This isn't strictly a benefits question but I'm hopeful that someone out there will know the answer.

Our client is separated from his wife and children, who continue to live in the marital home. Our client is severely disabled and now lives permanently with his parents. He requires adaptations to his parents home to enable him to bathe and has applied for a Disabled Facilities Grant.

The marital home is the subject of divorce proceedings and if this were an Income Support question it would be quite straightforward - client would not be treated as a beneficial owner unless and until the court made such a decision.

Can anyone help with relevant legislation that the same principle should apply when doing the means test for a DFG? I believe it is covered in the Housing Act but have had no success in finding a copy. The grants officer has not yet made a decision but has suggested he would value the clients share as value of whole asset minus secured loans, divided by two. This would almost certainly result in no grant assistance towards the adaptations.

Thanks in anticipation.

Shona

You need to look at the Housing Renewal Grants Regulations 1996, unfortunately I do not have access to a full amended version (and it has been amended every year!)

Schedule 4 lists the disregarded capital, good luck!

The relevant provision is regulation 39 of the Housing Renewal Grants Regulations 1996 and is in the following terms:

39. Capital jointly held.

“Except where a relevant person possesses capital which is disregarded under regulation 38(4) (notional capital), where a relevant person and one or more persons are beneficially entitled in possession to any capital asset they shall be treated as if each of them were entitled in possession to an equal share of the whole beneficial interest therein; and the value of that equal share shall be calculated by taking the value of the whole beneficial interest calculated in accordance with the foregoing provisions of this Chapter, as though—

(a) that interest is solely owned by the relevant person; and

(b) in the case of a dwelling, none of the other joint owners occupies the dwelling concerned,”

Note, the regs have been amended a few times since but reg 39 was left untouched. Compare this with reg 52 of the IS Regs where the harshness of the rule was modified by the Court of Appeal in Hourigan. However, reg 52 of the IS Regs does not have limbs (a) and (b) of reg 39 in it.

Thanks both for your help.

Nevip - is there an argument that the beneficial ownership has not yet been established as the property is the subject of proceedings?

I had continued to search and found the following:

6. How is a second house/property treated?
.....

If the property is occupied by a disabled or 60 + relative or an ex partner, ignore the capital value and treat any rent paid to the relevant person as income.


Ref:- Housing Renewal Grant Regulations 1996, Regulation 36(A) and Schedule 4.

Gareth - I found this on ferret, would you like to contribute?

Any comments very welcome.

Many thanks

Shona

Shona

Yes, the beneficial ownership is yet to be determined by the court. Furthermore, even if he has a beneficial interest and the court grants her a life tenancy in the property then the sale price of the property on the open market with a sitting tenant may well be reduced to zero, or very little.

Shona

Forget that last bit. I forgot about reg 39(b).

Thanks nevip

Can I just clarify what you mean:

1. Until it is established by the courts, my client should not be treated as a beneficial owner, and

2. If the courts then decide he does have a beneficial interest in the property then it's value will be calculated as a share of it's open market value. ie the specifics of the situation will be irrelevent.

Shona

Hi Shona

1. That’s my view, yes, if the property is subject to formal legal proceedings but you might want a divorce lawyer’s expert opinion to be sure.

2. On a plain reading of regulation 39, again, yes. However, as I said earlier limbs (a) and (b) treat a person as having a beneficial interest in the asset that he might not in fact have.

When this was attempted in regulation 52 of the Income Support regulations the court of appeal in Hourigan modified the harshness of that effect with regard to real property where the parties were beneficial tenants in common, so that each had a beneficial ownership of their actual share (i.e. the actual percentage of their contribution to the purchase price) and not a deemed equal percentage share.

However, I don’t know whether the decision in Hourigan has the same reach with regard to regulation 39 because of limbs (a) and (b) even though the principle is the same but its certainly worth considering.

Regards
Paul





.

Thanks again nevip

I've just had a very helpful conversation with David at Ferret. He tells me that reg 33 says the value of the property is taken into account unless subject to one of the disregards in Schedule 4. And, that para 5 of Schedule 4 allows the value of the property to be disregarded if occupied by an ex- partner as long as they are not estranged (formally by court order) or divorced.

As this is before the reg 39 you quote, I'm hopeful that reg 39 is only concerned with how to value the asset if it does not fall to be disregarded.

(It's a real struggle to try to make sense of the various regs when you can't see them with your own two eyes!)

I'd be very grateful for your opinion on whether or not this could apply.

Thanks again for all your time and effort.

The disregard mirrors that in the IS Regs. Estrangement does not have to be by court order, it is merely a set of facts. There is some disagreement amongst the commissioners about whether emotional disharmony has to be a factor. However, the commissioners are agreed that the central point is whether the parties no longer consider themselves a couple, and, if this is so, then by implication, this will include an element of emotional disharmony. If that is so then the property cannot be disregarded under this limb of the regulation.

The Housing Renewals Grants Regulations 1996 can be found through the links on this site. Just go to toolkit, legislation, and statutory instruments. The SI number is SI 1996/2890.

You could do with a paper copy of the IS Regs so you can read the commentary to reg 52 to get an idea of the details of the Hourigan decision to get a flavour of some of the issues around joint beneficial ownership.

Hi nevip

I've taken a look at the Hourigan decision and it makes sense. The value of the asset calculated according to reg 39 of the Housing Renewal Grants Regs is very unfair and looks ridiculous in light of the arguments presented.

Refusal of the grant on the basis of excess capital supposes that the applicant has sufficient resources to not need a grant. The reality is that the value of his beneficial interest in the property, if indeed there is an interest, is probably nil. He is completely incapable of making the necessary adaptations to his home at his own expense.

We're hoping that the Grants Department will take the decision that at the date of application the applicant did not have a beneficial interest in the property because that was the subject of current proceedings.

Thanks again - I've enjoyed exercising my grey matter on this one.