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Incapacity benefit and lump sum
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# 1
josoph
Old 23-05-2012, 9:51 AM
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Question Incapacity benefit and lump sum

Just wondered if anyone is able to shed some light on my situation.I am currently on incapacity benefit long term,for which I receive 221.70 every fortnight.I have been granted a pension from my employer.I am able to take a lump sum of roughly 17k tax free and then a monthly payment thereafter.
I am aware that if you have savings of over 9k you need to advise benefits and also housing and council tax benefit.If I would like to give my daughter some money and buy her a car,meaning I will have under the 9k.Am I able to do this??? Not sure if I will be penalised as I did have more than the limit originally.
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# 2
McKneff
Old 23-05-2012, 10:16 AM
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Google 'deprivation of assets' that should answer your question.

In short, if you give your money away, you will still be assessed as if you still had it.
No one can make you feel inferior without your consent
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# 3
Dunroamin
Old 23-05-2012, 10:40 AM
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Although deprivation of capital shouldn't be an issue with IB, that will change when you move to ESA and could be a problem then.

Don't forget that, although IB isn't means tested, it will be affected when you start receiving your pension and could disappear altogether.
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# 4
zaksmum
Old 23-05-2012, 10:52 AM
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I thought long term incapacity benefit was not means tested...?
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# 5
McKneff
Old 23-05-2012, 10:54 AM
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I would think with a 17K lump sum (and Im only guesstimating) that your pension is going to be less than around 350 a month which is when it starts affectin your IB (going from my own experience) but hey, legislation seems to change on a daily basis.

If youclaim any means tested benefits I would be cautious about giving your money away.
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# 6
McKneff
Old 23-05-2012, 10:56 AM
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Quote:
Originally Posted by zaksmum View Post
I thought long term incapacity benefit was not means tested...?

It isnt means tested but private pension income can affect it.
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# 7
zaksmum
Old 23-05-2012, 11:04 AM
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Oh, thanks Mckneff, I was worried there for a minute!
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# 8
Mojisola
Old 23-05-2012, 11:26 AM
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Quote:
Originally Posted by josoph View Post
Just wondered if anyone is able to shed some light on my situation.I am currently on incapacity benefit long term,for which I receive 221.70 every fortnight.I have been granted a pension from my employer.I am able to take a lump sum of roughly 17k tax free and then a monthly payment thereafter.
I am aware that if you have savings of over 9k you need to advise benefits and also housing and council tax benefit.If I would like to give my daughter some money and buy her a car,meaning I will have under the 9k.Am I able to do this??? Not sure if I will be penalised as I did have more than the limit originally.
Shouldn't that be 6k?
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# 9
jonliv
Old 23-05-2012, 11:34 AM
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Your Incapacity Benefit will not be affected by Pension Income if you satisfy any ONE of these conditions


Exceptions
This rule does not apply if:

1) you were in receipt of Incapacity Benefit before 6 April 2001,

2) your claim is made under the linking rules for Incapacity Benefit and links back to before 6 April 2001,
or

3) you receive the highest rate of the care component of Disability Living Allowance

There are also transitional arrangements in place for when you are migrated to ESA
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# 10
Dunroamin
Old 23-05-2012, 11:36 AM
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OP, do you claim any means tested benefits?
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# 11
josoph
Old 23-05-2012, 1:35 PM
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I recieve Tax credit,child benefit and Incapacity benefit.
I have had incapacity benefit for two years.Yes my pension will be about 230 a month.
So if I use this money they will still look at it as if I still have it,is that what your saying?
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# 12
josoph
Old 23-05-2012, 1:41 PM
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What if I buy a car and it is in my name? would that still be the same?
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# 13
sunnyone
Old 23-05-2012, 1:45 PM
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Quote:
Originally Posted by josoph View Post
I recieve Tax credit,child benefit and Incapacity benefit.
I have had incapacity benefit for two years.Yes my pension will be about 230 a month.
So if I use this money they will still look at it as if I still have it,is that what your saying?
You cant have been on incapacity for just two years because ESA replaced IB much more than two yeas ago, you must therefore be on ESA and the rules are diffrent.
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# 14
josoph
Old 23-05-2012, 1:55 PM
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I am on incapacity benefit as a link in claim.I had incapacity taken from me but appealed and won
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# 15
josoph
Old 23-05-2012, 1:56 PM
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sorry I should have explained that a bit more
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# 16
Dunroamin
Old 23-05-2012, 2:26 PM
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Quote:
Originally Posted by josoph View Post
I recieve Tax credit,child benefit and Incapacity benefit.
I have had incapacity benefit for two years.Yes my pension will be about 230 a month.
So if I use this money they will still look at it as if I still have it,is that what your saying?
As your pension is so small (below 85pw is the relevant figure) it won't affect your IB.

Just to be clear, you don't claim any help with your rent/mortgage/council tax?
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# 17
Dunroamin
Old 23-05-2012, 2:27 PM
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Quote:
Originally Posted by josoph View Post
What if I buy a car and it is in my name? would that still be the same?
Why are you in such a hurry to get rid of this money?
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# 18
pmlindyloo
Old 23-05-2012, 2:29 PM
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If I have understood everything correctly then your lump sum will not affect your Incapacity Benefit. Also your pension, since it is below 85 per week will not affect your IB either. So you will be able to keep your IB and your weekly pension.

As far as I know your tax credits will not be affected either.

The difficulty is that all people on IB are being transferred over to ESA. They will look at your case and decide whether you are entitled to ESA (and which group you are put into), or whether you should go onto JSA or whether you should come off benefits all together.

When this happens it might mean that your lump sum that you received may be looked at.

It is very complicated! My suggestion would be to speak to CAB (you will need a CAB where they have a Welfare and Benefits Advisor) and ask for some advice.
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# 19
josoph
Old 23-05-2012, 2:39 PM
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Thankyou Lindylou your advice is very helpful.
Dunroamin I do claim housing and council tax benefit.I am not in a hurry to get rid of the money.I am a single parent and thought it would be nice to get my daughter through her driving test and get her a car.As I am disabled it would be a great help to us both as we rely on friends at the moment.As she will be in untold debt when he goes to University,my helping her will ease a lot of the stress
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# 20
Mojisola
Old 23-05-2012, 2:44 PM
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Quote:
Originally Posted by josoph View Post
Thankyou Lindylou your advice is very helpful.
Dunroamin I do claim housing and council tax benefit.I am not in a hurry to get rid of the money.I am a single parent and thought it would be nice to get my daughter through her driving test and get her a car.As I am disabled it would be a great help to us both as we rely on friends at the moment.As she will be in untold debt when he goes to University,my helping her will ease a lot of the stress
You could be the owner of the car but insure her as the main driver.

Will she be living at home while at uni? If not, the car may not be best thing for her. Most unis have very strict rules about student parking and having a car can be a pain.
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