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Assessed Income Period

Posh
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Welfare Benefits for Over 60's, Alnwick CAB

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Hi,

A really quick query:

A couple in an assessed income period for PC, sell their house and gain £100000, moved into rented accomodation - do they need to inform DWP re change of circs (capital) and will it end assessed income period?

Cheers

FIT Advisor
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benefit advice officer, three rivers housing association, co durham

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It will only end their AIP if they had housing costs included in the PC award. If they are on PGC and no housing costs, then PC will continue and they can also claim HB/CTB. They can also secure increased PC if during the time they qualify for Attendance Allowance and there is a need to review and award more PC.  However, they need to be prepared to explain any reduction in capital at the end of the AIP. If they are on PSC., then although this will continue as outlined, they will not be able to claim HB/CTB as their capital would (or should) be taken into consideration.  Only PGC overules the £16K capital limit for HB/CTB.  I have had customers advised, no impact on PC., enjoy spending, only to find out that as they have PSC it affected the HB/CTB they were claiming.

And yes, they should disclose to ensure claim is correctly paid.

[ Edited: 3 Mar 2013 at 09:41 pm by FIT Advisor ]
Jon (CANY)
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sanwyp - 03 March 2013 09:38 PM

It will only end their AIP if they had housing costs included in the PC award.

Just wondering what the basis for this is, if it’s (still) the case?

Possibly relevant to a case I have where an AIP looks to have been ended arbitrarily early.

FIT Advisor
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Based on experience and explained that the AIP effectively ends when the claim has to be reviewed to remove help with mortgage. If no mortgage costs included, then sale of property and resulting capital not taken into consideration until AIP ends. Interestingly, you could get get claim reviewed to take into consideration a change to the advantage of customers, so for example, an award of Attendance Allowance that means a SDP should be included and any increase in savings would still be ignored.  Would also impact on anyone who has a service charge included in the PC award on a leasehold property they sell.

Jon (CANY)
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Thanks for the reply. But, I still don’t see the legal basis for ending the AIP, just because someone no longer has mortgage costs?

In CPC/206/2005 and CPC/1928/2005 (and also the examples in the DMG), it was supposedly known that the claimant was planning to sell their house at the time that the AIP was set, therefore the DM was found to have made an official error when he set an AIP in the first place. But that does not apply to someone who decided to sell their house at some later point during the AIP. Neither do any of the circs in the SPC Act 2002 (s9) seem to apply, or reg 12 of the SPC regs. What am I missing?

FIT Advisor
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Please do update as you progress this through appeal and department explains the regulation that they appear to be using.

Jon (CANY)
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Will do, though I’ve not even see a decision yet!

Background: client reported house sale, TPS wrote to say that no change to PC as he is in an AIP. Some time later, PC payments just stop. Client contacts us, we ring them to ask why. They say “Whoops! We should have sent a decision on that.* It’s on its way now”. Still waiting to see if client brings it in..

* I paraphrase

seand
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I’m mainly just replying as I have a client in a similar circumstance. He’s selling his house and in an AIP. On my reading, it didn’t appear that this should end his AIP - that’s what I advised him, so I’m watching to see what happens with him and this thread…

Jon (CANY)
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Decision issued, it merely states a capital figure in the calculation. We asked for reasons, and have been told it was due to “unstable retirement provision” when the AIP was set. Both the decision and explanation were only forthcoming when we chased it up, six months after payments of PC stopped.

Which makes me wonder how routine it is for the pension service to just cease payments, whenever they learn about proceeds of sale, regardless of the AIP dates.

mickd123
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Part 8 of the PC1 claim form asks if you are expecting to receive any other income or lump sum (eg from the sale of a property) within the next 12 months.  If you answer ‘yes’ to this question then the DM should not set an AIP so that you will be obliged to report changes of circumstances (eg receipt of proceeds from the sale of the property) and this will allow the DM to supersede the award.  The decision to set an AIP can be revised retrospectively (on grounds of ignorance or mistake as to a material fact) but the DM is supposed to put himself in the shoes of the DM at the time of the original award.  So for example a lottery win could not be reasonably anticipated but if your property was on the market, its eventual sale could/should have been reasonably expected.  If there was no intention to sell the property at the date that the AIP was set, I do not see how the DM can go back in time and remove the AIP on the grounds that the retirement provision was ‘unstable’.  If there was an intention to sell at the time the AIP was set, then there is a potential overpayment as the AIP had been set erroneously and the claimant may have ‘caused’ the error by not answering Part 8 accurately.

1964
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Which is why I’ve never really seen the point of AIPs. They caused more problems than they were worth in my view and it’ll be one thing I shall be glad to see the back of.

MickD
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Posh - 26 February 2013 10:37 AM

Hi,

A really quick query:

A couple in an assessed income period for PC, sell their house and gain £100000, moved into rented accomodation - do they need to inform DWP re change of circs (capital) and will it end assessed income period?

Cheers

We previously decided that in this case the AIP would prevent the £100,000 being taken into account and Pension Credit would continue and Housing Benefit could be claimed provided that Pension Credit Guarantee was in payment.

What would happen in a scenario in which, instead of selling the property it was retained and rented out?  CPAG page 311 states that the rental income would be ignored for Pension Credit but that the value of the property counts as capital and therefore is treated as producing a ‘deemed income’.  Would this ‘capital’ be treated in the same way as if the property had been sold and allow Pension Credit to continue under an AIP?