PERSONAL INJURY PAYMENTS USED TO BUY A HOUSE TO RENT OUT TO SON

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  • #38936
    VIKKIE
    Participant

    Please help!!!!!

    When does disregarded personal injury payments stop being disregarded? A claimant in receipt of GPC has bought a house out right to rent to her son?

    I no rental income is disregarded but is the house not used as capital value? I am right thinking that even though it was bought with a disregarded income at the point the house is bought it isnt a personal injury payment anymore? 😉

    #110253
    walmslm
    Participant

    Does GPC stand for Pension Credit(G)? If so then it doesn’t matter, full HB/CTB is payable. Pension service may want to know about it, but it’s unlikely the award would change.

    #110269
    Kay_Tade
    Participant

    [quote=VIKKIE]I am right thinking that even though it was bought with a disregarded income at the point the house is bought it isnt a personal injury payment anymore? ;)[/quote] No, the regs talk about a disregard for the amount = PIP with no time limit, so an amount of capital = to the amount of the PIP would still be disregarded. Assuming the property is = PIP then the whole amount is disregarded but if more, then an amount = PIP is disregarded.

    #110299
    Anonymous
    Guest

    We had one like this and after a lot of agonising I came to the conclusion that once the capital ceased to be held by the court (in the form of a trust fund), and became converted into another form, the disregard no longer applies. Pension Service would disregard it for pension credit for another reason entirely (because pensioners can inherit millions and not be affected during the AIP)

    #110305
    Kay_Tade
    Participant

    [quote=Chris Dring]We had one like this and after a lot of agonising I came to the conclusion that once the capital ceased to be held by the court (in the form of a trust fund), and became converted into another form, the disregard no longer applies[/quote]

    Would that not mean once the judgement has been made there would no longer be a disregard? The regs, as I stated above, only talks about amounts received as a PIP and nothing else. I would interpret this as meaning, whatever you decided to do with the money, the amount received as a PIP is forever disregarded and deducted from any capital you have after which you then calculate capital for benefit purposes.

    #110308
    Anonymous
    Guest

    Sched 6 17(2) goes on to talk about where the amount is administered by the High Court or a trust. Once it’s come out of that vehicle it’s up for grabs, as I read it, bu tyou could be right It’s much clearer in the WA Regs

    #110313
    VIKKIE
    Participant

    Thank you all so much xx

    #110844
    d-stainsby
    Participant

    What is to stop the trustees converting the capital from money to real property and keeping the property in trust?

    #110846
    Anonymous
    Guest

    Subparagrphs (1) and (2) are directed at different situations aren’t they? Subpara (1) deals with an amount paid to the claimant or partner for personal injury, and subpara (2) deals with money paid to trustees or the court. The source of the payment is the defendant or their insurance company: if they pay the money to the court it’s disregarded, if they pay the money to the plaintiff it’s disregarded. The same capital could conceivably move from one category to the other, for example if the court releases the money to the successful plaintiff. It would still be a payment made to the claimant for a prsonal injury. Either way it’s disregarded.

    I would be inclined to agree with Kay that this is one of those provisions that allows an amount of the claimant’s capital to be disregarded for ever more if they once received a personal injury payment, even if it is no longer held in cash form and indeed even if it’s no longer the same capital any more. It’s the same wording as para 13 of the Schedule (WW2 compensation) – the words “an amount equal to” are used to transfer the disregard to other items of capital. You could spend the qualifying sum, replenish your savings by other means and still enjoy the disregard.

    I know there is a perception that the Regs are absurdly generous to pensioners in cases like this, but I think it is done as much for our benefit as anything – it relieves the Council of the having to track sums of money to see if they are still traceable to an original qualifying payment. Far easier if we just permanently disregard the amount.

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