AIP and capital

I’m still wary about advising on AIP as it still seems to good to be true in some instances.

In this case I’d appreciate a second opinion please -

If client moves into LA accommodation from owner occupied property will the capital from the sale be disregarded during the AIP ?

Cheers

I have had many instances of this as I work in a regeneration area.The proceeds from the sale will be ignored until their AIP expires and their Pension Credit will be recalculated taking the capital into account ,but if the client is over 75 they have usually been set an unending AIP so the capital will never be counted towards their Pension Credit entltlement ,I know it seems to be too good to be true
but it actually is !

cheers chris

Is this the case?  I’ve coincidentally just had a call from a friend who’s been hit by a £15,000 OP from his late mother’s estate because she went into a care home and didn’t declare the value of, and the sale proceeds from, her home.  A quick call from me has elicited the response that an AIP stops on a change in address, which is probably not the case, but looking at the SPC reg. 12 for the end of an AIP, we get:

12(c) a claimant who has no partner is provided with accommodation in a care home or independent hospital other than on a temporary basis.

That seems pretty clear.

My client’s are looking at a LA tenancy not going into a care home. I knew that would’ve meant an end to the AIP

Ah, sorry, I misunderstood.  The only LA accomodation round here is care homes.

I’m currently advising someone who moved from their own home into rented accomodation. Was in receipt of PC guarantee credit and in an AIP until 30th April 2014.

Advised Pension Service of move and fact that former property was on the market. Advised Pension Service again when property was sold and client received the proceeds in June 2010.

No action taken until 11th Feb 2011 when client received letter stating that PC had been reassessed and entitlement reduced with effect from 28th June 2010. Letter also advises that AIP continues to be awarded from 1st May 2009 to 30th April 2014.

So, claim has been reassessed during AIP due to increase in capital from sale of former home.

More confusing is the fact that client continued to receive PC guarantee credit until Feb 2011 so you would have thought that there would be a substantial overpayment of PC for period 28/6/10 - 11/2/11. Nope, the PC overpayment is for £71.54 and covers the period 28/6/10 to 4/7/10 only.

However, because LA were notified that PC guarantee credit ceased on 28/6/10 - HB & CTB have ceased from this date which has produced a substantial overpayment that the LA are now seeking recovery off.

So, in answer to the original post, I was always under the impression that if someone was in receipt of PC and in an AIP an increase in capital was not classed as a change in circs until the AIP ended, but now I’m not so sure.

John

See section 9 State Pension Credit Act 2002 and the commentary thereto (pages 165-67 of Volume 2 Bonner & Mesher).  In particular, CPC/1928/2005.  In that case the PC claimant had already moved into rented property before their former home was sold, but the principle appears to be that should the sale be reasonably foreseeable at the date of the PC claim then no AIP should be set.  Where an AIP is made when it shouldn’t have been, it appears not to act as a defence against re-assessment of PC entitlement when the proceeds are eventually received.  Suppose each case will turn on the claimant’s intention re the home at the date of the PC claim.

I’m bumping this up to see if anyone else can clarify it for me please

John - 03 March 2011 09:38 AM

However, because LA were notified that PC guarantee credit ceased on 28/6/10 - HB & CTB have ceased from this date which has produced a substantial overpayment that the LA are now seeking recovery off.

If the delay in re-calculating the PC was because of PS delay surely the LA should have only applied the change from the monday after they were notified by the DWP (on or after 11th Feb 2011).