is probably that if the property is ever sold your client would receive her share, but it could be argued that beneficial ownership of the property will rvert to your client when mother dies/goes into care/etc.

It seems to me that your client and her sisters are in the position of trustees of the capital asset, holding legal title only. If so then your client has no beneficial interest but a future interest only. As such she has no capital for Income Support purposes. Sight of the precise terms of the will would seem necessary though before a definitive answer could be given.

Regards
Paul

Even if he can be shown to be a beneficial owner of the property, it may weel be that his share is virtually worthless as the deemed share would not have much worh to a willing buyer even ifone could be found.

The DWP and LA's seem to continue to value a share in a property as a portion of the market value of the whole property with vacant possession. This is not the way such shares should be valued. Se R(JSA)1/02