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Hi All

 

My mother is 80 and has just sold her house and moved into a sheltered home. The cost of this is actually a bit more than her pension income, and as her savings will be significantly over £16,000 she will have to live off her savings until going below the £16,000 when she will hopefully get some help with the rent.

 

She has around £85K and wants to give me £20K as a gift. She is worried about the DSS seeing this gift and then not giving her any help if the future when she needs it. I don't think she would need to worry about this for 10 years or more, but I need to look into it for her. If she made a claim in the future, does anyone know how far back a means test would go?

 

Thanks

 

Charlie

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The councils can go back 7 years and could class it deprivation of assets we are fighting a claim now will cost us about five thou but again you will need to show this gift because the council will inform. The dwp as far as I can recollect

http://www.consumeractiongroup.co.uk/forum/welcome-consumer-forums/107001-how-do-i-dummies.html

 

 

 

 

Advice & opinions given by patrickq1 are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional

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Thanks Patrick. Does it have any relevance what the gift is for? ie, if I could show that it was to stop a potential repossession?

 

I don't think that she would spend the money in less than 7 years anyway to be honest, but we need to to be sure.

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Also, does any one know if there is a sliding scale over the 7 years, similar to Inheritance Tax? ie if she claimed in 5 years time, would they include a smaller amount of the gift than they would after say one year?

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Hello there.

 

I'll see if I can find someone who knows about this stuff, but I also think you need to be careful about deprivation of capital. My understanding is that it's not about who the money goes to, it's that person whose money it is/was is trying to claim off the state for something they could have paid for with said capital. Sorry.

 

My best, HB

Illegitimi non carborundum

 

 

 

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Thanks HB

 

Would that matter though if it was outside of the 7 years?

 

Honestly, I don't know. I suspect though that 7 years is an IHT thing as you said rather than a local authority one, as I believe they have rather wide-ranging powers.

 

I've sent an SOS to try to get you some informed help.

 

HB

Illegitimi non carborundum

 

 

 

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For a person is claiming benefit or will be in the future, the issue of giving capital away can be quite a minefield.

 

The social security system is aimed at those who do not have the income or capital to meet their living costs, and the system expects those with the income/capital to use it before claiming benefit.

 

Most means tested benefits have upper capital limits, for example in HB/CTB/IS/JSA(ib), you are not entitled to any assistance if your capital exceeds £16k. If a person gives away capital and the DWP/LA consider that one of the reasons for giving it away was to either secure or increase benefit entitlement, then the DWP/LA may decide to treat that person as if they still held that money.

 

Does your mother have any other income other than her SRP?

Does she receive Pension Credit? If so, is it Guarantee Credit or Savings Credit?

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Thanks for the answers.

 

Her only income is pension and Widows pension, with no pension credit. So I believe that the council can only go back a maximum of 7 years and if we could prove that it wasn't for deprivation of assets and for a goo reason that we could prove, then it could be ignored within 7 years?

 

That's really helpful, thanks again

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seven years is not relevant, as there is no stated period in the legislation

 

the issue is whether one of the reasons for disposing of the capital was to secure or increase benefit entitlement

 

if you can demonstrate this was not the reason, then a claim could be made right away - however if a claim was made straight after disposing of capital, this would make it appear that disposal was to gain benefit - i hope that makes sense

 

in my opinion, giving away 20k out of 85k is unlikely to be viewed as deprivation, unless other large sums are also disposed of and a claim made soon after

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