Paying back Benefits

[DaveRobinson46]

Hi all, hope you can help me with the best course of action for my predicament.

 

I have been out of work for nearly 2 years and now and have been claiming JSA and housing benefit. Late last year, my parents gave me some money to get me a car (to help me get a job as I seemed to be turning work down due to lack of my own transport) and pay off a huge debt that had been acquired from a previous relationship. I did not declare this money (very stupid in hindsight) and continued to receive my benefits.

 

I recently stopped receiving my benefits due to a few days break abroad. I have since not re-applied for benefits and am wracked with guilt over what I have done and it is causing me to not sleep. I currently have sufficient funds left to be able to pay back what I was paid from the time of my parents gift until I stopped receiving my benefits.

 

What I really want to know is what will happen to me if I declare these facts and offer to pay back the money I should not have received and what is my best course of action.

[Life-Goes-On]

To give you the best advise hgow much did your parents give you, how much went on car, how much on debt, and how much you still got?

[DaveRobinson46]

I received 50k, spent 17k on a reliable car (including insurance etc), spent 13k on clearing debts and got about 6k left now

[phoenix11]

I think you need to get some legal advice on this because that's a lot of money to not declare.

 

How long ago was it paid - ie how long were you still in receipt of benefits after you'd received the gift?

[DaveRobinson46]

Was about 4-5 months receiving benefits when I shouldn't have, I know it is a lot but didn't realise it made that much difference as it was a gift, I know now that it was the wrong thing to have done and feel really bad about it that is why I am looking for advice, but it would need to be free as need to keep the money to pay back the benefits I should not have received, will set up appointment with the CAB and take it from there.

[Life-Goes-On]

One question that will be raised when calculating your overpayment will be did you have you pay off your debt straight away, or did you do it just to totally clear it?

 

I do have sympathy with you, as if you took advice before hand you could have avoided the problems.

[leemack]

Was it a gift or loan?

[DaveRobinson46]

It was a gift, technically no I didn't have to pay it off in one go but felt obliged to and wanted to finally be debt free for the first time in a long while in my life. But now through my own naivety/stupidity I have incurred more debt and just want to get back to zero even if it means I have nothing left.

[leemack]

You have two problems.

 

Firstly, you have committed benefit fraud, and will have an overpayment to pay back. The best way to handle it is to come clean and offer to pay the money back. These things will usually get found out and the consequences are far more severe if they find it out, rather than you volunteer the information.

 

Secondly, You may have issues with benefit claims in the near future. This is because on claiming, the DWP/LA may consider you to have deprived yourself of capital, and may calculate your claim as if you still possessed most of the cash. You would then have to appeal and try to prove that your intent was not to deprive yourself of capital in order to continue claiming benefits.

[jadeybags]

It's weird, the last few days a few threads have been very similar. Not totally, but I have picked up a definate link. Seems you're not alone in this predicament. Have a look on this forum as I say, there are a couple more threads at least that relate to the same thing. Money as gifts...

[Life-Goes-On]

What is sad that with a bit of advice it could all have been avoided.

 

Parents pay off loan directly and buy then give car to OP.

Give OP £6K

 

OP declares £6K but as long as that's all the money OP has then gets full benefits.

[phoenix11]

I'm not sure that is correct, LGO.

 

I believe that even if the OP's parents had paid that sum of money to pay off the debts, the OP should still have declared it and that would have affected his benefit entitlements.

 

Also, the JC might have allowed him to be given a car for a grand or so, but £17k??? That's way more than a reliable car just to improve the possibility of getting a job.

 

The DWP will want to know where all the rest of the money went too so I think the OP really does need to get some proper advice and bite the bullet to sort this out, asap.

[Life-Goes-On]

You could be right about the car, but have the DWP have a rule for gifts?

 

But with the loan, I would be surprised as the money was never his to declare. You could say he now owed his parents.

[leemack]

What is sad that with a bit of advice it could all have been avoided.

 

Parents pay off loan directly and buy then give car to OP.

Give OP £6K

 

OP declares £6K but as long as that's all the money OP has then gets full benefits.

 

If you add it up, there's also an unaccounted for 14k.

[DaveRobinson46]

Who are the best people to ring to sort out paying back what I shouldn't have claimed, is it via the 'benefit fraud' line or should I go into my local JobCentre Plus office, also am I likely to get any decent advice if I go to CAB ? Thanks for the replies so far, just want to get this sorted.

[Nystagmite]

Council / LA for housing benefit and DWP for JSA. Remember - if you were on contributions based JSA, your savings don't matter.

[leemack]

Who are the best people to ring to sort out paying back what I shouldn't have claimed, is it via the 'benefit fraud' line or should I go into my local JobCentre Plus office, also am I likely to get any decent advice if I go to CAB ? Thanks for the replies so far, just want to get this sorted.

 

If you can get a welfare rights caseworker to help, or if you have a good CAB in your area, that would work. Otherwise the best approach is to type up a letter and send it to the departments you were claimimg from - as Nystagmite indicated above. You can take the letter into the Local Authority and get a receipt. Post the other letter to the DWP benefit delivery centre dealing with your claim - the address will be at the top of any letters you received about your claim.

 

Good on you for trying to sort this out now and pay back your debt. Too many people stick their head in the sand until they get a letter from the fraud team.

[phoenix11]

I would at the very least try and talk to the CAB before you do anything.

 

I'm not sure that it's correct about contributions based JSA either because it was not what I was told when I went on it last year.

 

However, there is a clear requirement to inform the DWP/JC of any change of circumstances, and that includes receiving what would be consdered a signficant sum of money.

 

 

Also, just to ensure there are no other issues with the situation, maybe check out the tax implications for gifting that sum of money. Better to have all the facts first before you open the inevitable can of worms.

[leemack]

contribution based JSA is not affected by capital.

[DaveRobinson46]

I have since spoken with the CAB and they could not offer me any help directly but put me in touch with Community Legal Advice. I am still unsure about what to do next, will read the paperwork from CLA when it arrives. I have read elsewhere on this forum that they 'rub their hands with glee' at a confession and am still severely worried and losing sleep/not eating properly with regards to what will happen to me and what I should do next. Should I really ring them and admit what has happened, from what I have read they will not allow me any benefits so how am I supposed to live and pay my rent etc and before somebody says I should have thought about this before I KNOW that now.

[phoenix11]

Dave - if you are still currently not receiving benefits, my advice would be to wait for a few more days to see what the CLA come up with.

 

In the meantime, you need to sit down and itemise where all the money has gone because they will want to know. If you still have that car, you may well need to think about selling it because one way or another, if it hasn't helped you get a job, and you don't have the money to pay for living with no benefits, then the car becomes an unaffordable luxury.

 

The other people you need to tell are your parents for a number of reasons. a) they deserve to know that they're throwing good money away and may want to have time to consider if they can, or if they will, help you again. The JC may even suggest that you will have to apply to your parents (or friends etc) to live without benefits if your benefits are withheld. b) I am not sure about the tax implication, but the last time I knew about it, the tax-free gift threshold was £3,000 per annum, or £6,000 for the first gift if one had not been given in the previous tax year. Whilst there may be ways around the tax, as this 'gift' is going to come to light, your parents may prefer to know so they can ensure that there is no liability upon them.

 

In the meantime, no point in fretting - you're doing the right thing by moving this along as best as you can to get it all cleared up. So, step back and chill. Work on your finances to cut your outgoings to a minimum so you can show you're bringing things back under control.

 

And - keep looking for work - focus on that more than anything because that's what will get you out of the dumps.

[Life-Goes-On]

Parents / grandparents can give whatever they like although Inheritance Tax might apply if they die within 7 years. (not in this case with £50K)

[flumps1976]

It is the Benefit Centre that you will need to speak to. You can either put your case in writing or speak to them.

They will need to to te knoe the date you received the money and will require you bank statements to show how the money decreased. You will also be asked to provide receipts for any purchases made.

 

Several years ago I had to sit with my section supervisor and sort through several carriers bags of receipts putting them into date order and photocopying them before returning them to the customer. There is a calculation called "diminishing capital" which is calculated by the section leader and they have to look at what expenses youincurred, what you paid out and if any of the bills you paid were essential, e.g. you mentioned debts that you had, were those companies about to take you to court or did you decide to pay off the debts, it could be deemed that for benefit purposes you deemed as still having that cash as it was not an urgent essential item that had to be paid immediately.

e.g you have a mortgage for £15k but also have arrears of £2k, your lemder could request immediate payment of the arrears but not for te outstanding balance, if you then paid off the mortgage you could be deemed as depriving yourself of £15k.

I cannot remember how the calculation is made sorry but the team leader will look at what you acceptable living costs could have been for the period of time in question and will then calcualte how long that £50k should have lasted if you were not in receipt of JSA and you will not be eligible for any further payments until that date has been reached.

You should be given copies of how the decision was reached so that you can know wher you might need to request a reconsideration if there is a part you don't agree with.

 

I wish I could remember what is allowed and how te calculation is made but only coming across 1 case in my processing days it just didn't stick in the brain sorry.

[Life-Goes-On]

Flumps, the OP did say the he didn't have to pay off the debts, but felt obliged too.

So I would guess they could class that as depriving yourself of capital