Hi jenniferpaMy sense is that the discretionary disregard really only comes into play when the person living there would be essentially homeless should the house be sold and thus have to be housed by the LA, or are really quite old and perhaps coming close to the age when they might well need care themselves.
Personally, I'm on the siblings side from what you have said.
I know my circumstances were different when my father was assessed the social worker did not ask me if I would be homeless if the house was sold.
She just said the house would have to be sold and potentially all of the proceeds used to pay for my father's care as my title to the house had not been registered at the time of my father's admission to the hospital.
As it happens I do have the means to buy a semi so I would have not been homeless but the social worker did not know that.
As I think you know the social worker was later proved wrong and the LA admitted this.
The house is however worth about £350,000 so the LA would have been in pocket even if they had to re house me in council accommodation as it would have charged me rent.