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inheritance and benefits


lancydancy
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Hi all,

 

Firstly, I'd like to say that I am not trying to defraud anyone, I just want some advice!

 

Right, I am disabled, and currently work part time, self employed. I have 3 children.

I claim some housing benefit, council tax benefit and tax credits and DLA.

I have 35k of debt.

I'm about to inherit a sum of approximately 18 - 20k. Originally, I thought I could clear my debts with full and finals but obviously I know I have to inform benefits office and my benefits will be reduced / stopped.

Daft question but am I allowed to use this money to clear my debts? Or will I be expected to live off it?

Like I said, I'm not trying to defraud anyone, I just need to know where I stand.

 

Many thanks

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Hi all,

 

Firstly, I'd like to say that I am not trying to defraud anyone, I just want some advice!

 

Right, I am disabled, and currently work part time, self employed. I have 3 children.

I claim some housing benefit, council tax benefit and tax credits and DLA.

I have 35k of debt.

I'm about to inherit a sum of approximately 18 - 20k. Originally, I thought I could clear my debts with full and finals but obviously I know I have to inform benefits office and my benefits will be reduced / stopped.

Daft question but am I allowed to use this money to clear my debts? Or will I be expected to live off it?

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The funds won't affect your DLA , and only any interest accrued on it would affect tax credit. But for housing benefit and council tax benefit the funds would affect entitlement. When funds like these are recieved they need to consider whether any spends are reasonable and necessery. It would depend on what the debts are for. Generally speaking, if it is used to pay off debts which are considered to be priority debts then that spend would be considered reasonable and necessery. If it is used to pay off a debt that is considered non priority it could be considered "deprivation of capital" - which is where any claim to income based benefit can be treated as if you still had the money and entitlement reduced/extinguished accordingly.

  • Haha 1

My advice is based on my opinion, my experience and my education. I do not profess to be an expert in any given field. If requested, I will provide a link where possible to relevant legislation or guidance, so that advice provided can be confirmed and I do encourage others to follow those links for their own peace of mind. Sometimes my advice is not what people necesserily want to hear, but I will advise on facts as I know them - although it may not be what a person wants to hear it helps to know where you stand. Advice on the internet should never be a substitute for advice from your own legal professional with full knowledge of your individual case.

 

 

Please do not seek, offer or produce advice on a consumer issue via private message; it is against

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(exceptions for prior authorisation)

 

 

 

 

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Thanks for the info. This is what I thought, and my debts are mainly credit cards and bank loans so I assume these are non priority.

However, I do have an overpayment of tax credits debt (which I dispute) but they are adamant. Is this a priority debt? Not that it'll make that much difference but I'd really like to be debt free.

Kind regards

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Moved to the Benefits Forum.

Anthrax alert at debt collectors caused by box of doughnuts

 

Make sure you do not post anything which identifies you. Although we can remove certain things from the site unless it's done in a timely manner everything you post will appear in Google cache & we do not have any control over that.

 

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Ok the limit on capital is £16000.00, if you get this amount or more you have too much capital to claim the means tested benefits. In my limited experience in capital deprivation capital cases it is likely that because recieved a lump sum in excess of this amount, all your means tested benefits will end.

 

If you then spend a proportion of it and reclaim, your claim will be sent to a decision maker. This is a person who looks at things like capital, other properties ect, they will look at case law and commissioners decisions on previous cases to decide if you have deprived yourself of capital in order to claim benefit.

 

Basically they will look at how "reasonable" it is for you to dispose of your capital and then claim benefits to support you.

 

They will look to see if there was a already a payment plan in place, if there is it is unlikely they will consider paying a full and final payment "reasonable" as there was already something viable in place.

 

I know it seems bad that the DWP scrutinise how you spend your capital but they do have to check that people with savings over the limit are not being paid benefit they are not entitled to.

 

I hope this helps

Advice given is my opinion only, I am not a legal or financial expert (far from it).

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