denotes premium content | Jan 9 2009 Feature
posted 10 Oct 2005 in Volume 10 Issue 6
ECA course: Part 14
Protecting the interests of older clients
David Coldrick, partner at Wrigleys Solicitors, continues his examination of the disregards relating to the family home. Capital that is disregarded is not taken into account by local authorities in respect of the cost of long-term care applicable to a resident.
The disregard for the former dwelling of the resident where that dwelling is still occupied by the resident’s former partner who is also a lone parent: NA(AR) Regs1 Schedule 4 paragraph 2A NA(AR) Regs Schedule 4 paragraph 2A (words in square brackets added by the author) states: “In the case of a resident who has ceased to occupy what was formerly the dwelling occupied as his home following his estrangement or divorce from his former partner, the value of the resident’s interest in that dwelling where it is still occupied as the home by the former partner who is a lone parent [is disregarded].”
This is another temporary exemption of the former dwelling from the local authority means-test.
It is not, however, a general disregard of a residence occupied by a former partner. Sometimes, it is assumed to be such an exemption. It requires that former partner is not only the resident’s former partner but is also a lone parent. It is designed to protect the interests of the child and not the former partner.
NA(AR) Regulation 2 applies the definition of ‘lone parent’ used in IS(G) Regulation2 2, which states: “‘Lone parent’ means a person who has no partner and who is responsible for, and a member of the same household as, a child or young person.”
Even after noting this limitation, there is an implied series of events. NA(AR) Regs Schedule 4 paragraph 2A may sometimes not be entirely effective in protecting the interests of the relevant child, which is the care objective of the paragraph.
The application of the paragraph requires the previous occupation of the dwelling by the resident while living together with a partner as a married or unmarried couple. Living together as good friends is not enough. Living together as husband and wife (whether or not married – but also in a heterosexual context) is necessary. The paragraph also requires the resident to have always had or to have obtained an ‘interest’ in that property, but not necessarily its sole ownership. That is the interest in the property to which the disregard applies.
The happy situation just outlined must then be followed by the resident’s estrangement or divorce from their partner. This may or may not involve the resident leaving that property, but it does involve the separation of households implicit in estrangement or divorce. After this, the resident’s entry into residential care arises while the dwelling continues to be occupied ‘as the home’ by the former partner and a child.
The requirement of occupation as the home means that if the former partner seeks to rent out the property and live elsewhere or otherwise abandons it as the main home, then the benefit of paragraph 2A will be lost.
It does not appear necessary that the child living with the former partner must be a child of that former partnership. Indeed, if it was suggested that this was necessary, paragraph 2A might be considered to be superfluous because the disregard contained within paragraph 2 would apply to protect the residence of that minor from the capital assessment.
It therefore seems reasonable to think of paragraph 2A only in the context of the former partner being a lone parent where the child is not the child of the resident.
The temporary exemption provided by paragraph 2A appears to end upon the child being 16 or, at the latest, 18 when they would cease to be a minor, so that the title ‘lone parent’ would become anachronistic. The benefit of paragraph 2A would also seem to end should the lone parent cease to be a ‘lone parent’. That might be upon their remarriage or commencement of living together with another person as husband and wife. It would also seem to end upon the death of the resident’s former partner, even if the relevant child still lived there. It would also end on the death or departure to another home of the relevant child, even if the former partner still lived there. This is because paragraph 2A requires the occupation by both the former partner and the child.
In co-ownership situations, even when the disregard expires, the normal principles of valuation may still render the value of the resident’s share in their former dwelling at nil or much reduced. That would mean that it should not form a part or at least a large part of the resident’s means-tested capital, which might effectively force a sale. Given that the original motivation for obtaining that interest in land will tend to have involved joint occupation with the former partner, the valuation case of Chief Adjudication Officer v Palfrey (1995) 139 SJLB as opposed to the valuation case of Wilkinson v Chief Adjudication Officer [2000] 2 FCR 82 C.A should apply to give a nil valuation.
The former partner and/or the relevant child (upon ceasing to be a minor) might in some cases ultimately have to rely upon the exercise of the local authority’s power under NA(AR) Regs Schedule 4 paragraph 18. They would need to ask the local authority to disregard the value of premises because ‘it would be reasonable to’ do so. The exercise of that power might be time limited, for example, to the end of the former minor’s full-time education.
The disregard for the sale proceeds of the resident’s former dwelling for 26 weeks or longer to facilitate the purchase of a replacement dwelling. NA(AR) Regs Schedule 4 paragraph 3.
NA(AR) Regs Schedule 4 paragraph 3 disregards: “The value of the proceeds of sale of any premises that would be disregarded under paragraph 3 of Schedule 10 to the Income Support Regulations (proceeds of sale from premises formerly occupied).”
IS(G)Regs Schedule 10 paragraph 3 states: “Any sum directly attributable to the proceeds of sale of any premises formerly occupied by the claimant as his home, which is to be used for the purchase of other premises intended for such occupation within 26 weeks of the date of sale or such longer period as is reasonable in the circumstances to enable the claimant to complete the purchase.”
Under the subheading “Property acquired but not yet occupied”, the Charging for Residential Accommodation Guide (CRAG) paragraph 7.006 states: “Where the resident has acquired property, which he intends eventually to occupy as his home, disregard the value of the dwelling for up to 26 weeks from the date the resident first takes steps to take up occupation, or such longer period as is considered reasonable.”
This disregard will usually be relevant in cases involving temporary residents looking to buy a more suitable property to enable them to rejoin the general community.
The disregard of the value of a dwelling intended to be occupied by a resident in certain circumstances: NA(AR) Regs Schedule 4 paragraph 16
NA(AR) Regs Schedule 4 paragraph 16 disregards: “The value of any premises, which would be disregarded under paragraphs 27 or 28 of Schedule 10 to the Income Support Regulations (premises a claimant intends to occupy).”
IS(G) Regs Schedule 10 paragraph 27 states: “Any premises which the claimant intends to occupy as his home, and in respect of which he is taking steps to obtain possession and has sought legal advice or has commenced legal proceedings, with a view to obtaining possession, for a period of 26 weeks from the date on which he first sought such advice or first commenced such proceedings whichever is earlier, or such longer period as is reasonable in the circumstances to enable him to obtain possession and commence occupation of those premises.”
IS(G) Regs Schedule 10 Paragraph 28 states: “Any premises which the claimant intends to occupy as his home to which essential repairs or alterations are required in order to render them fit for such occupation, for a period of 26 weeks from the date on which the claimant first takes steps to effect those repairs or alterations, or such longer period as is reasonable in the circumstances to enable those repairs or alterations to be carried out and the claimant to commence occupation of the premises.”
This disregard will, like the disregard for sale proceeds in NA(AR) Regs Schedule 4 paragraph 3 above, usually be relevant in cases involving temporary residents looking to obtain a more suitable property to enable them to rejoin the general community.
The disregard of any premises occupied in whole or in part by a third party where the local authority consider it would be reasonable to disregard the value of those premises: NA(AR) Regs Schedule 4 paragraph 18
NA(AR) Regs Schedule 4 states that a disregard may be applied to: “The value of any premises occupied in whole or in part by a third party where the local authority considers it would be reasonable to disregard the value of those premises.”
This particular provision does not appear to be mirrored anywhere in the IS(G)Regs Schedule 10.
The NA(AR) Schedule 4 paragraph 18 disregard is broad and may be unlimited in time. However, cost of care-related issues may affect what a particular local authority decides it is willing to disregard.
Under the heading “Discretion to Disregard Property”, the CRAG paragraph 7.007 states: “Where the local authority considers it reasonable to do so, they can disregard the value of premises not covered in paragraphs 7.002-006, in which a third party continues to live. Local authorities will have to balance the use of this discretion with the need to ensure that residents with assets are not maintained at public expense. It may be reasonable, for example, to disregard a dwelling’s value where it is the sole residence of someone who has given up their own home in order to care for the resident, or someone who is an elderly companion of the resident, particularly if they have given up their own home.”
The CRAG paragraph 7.008 states: “Where the local authority has decided to disregard the value of a property, it is left to the local authority to decide if and when to review that decision. It would be reasonable, for example, where the local authority has been ignoring the value of a property because a long-term carer was living there, for the local authority to begin taking account of the value of the property when the carer dies or moves out.”
The CRAG emphasises the view that ‘premises’ only refers to a dwelling and, more particularly, a dwelling where the resident has lived. While this may be true for the interpretation of the other disregards referred to in the foregoing analysis, it is submitted that this is not true in the case of NA(AR) Regs Schedule 4 paragraph 18.
The disregard is isolated from the major disregards relating to the resident’s dwelling at the start of the Schedule and appears to stand alone.
The case of R(IS) 3/96 decided that, for income-support purposes, the equivalent to the NA(AR) Schedule 4 paragraph 2 disregard, the word ‘premises’ was akin to dwelling. But that disregard, specifically incorporates the expression ‘as his home’ whereas the paragraph 18 disregard simply refers to occupation. This may potentially include residential, recreational, commercial and business use. That is the natural meaning of occupation, which, in this context, simply implies some form of possession or tenure of property, but nothing else.
While the CRAG provides a good example of when a local authority might use the disregard to benefit a resident’s former carer (who may perhaps fall outside the class of potential beneficiaries of the NA(AR) Schedule 4 paragraph 2 disregard) it would not, in the writer’s opinion, be appropriate to view it so narrowly as to apply to only residential property. The broad wording of paragraph 18 potentially allows both residential and other situations to be addressed fairly by a local authority.
Given the apparent encouragement of recent government administrations to create a business and enterprise culture, it is suggested that business occupants should have as much call upon the disregard as non-business occupants. It is, after all, open, as the CRAG correctly suggests, for a local authority to review its use of the disregard periodically.
As to what is a reasonable exercise of the disregard in terms of scope and period of application, this may change according to the prevailing need and societal value.
References:
1. National Assistance (Assessment of Resources) Regulations 1992 (as amended)
2. Income Support (general) Regulations 1987 (as amended)
David Coldrick is partner in charge of the
