Income Support and max bank balance

[overdone]

I will soon be being left money from a Will to the sum of 11 thousand. What can I spend it on and still keep some so it does not affect Income Support?

Edited November 28, 2015 by overdone
typo

[antone]

This is a tricky question, really. To be safe, I'm going to give you the "official" answer, but please note that I am not making any judgements. We just have to be a bit careful.

 

The basic answer is that if you have savings, you are expected to use them to live on. As such, money would be deducted from your weekly IS payment - about £20 in this case. That's the rate at which you're expected to use up your savings. In many cases, if you spend money unnecessarily in order to secure entitlement to benefits, you will be treated as if you still had the money when your payments are calculated. This is known as "deprivation of capital".

 

Each case is considered on its merits - if you spend a large sum of money when in receipt of a benefit, the matter may be referred to a Decision Maker to determine whether deprivation of capital has occurred. For that reason, we can't give you a comprehensive list of things that are and are not allowed - it very much depends on your personal circumstances. However, there are a few things which would not normally be considered to be deprivation. Essential household repairs, for example - if you need a new cooker, heating boiler or such things, or if you need to fix a leaky roof or dodgy brickwork. If your car is falling to bits and you need a new one, this would normally be OK as well. You can repay debts as they fall due, but paying them off early might be seen as a problem.

 

Other folks might have some more examples, but you get the general idea.

[Nystagmite]

If you receive council tax support, you need to check the rules with your council. Some stop full support at 6k, for example.

 

Whatever you do, keep the receipts.

 

If you are unsure about whether something is ok, phone up and get it in writing. That way, you've got more than "but so and so said I can spend it on this".

[overdone]

I do not want to spend it on anything really but it looks like Im going to be penalized for my mums Will.

[bcham]

can you not get the money in cash and keep it under the mattress

[overdone]

I have thought of that but....

[AndyOrch]

can you not get the money in cash and keep it under the mattress

 

Not that this Forum condones Benefit Fraud

[overdone]

but... I cannot have peace of mind that way.

[Nystagmite]

Plus, it's going to look it a bit strange that one minute you had £11k put into your account and then it was withdrawn and you can't account for it. (whereas spending it on a car, household stuff, you've got the receipts for it)

[overdone]

My sister is prepared to retain it in the executors account as she maintains no one can force me to accept my inheritance.

Edited November 28, 2015 by overdone
typo

[Mr.P]

My sister is prepared to retain it in the executors account as she maintains no one can force me to accept my inheritance.

 

Unfortunately, you would still have a beneficial interest in the full amount as the money is being held in trust. If the DWP or LA found out about it in years to come, you could find yourself in real trouble.

 

If there are other family members who would benefit more from the inheritance, you could look at a Deed of Variation: In effect, giving up your inheritance and passing it on to someone else. Probably not the best thing to do... I would suggest investing in some fixed term savings bonds and use the remainder to make life a little more comfortable.

[konark]

Interesting situation, first of all a deed of variation could/would be viewed as 'deprivation of capital.'

 

AFAIAA you are not deemed to have the money until it hits your account so it can be kept within the estate. You will of course have a beneficial interest in this money, but it could be argued you have had this since the day testator died.

 

The executor of the will does not have to tell you of any forthcoming bequest so you could claim you didn't know of the legacy. How long the executor could hold off paying you is debatable but certainly a year or so from the granting of probate.

 

Your easiest choice is to take the money and tell the DWP. You can then pay of any debts, buy new household goods, clothes and a car if you fancy, you'd be amazed at the sort of spending that has been adjudged to be allowable by decision makers..If you are unsure you can always ask them formally whether spending on a certain thing would be allowable. No luxuries though; foreign holidays are probably out, definitely no tomfoolery. You should soon be below the £6,000 threshold.

[Nystagmite]

You have to be careful with paying off debts. If it's the minimum repayment, it's fine. But if it's the whole lot, that could be seen as deprivation. There's something about it reaching court.

[flumps1976]

Usually repayment of debt is only accepted if it was deemed that the debt had to be repaid with immediate effect by the lender.

Very little is deemed as an essential these days, a holiday would be classed as luxury unless a Doctor wrote a letter stating it was essential for the state of your health, new furniture you may have to prove that your existing furniture was no longer for for purpose.

If you do decide to pay anything off then keep receipts and be prepared to defend why you spent the money, you find it isn't allowed and you are still treated as having the capital.

[konark]

Bank overdrafts are deemed to be repayable immediately.

 

Why doesn't your sister give you an interim payment of £5,400 (not notifiable to DWP) which you can spend on living expenses, upgrading appliances etc , when that is gone she can make a final payment of £5,400 , then you will never be over the threshold.

[overdone]

Is this info correct though?

[antone]

Bank overdrafts are deemed to be repayable immediately.

 

Why doesn't your sister give you an interim payment of £5,400 (not notifiable to DWP) which you can spend on living expenses, upgrading appliances etc , when that is gone she can make a final payment of £5,400 , then you will never be over the threshold.

 

Bad idea. All savings, even those below the threshold, are notifiable to the DWP and a scheme like this would be noticed eventually. And when it is noticed, it wouldn't be good news for the OP.

[Nystagmite]

Wouldn't that look suspicious?

[antone]

Wouldn't that look suspicious?

 

It is pretty much the definition of "suspicious".

[konark]

Changes in savings are not notifiable unless the amount goes over £5,500. The amount that people have in the bank changes virtually every day so smaller changes are not notifiable.

Stating the exact amount of savings is usually only done when applying for benfits, you'll always be below the threshold anyway.

 

An executor has great leeway to distribute an estate when and how they want, as long as it complies with the terms of the will. Interim payments are commonly given to beneficiaries, as sometimes monies must be witheld by the estate for a fixed period to satisfy any potential liabilities.

 

The question should be is it lawful not whether it is suspicious. I'll admit it is pretty slippery but probably no more than many tax-avoidance schemes like bed and breakfasting. If any member can see a flaw in the strategy I'd be grateful for their opinion.

[mikeymack2002]

Having read this thread over the past few days, I am surprised to see that you are still trying to find ways to avoid notifying the DWP IF you get this windfall.

 

Asking members to assist you is not the best thing to do is it? The point of law that you seem to not see is that if you come in to a large sum of money and fail to disclose this then you could face a criminal investigation by the DWP.

 

This could see you getting a record, sanctions, a civil penalty or even losing your benefits all together. If this is what you want then by all means carry on. I will add a link to what you must declare shortly..

[Nystagmite]

Claimants must ensure that they declare all savings and capital to the DWP when claiming these benefits.

 

http://www.merton.gov.uk/advice-benefits/benefits/hb-ctb/benefitsclaim/hbctbsavings.htm

[antone]

Changes in savings are not notifiable unless the amount goes over £5,500. The amount that people have in the bank changes virtually every day so smaller changes are not notifiable.

Stating the exact amount of savings is usually only done when applying for benfits, you'll always be below the threshold anyway.

 

An executor has great leeway to distribute an estate when and how they want, as long as it complies with the terms of the will. Interim payments are commonly given to beneficiaries, as sometimes monies must be witheld by the estate for a fixed period to satisfy any potential liabilities.

 

The question should be is it lawful not whether it is suspicious. I'll admit it is pretty slippery but probably no more than many tax-avoidance schemes like bed and breakfasting. If any member can see a flaw in the strategy I'd be grateful for their opinion.

 

The £5,500 limit is the point at which the DWP will ask for proof of savings - if you declare a lower amount they will normally just take your word for it. It's not that you're not required to notify them of any lower amount - you should tell them about everything, within reason.

 

On the second point, "lawful" doesn't really enter into this. It's perfectly legal to receive an inheritance and spend it on whatever you want - the issue is Deprivation of Capital, which is not a crime. However, attempting to hide savings could well be an offence, and you can't assume it's OK not to tell the DWP just because you've contrived to keep the amounts below some arbitrary figure.

[overdone]

How long does money have to sit in a bank acc to be considered saved?

Edited December 6, 2015 by overdone
ty

[konark]

I'll respond to your points;

 

mikeymack2002- nothing I am suggesting is illegal so sanctions and criminal records don't enter into it. And if 'Asking members to assist you is not the best thing to do is it?' what is the point of this forum?

 

Nystagmite- your link says nothing to refute my argument, you must declare your capital when you claim, but as long as you remain under £6,000 you don't have to tell them about changes. But its a moot point anyway.If you wish you can send the DWP, or whoever, a daily update of your bank balance because in my plan it will always be under £6,000.

 

antone-You say that 'lawful doesn't enter into it', but what is lawful or not is the whole point of the argument. I agree the £6,000 threshold is an arbitrary figure, but it is the DWP's arbitrary figure so it has effect in law. 'Contriving ' to keep your capital under £6,000 is not an offence any more than 'contriving 'to keep your speed under 30mph whilst passing a speed camera. The bottom line is that if you are paid in 2 instalments you never go over the threshold so you never lose entitlement to means-tested benefits.