Hi guys,

I've got a client who is paralysed from the neck down due to a sports injury.

his current accomodation is totally unsuitable for his needs. the LA are being extremely tardy in providing him with a property adapted to his needs.

His parents are trustees of the personal injury trust that was set up after his accident, this is disregarded for capital purposes for IS and HB under the relevant regs.

His parents want to buy him a suitable home from the trust funds. They want to know if he could claim housing benefit and whether the house would still be classed as "trust property" and therefore disregarded under the capital regs.

I have noted the exemption provided under 9(3) of the HB regs and feel client could argue that the purchase of the property and subsequent HB claim were not to abuse the HB system, but were to provide client with accomodation suited to his needs.

Any thoughts from you luvverly fellow welfs much appreciated.

P

Two obvious problems - you say "buy him a suitable home" - I know it's stating the obvious, but if that's what they actually do - i.e. he is the owner and entitled to dispose of the fee simple, then he's precluded from HB under reg 12(2)(c).

The issue of whether reg 9(3) can kick in will depend on the facts - just how "tardy" have the authority been? Is there any indication of how soon they might be able to provide him with specially adapted accommodation? If such an indication has been given, how firm a commitment have they given?

Are the authority under any statutory duty to provide him with specially adapted accommodation? If they are, is the length of the delay such that it could be argued that they are in breach of their obligations and have steps been taken (e.g. JR) to force them to carry out their duties? If these options haven't been explored, it may be more difficult to engage reg 9(3).

Playing devil's advocate for a moment (and with an eye on what might amount to an abuse of the scheme) your client has already been compensated for his misfortune by the public purse - i.e. the trust. If there are sufficient funds in the trust to buy him a property outright, why should the public purse then compensate him a second time through the HB scheme, particularly when the policy intent of the scheme is to enable individuals to retain a roof over their heads and not to enable them to aquire property?

Sounds similar to a recent case- CH/1096/2008 (see summary in WRB 208). I think caution is needed...

If the house is kept in the names of the trustees, it will depend on whether the terms of the trust allow them to let him live there or rent it to him, rather than hold it on such terms that he is absolutely entitled to ahve it put in his name if he so wishes (this is a bare trust).
A properly drafted trust deed may well contain a power for the trustees to invest in land including buying a house and allowig the beneficiary to live there and if so on what terms. If they do this it remains trust property.

Virtually all trust deeds contain a power to invest in land, and since an investemnt means income, they must normally cahrge rent. However, if he is entitled to the income from the trust this all gets a bit circular since in effect he would be paying the rent to himself..I don't like to thik about it, it makes my head hurt. You need a good trusts lawyer to interpret what the trustees can do, and a good social security lawyer to work out what the social security impact is. I must say that unless it is a discretionary trust, and there are other people who could be entiteld to the income from the trust, it would be unusual to be able to charge the beenficiary rent - he lives there in lieu of getting income. And I would find it hard to see that the relationship between trustees and theri beneficiary was an arms'-length commercial one.

Hi guys,

Many thanks for all of your responses. Definitely a lot to think about.

I think the safest route at present will be to keep mithering the LA to pull their fingers out on the accomodation issue whilst getting a trust lawyer to consider the constitution of my client's particular trust.

Cheers again for the assistance.

P