Letting a property held via a Personal Injury Trust

At the time of settling his claim Mr Bloggs, an adult at the time, lived with his mother who provided him with much needed care, support and motivation to face the every day aspects of life.

Having settled into his post-settlement life he now has a partner and a young child. Due to the limited support available from the State it was considered necessary that Mr Bloggs’ partner would need to return to work in order to maintain a financially sustainable position.

Mr Bloggs who, due to his injuries, can find life frustrating on occasion, remains in need of input and support from family members, not least his mother who continued to live with them for a period of time.

However, adding a small child to the family dynamic and the challenges this can bring, accompanied with a side order of household sleep deprivation, cracks began to show in the relationships within the household; Mr Bloggs and his mother identifying that remaining the main support throughout the day and living together permanently would soon become an untenable position.

Despite being made aware of the potential wrangling that might ensue with the Local Authority, Mr Bloggs and his trustees decided to purchase a separate property within his Personal Injury Trust in which his mother would reside.

As his mother was not able to work due to the care that she needs to provide, she would be entitled to claim housing benefit albeit it was envisaged that that the Local Authority may take issue over the ownership of the property effectively being her son’s.

The Local Authority has indeed declined the payment of Housing Benefit, in this instance relying on the clear regulations that entitlement to Housing Benefit does not arise if a child of the claimant owns the property.

However, in terms of the Benefit regulations the term ‘child’ is specifically set out as being an individual that is aged 16 or under. Mr Bloggs is an adult and therefore the current decision is being appealed. We hope to provide an update on the outcome of this matter in due course.

Mr Bloggs, having received an award of damages, has been able to provide himself and his family with a suitable property in a desirable area. The difficulty has been that, to house his mother suitably nearby, rents are at a premium and far beyond her affordability.

However, should the decision be upheld and the appeal fail, Mr Bloggs would have been better placed allowing his mother to secure privately rented accommodation guaranteeing an entitlement to Housing Benefit. Whilst the Local Authority would fall short of funding the full rent liability in this particular area, this would have left a relatively small funding gap that Mr Bloggs could have funded as gratuitous care payments from his award.

Financially at least, this would have been preferable to allocating such a large capital sum to the purchase of a property on which his mother is unable to meet any rent payment. Mr Bloggs is currently losing the access to both the initial capital and the growth that the capital would have achieved. The appeal continues…