My parents are wanting to release equity from their home or sell their home and go to rented accommodation. The only problem is that they will have a large sum of money in their bank account and so will have to pay rent costs and not get help from the state even though they are pensioners, which means the money they get from the property sale will have to be used to pay rent over the coming years. Is there any way they can make this money "disappear" so they get their rent paid and enjoy the money without using it to pay the rent and waste it away.

Even if there was, you are asking us to help commit fraud. That is against the guidelines of this site.

What you seem to be asking is how your parents can have the govt subsidize their rentals instead of paying out of their own pocket.

What I would suggest is seeing a financial advisor. Its possible that some form of annuity or trust might be able to legally shelter the funds to some extent.