Is this benefit fraud?

[Lau88]

My mother has fairly severe mental health problems that prevent her from working (bipolar and borderline personality disorder). She is in receipt of benefits due to her inability to work. Her father, my grandfather died leaving her £30,000. She does not want the money and wishes to give it to me to set me up for life and for my future. Once her cheque clears in a few days time she wants to give the money to me the same day.

I am worried sick that this is benefit fraud and do not want her to get into trouble.

I've tried to convince my mum to keep the money but she is flat out refusing and says she wants me to be able to put a deposit down on a house.

Any advice?

[antone]

It is probably not fraud, as such, but it could possibly endanger her future benefits if she's deemed to have given away money she could have used to live on.

 

That won't always be the case, though. To give a better answer, we'd need to know what specific benefits she receives.

[Lau88]

It is probably not fraud, as such, but it could possibly endanger her future benefits if she's deemed to have given away money she could have used to live on.

 

That won't always be the case, though. To give a better answer, we'd need to know what specific benefits she receives.

 

Many thanks for replying so quickly!

I'm not 100% sure but I believe she receives DLA, housing benefit and about £100 weekly but I'm not too sure what benefit that is.

[id6052]

If your mother is in receipt of a means tested benefit, she should notify the department who pays/awards her benefit of the fact that she has received £30k, she should also notify them if she gives the money away to you. If she does not tell them, that could be deemed benefit fraud.

 

Also if she gives away money that she could have lived on, the department dealing with her benefit could treat her as if she still had the money, although as Antone said, this will depend upon what benefits she is receiving.

[antone]

Well, it should not affect her DLA at all. However, her HB and whatever other payment she receives might (and I stress might) be affected, depending on what it is. Note that whatever happens, giving away her money is not fraud unless she tries to hide it from the DWP or council. She's entitled to do what she likes with her own money, but there is a concept known as "deprivation of capital" that affects some means tested benefits.

 

The idea behind deprivation is that one is expected to use one's own resources to support oneself before applying for help from the state. So if she gave away money, the DWP might see that as deprivation and treat her as still having the money and so stop or reduce her payments.

 

Now as I say, this doesn't apply to all benefits, so it would help to know specifically what she claimed. Off the top of my head, Income Support, Employment and Support Allowance and Jobseekers Allowance could be affected, as well as Housing and Council Tax Benefits. It will not affect any benefits that are paid based on her National Insurance Contributions.

[Lau88]

It seems harsh that she could get in trouble for wanting to help her daughter. If we don't report it will they find out anyway?

It looks like i'm going to have to persuade her to keep the money, her benefits will get stopped and she'll live off it until it runs out. Meanwhile i'll struggle to save enough money for a deposit on a house. It doesn't seem fair really!

[Lau88]

Well, it should not affect her DLA at all. However, her HB and whatever other payment she receives might (and I stress might) be affected, depending on what it is. Note that whatever happens, giving away her money is not fraud unless she tries to hide it from the DWP or council. She's entitled to do what she likes with her own money, but there is a concept known as "deprivation of capital" that affects some means tested benefits.

 

The idea behind deprivation is that one is expected to use one's own resources to support oneself before applying for help from the state. So if she gave away money, the DWP might see that as deprivation and treat her as still having the money and so stop or reduce her payments.

 

Now as I say, this doesn't apply to all benefits, so it would help to know specifically what she claimed. Off the top of my head, Income Support, Employment and Support Allowance and Jobseekers Allowance could be affected, as well as Housing and Council Tax Benefits. It will not affect any benefits that are paid based on her National Insurance Contributions.

 

Thank you for your reply. I'll find out from her tomorrow exactly what benefits she's receiving! It's all a bit frustrating at the moment. She really wants to give it to me but I don't want there to be any repercussions for her.

[antone]

It seems harsh that she could get in trouble for wanting to help her daughter. If we don't report it will they find out anyway?

It looks like i'm going to have to persuade her to keep the money, her benefits will get stopped and she'll live off it until it runs out. Meanwhile i'll struggle to save enough money for a deposit on a house. It doesn't seem fair really!

 

If she's on a means tested benefit and she doesn't report it, that would be fraud. I can't really advise on her chances of getting away with it, because CAG cannot condone such things. Suffice it to say that the chances of being caught are significant. This is not a route she wants to go down.

 

I am sympathetic, so I hope that didn't sound harsh. It wasn't intended to be, but I don't want to see anyone get into trouble.

 

There are cases of money being placed in a trust fund in order to maintain entitlement to means tested benefits, but if she wanted to think about that she'd want to seek the help of a suitably qualified solicitor to see if it were possible.

[antone]

Thank you for your reply. I'll find out from her tomorrow exactly what benefits she's receiving! It's all a bit frustrating at the moment. She really wants to give it to me but I don't want there to be any repercussions for her.

 

Yes, more information about her benefit would certainly help us give better advice. We'll be around tomorrow

 

Edit - one other question: how old is she?

[Lau88]

Yes, more information about her benefit would certainly help us give better advice. We'll be around tomorrow

 

Edit - one other question: how old is she?

 

She's 54!

Thanks again for the replies. It is greatly appreciated. I understand this system is in place to protect the tax payer, of which I am one It's just a tad frustrating!

I'll reply tomorrow once I find out exactly what benefit's she is on.

[BanditQueen]

It is not fraud as she has mental health problems and cannot be judged to have made the decision in her right state of mind. If you are being given the money: then it is now your money and not your mother's money. There is no reason why they should know anything about it, and if your grand mother intended you to have the money, then your mother is just a temporary custodian of the money that is meant for her. How long is she to have the money; a couple of days at most? The DWP can go to hell for a couple of days. In any case some inherited money is not seen as income or taxable. If you have the money directly sent to you then the money is no longer her property and it is now you money. It is not fraud: the money belongs to you the moment it is transferred to you name. I would not give it another thought and you cannot be seen to have given away money you are meant to live on as her mental health problems may preclude her from doing this in her right mind. Accept the money and you can always use it to help your mum when you need it.

 

Cheers

[antone]

It is not fraud as she has mental health problems and cannot be judged to have made the decision in her right state of mind. If you are being given the money: then it is now your money and not your mother's money. There is no reason why they should know anything about it, and if your grand mother intended you to have the money, then your mother is just a temporary custodian of the money that is meant for her. How long is she to have the money; a couple of days at most? The DWP can go to hell for a couple of days. In any case some inherited money is not seen as income or taxable. If you have the money directly sent to you then the money is no longer her property and it is now you money. It is not fraud: the money belongs to you the moment it is transferred to you name. I would not give it another thought and you cannot be seen to have given away money you are meant to live on as her mental health problems may preclude her from doing this in her right mind. Accept the money and you can always use it to help your mum when you need it.

 

Cheers

 

This is not correct.

 

First off, not everyone who has mental health issues is incapable of managing their own affairs. Secondly, inherited money most certainly is regarded as capital (not income) by the DWP for the purposes of means tested benefits. Whether it's taxable or not is neither here nor there. Thirdly, the main concern here is deprivation of capital, not fraud.

[matt v atos]

If she get a taxi to her bank gets the money out gives it to the dogs home what happens then !

[antone]

If she get a taxi to her bank gets the money out gives it to the dogs home what happens then !

 

She'd probably be deemed to have deprived herself of capital. Or at least, it's possible. Deprivation is a complex issue but yes, giving away money that you could use to live on can certainly be an issue where means tested benefits are concerned.

 

If she gave it to the dogs' home without declaring it to the DWP or council, it could be seen as fraud.

[id6052]

If she get a taxi to her bank gets the money out gives it to the dogs home what happens then !

 

the dogs home gets £30k, and lau88's mother might get treated as depriving herself as capital resulting in: -

 

1. all benefits except for DLA being stopped for years
   
2. lau88's mother getting evicted as she would not be able to pay rent for her home
   
3. even if she finds somewhere to live rent free, still not having enough income to feed herself
   

the consequences of being found to have deprived your self of capital can be very extreme, so not a decision to be made lightly

[matt v atos]

Yes if she has told them she has £3000 in bank I understand she has not told them about this so far !

[antone]

Yes if she has told them she has £3000 in bank I understand she has not told them about this so far !

 

I don't understand this post. The amount in question is £30,000, not £3000. That's significant - amounts below £6000 don't normally affect means tested benefits.

 

In addition to id6052's post, if the person in question attempts to conceal this money from the DWP, then all of the consequences he listed may happen plus I would add:

 

4. Criminal prosecution for benefit fraud

[matt v atos]

I don't understand this post. The amount in question is £30,000, not £3000. That's significant - amounts below £6000 don't normally affect means tested benefits.

 

In addition to id6052's post, if the person in question attempts to conceal this money from the DWP, then all of the consequences he listed may happen plus I would add:

 

4. Criminal prosecution for benefit fraud

 

My point was how wold DWP know about this money in her bank !

[antone]

My point was how wold DWP know about this money in her bank !

 

Credit reference agencies. Random compliance checks (where they ask to see bank statements). A new claim to a new benefit sometime in the future. There are other ways.

 

In any case, I'm not going to let someone come here to CAG and be advised to commit benefit fraud, whether or not they'd be caught.

[matt v atos]

Thank you for that "Credit reference agencies. Random compliance checks (where they ask to see bank statements). A new claim to a new benefit sometime in the future. There are other ways"

 

Thank you. for your info

[id6052]

The government also carries out data-matching of bank records against DWP/LA/HMRC records

[antone]

Thank you for that "Credit reference agencies. Random compliance checks (where they ask to see bank statements). A new claim to a new benefit sometime in the future. There are other ways"

 

Thank you. for your info

 

No problem. Just remember that you must use this new found information for good, not evil.

[matt v atos]

So when do all them checks Kick in compliance checks Random and compliance checks I was not aware of this

[antone]

So when do all them checks Kick in compliance checks Random and compliance checks I was not aware of this

 

A number of claims are selected at random for Compliance checks. It's done by computer.

 

In any case, we are not here to advise people on how best to commit fraud, and in fairness to Lau88, he or she has not asked us to do so. The request was about how to deal with a particular situation which does not involve any fraud at this time. Let's keep it that way.

[abc123def]

lau, unfortunately she will have to legally keep it and use it to live on, if she fails to declare it then it is fraud and she could lose her benefits and be prosecuted if she is found out. Once the amount she has goes below a certain level she will receive benefits again. She is allowed to use the money for certain luxuries though, she can buy a car, have a luxury holiday, or several smaller holidays, buy new furniture, decorate, etc. A friend of mine received £46,000 as a share of the FMH after a divorce and she went to the US, bought a landrover, all with full knowledge and acceptance of the DWP and LA as part of her money. I think her money lasted one year before she was back on benefits.