Advice about pension credit and savings allowance

[beenjamin4]

hi

I need some advice regarding my finances please.I have recently been awarded pension credit Guarantee Credit.at the moment I have just about £2000 in savings and this has been declared.but I am about to sell my house and buy a smaller property this will leave me with around £25000 over from the sale.as I understand it there is no upper limit to savings as far as council tax benefit is concerned.

as for the pension credit I receive just under £12 on top of the state pension to make it up to the Guarantee ammount of £137.35 a week.

my question is I will need to spend some of this money getting the new house sorted ie: replace kitchen.new roof. new boiler, replace carpets etc I estimte I will spend at least £12/£15000.plus the actual moving costs ,legal fees etc

so I expect to be down to under the upper savings limit within a year or so , will they consider i have deprived myself of the money in order to qualify for benefit.I am not really sure what is considered reasonable spending.

[BRIGADIER2JCS]

It would be best to contact the Pensions service

and ask what the implications are.

[Nystagmite]

There is something about the money being ignored if it's being used to buy another property.

 

With deprivation of capital, they will look at whether it was done on purpose to claim benefits. It's not just a case of "My savings have gone down" and they claim you've deprived yourself of capital.

 

You need to keep receipts.

[beenjamin4]

There is something about the money being ignored if it's being used to buy another property.

 

With deprivation of capital, they will look at whether it was done on purpose to claim benefits. It's not just a case of "My savings have gone down" and they claim you've deprived yourself of capital.

 

You need to keep receipts.

 

Thanks for the reply, yes I will keep all receipts

[beenjamin4]

It would be best to contact the Pensions service

and ask what the implications are.

 

Thank you

yes that is a good idea in theory but in practice I have found I have rung them with a question and have been told to ring another number then another etc untill I have had to give up frustratd.

[MIKEY DABODEE]

When you sell your house you will need to do a change of address with the Pension Service.... On the form it asks if you owned your former property, They will then ask for a redemption statement from your solicitor, to show the sale and purchase of your new property... Also a statement from the bank account to show the balance left being deposited...

You will have bought and sold a property so I dont know if the capital will be disregarded even if you say its for essential repairs, that would be up to a decision maker.

Bit if your claim is closed and you spend the money on improving the property, keep all receipts, invoices etc.

When you make your claim again before its processed a deprivation of capital decision will then be done

 

If you intend to spend the money in the manner you have described I cant see a problem, if they are essential repairs, but it would be up to a DM to determine if they will be classed as essential or non essential

good luck with the move, a stress in itself

[flumps1976]

I'm not certain for Pension Credits but for IS and JSA if you sell a property and have capital from the sale as long as you intend to purchase a further property using that capital it can be ignored for a peiod of up to 52 weeks but this does have to agreed and decided by a decision maker.

If you have essential repairs that are needed then there shouldn't be a problem as long as the cost is considered essential and reasonable, make sure you get the usual number of quotes to get a competetive quote from someone you would feel comfortable with too.

If the capital is not used within the 52 weeks it is then treated as capital which could potentially put you over the capital limits.

[beenjamin4]

When you sell your house you will need to do a change of address with the Pension Service.... On the form it asks if you owned your former property, They will then ask for a redemption statement from your solicitor, to show the sale and purchase of your new property... Also a statement from the bank account to show the balance left being deposited...

You will have bought and sold a property so I dont know if the capital will be disregarded even if you say its for essential repairs, that would be up to a decision maker.

Bit if your claim is closed and you spend the money on improving the property, keep all receipts, invoices etc.

When you make your claim again before its processed a deprivation of capital decision will then be done

 

If you intend to spend the money in the manner you have described I cant see a problem, if they are essential repairs, but it would be up to a DM to determine if they will be classed as essential or non essential

good luck with the move, a stress in itself

 

Thank you very much for your reply it is very helpfull . so as I understand it there are no hard and fast rules it will ultimatley be down to a DM to decide wether or not I would be allowed to update and replace kitchen ,carpets etc.

[beenjamin4]

I'm not certain for Pension Credits but for IS and JSA if you sell a property and have capital from the sale as long as you intend to purchase a further property using that capital it can be ignored for a peiod of up to 52 weeks but this does have to agreed and decided by a decision maker.

If you have essential repairs that are needed then there shouldn't be a problem as long as the cost is considered essential and reasonable, make sure you get the usual number of quotes to get a competetive quote from someone you would feel comfortable with too.

If the capital is not used within the 52 weeks it is then treated as capital which could potentially put you over the capital limits.

 

 

Thank you for the reply .I will not have the full ammount from the sale of my house as it will go instantly towards the purchase of the smaller house.but I expect to be left with a surplus of around £25000 of which I will probably spend £12/£15000.

so if a DM says I should not have spent the money on the house what happens then ? is there some sort of timescale aas to when the money would have been considered as used in the meantime.

[Nystagmite]

so if a DM says I should not have spent the money on the house what happens then ? is there some sort of timescale aas to when the money would have been considered as used in the meantime.

 

Pretty much, yes.

[MIKEY DABODEE]

Thank you very much for your reply it is very helpfull . so as I understand it there are no hard and fast rules it will ultimatle work, be be down to a DM to decide wether or not I would be allowed to update and replace kitchen ,carpets etc.[/quote

 

Yes it would, after the sale and purchase of your new property they might if you state the remainder of the capital is to be spent on essential repairs disregard the capital to you have completed the work, but they may decided you have capital www.scottishlife.co.uk/scotlife/Web/Site/Adviser/TechnicalCentralArea/Rates&FactorsArea/PensionCreditArea/PensionCreditHomePage.asp

 

This may then close your claim. You will then complete the work and spend the capital doing the work

 

You can make a claim as soon as you qualify again, ie you have spent the money

but a deprivation of capital decision will be done,

 

if the spending of the capital is classed as non deprivation, in other words you needed to spend it to make the new home habitable, or esential reapairs, etc, its hard to define

then a decision will be made and your new claim paid.

 

But if is deemed you have spent the money to gain entiltlement to benefit then notional capital will be assumed.

 

Say for esample you spend 10k on a hand made Italian leather designer suite, then the DM would say even though you had spend that money, you had a choice you didnt have too, so then capital 0f 10k would be assumed on your claim. Case controls are then put on your claim and every three month or so it goes down in batches of £250. So three months later £9750 would be assumed and so forth till its gone, may take a few years. This means that they would treat you as having 10k for example when you hadnt really because you had spent it on the suite.....

 

So you can reapply as soon as you have spent your capital.

 

Just keep your receipts etc for everything ready for the decision

Edited February 5, 2012 by MIKEY DABODEE

[beenjamin4]

Thank you for all the advice,I do have 1 other question I read somewhere ( I think on these forums ) that if you come into a sum of money, you can not pay off your credit card debts in full just the minimum amount each month.does this rule also apply to pension credit ? as I do have a longstanding credit card debt due to having to use it for day to day living.

Edited February 7, 2012 by beenjamin4

[BRIGADIER2JCS]

Hi, Is this the guaranteed element of pension credit?

Can you please explain a little more??

[beenjamin4]

Hi, Is this the guaranteed element of pension credit?

Can you please explain a little more??

 

Hi

Yes this is the guaranteed element of pension credit.

[BRIGADIER2JCS]

Are thinking about offering a variation on

the minimum payment required by the

agreement for instance £1 per month?

If so you should be aware that this would

mean that the account would be closed and

a default can be entered on credit files even

if the reduced payment is agreed.

[beenjamin4]

sorry I have just editd my post ..I left out the bit about coming into a sum of money which I will do when the house sale goes through.

[MIKEY DABODEE]

I have never heard of that rule. after the sale of your house and you have your surplus, if you paid off your credit card, then the DM would look at it when making the deprivation decision.

I cant say they will go with non deprivation on this but I have seen lots of decisions where they have treated repayments of credit cards as non deprivation of capital, in other words allowed it