Partner's savings classed as 'Capital'?

[Ellie May]

Hi all

 

Question for my mum if you please. About a year ago my mum came into some inheritance, not a lot but more than £16,000. Very recently and unexpectedly my step dad has had to come off work sick. With a bit of luck he will be able to return to work, bt may be off work for up to a year.

 

Income wise, with him not working (my mum is retired) they would qualify for state benefits, but if my mum's unheritance is included in my step dad's assesment then surely he won't get anything?

 

I know this may seem greedy, but my mum has always struggled finanically and qon't even qualify for a full state pension, so this money was supposed to keep her from abject poverty in her old age. If they cannot claim benefits then this money will be depleated rather quickly.

 

Your help would be appreciated.

 

Thanks

[reallymadwoman]

The savings will count as capital for any means tested benefits unfortunately. Will your step dad qualify for any non means tested benefits, e.g. incapacity benefit?

[sydbarrett]

Ellie May

Would it be possible for your mum to "give" away her money to a trusted family member (yourself for example ?) then you or whoever "give" it back when your step dad is able to go back to work ?

£16000 is hardly a lot of money to get by on these days and it really annoys me that benefits are refused to people who have been prudent enough to save for their future.

In my opinion if you have too much money to be entitled to any benefits that you have been paying N I contributions towards then you should be exempted from paying that percentage of your N I contribution that goes towards those benefits

[reallymadwoman]

Be very careful with the above suggestion. If DWP find out that you've deliberately deprived yourselves of capital, means tested benefits will be refused or even worse you could be accused of benefit fraud.

[enamae]

Ellie May

Would it be possible for your mum to "give" away her money to a trusted family member (yourself for example ?) then you or whoever "give" it back when your step dad is able to go back to work ?

£16000 is hardly a lot of money to get by on these days and it really annoys me that benefits are refused to people who have been prudent enough to save for their future.

In my opinion if you have too much money to be entitled to any benefits that you have been paying N I contributions towards then you should be exempted from paying that percentage of your N I contribution that goes towards those benefits

 

I can't believe you're advising someone to commit a deliberate act of fraud.

[postggj]

just a sugestion

 

would it be possible to tie mony up in some savings bond

you would then declare it but in truth, you cant withdraw it for twelve months, so its not ready cash

 

just a sugestion, dont know the legal aspect of this

[JonCris]

1st as already advised do not just give it to anyone. You could make a gift which brings it below the current threshold

 

You must speak to a reputable financial adviser who will advise you to place your money into a trust from which you can only withdraw capital to pay for goods such as cars, tv, fridge, home improvements, holiday etc

 

Either the above or wait to claim once the capital is below the threshold

 

Once in trust what you must not do is use any of the money to pay household bills & this way you can quite legally claim benefits if your remaining income justifies it

[Ellie May]

Hi all

 

Thanks very much for the prompt responses. Just a couple of further questions if you please, with the Trust suggestion Joncris, would this not be the same thing as 'giving' the money away i.e. deliberately depriving yourself of capital? Same with the Savings Bond suggestion?

 

Obviously I am keen to avoid my mum having to use all her savings to tide them over, especially when this is the first time my step dad has been absent from work in his entire working life (and he is 55) however obviously i don't wnat them doing anything dodgy.

 

Thanks again

[JonCris]

No it would not for the reasons I have given

 

If in doubt I strongly advise you speak with an independent financial adviser

[sallysas]

Joncris may well be right but to me capital is capital wherever it is and will be taken into account.

 

You say your mother does not get a full state pension. I suggest she contacts the Pension Service and enquires about Guaranteed Pension Credit. I know for a single person your income has to be £120 per week (approx) so if her income is less than that it suggests to me that she qualifies. This is a strange anomoly (which I don't understand but can report as fact in my job as a processing officer for housing and council tax benefit) that some people receiving guaranteed pension credit have savings above £16000 and these are not counted.

 

Might your step-father qualify for disability living allowance or incapacity benefit? DLA is disregarded as income.

 

Yes, pension credit is my recommendation for the 1st port of call. All the best to your Mum.

[JonCris]

A trust will not be taken into account provided none is used to pay household bills.

 

In addition where benefits are concerned there is no rule which stops a person giving a gift or gifts of money to others provided it is s true gift without condition

 

Anyway rather than take the contradictory advice being offered here I suggest you seek the advice of an independent financial adviser or private client solicitor. Both should offer a free consultation

[gizmo111]

Pages 97 and 101 are relevant in this document

[JonCris]

I strongly advise speaking to an independent financial adviser or private client solicitor