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  • FIRST POST
    josoph
    Incapacity benefit and lump sum
    • #1
    • 23rd May 12, 9:51 AM
    Incapacity benefit and lump sum 23rd May 12 at 9:51 AM
    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.
Page 1
    • McKneff
    • By McKneff 23rd May 12, 10:16 AM
    • 34,728 Posts
    • 44,712 Thanks
    McKneff
    • #2
    • 23rd May 12, 10:16 AM
    • #2
    • 23rd May 12, 10:16 AM
    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
  • Dunroamin
    • #3
    • 23rd May 12, 10:40 AM
    • #3
    • 23rd May 12, 10:40 AM
    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.
    • zaksmum
    • By zaksmum 23rd May 12, 10:52 AM
    • 5,369 Posts
    • 7,292 Thanks
    zaksmum
    • #4
    • 23rd May 12, 10:52 AM
    • #4
    • 23rd May 12, 10:52 AM
    I thought long term incapacity benefit was not means tested...?
    • McKneff
    • By McKneff 23rd May 12, 10:54 AM
    • 34,728 Posts
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    McKneff
    • #5
    • 23rd May 12, 10:54 AM
    • #5
    • 23rd May 12, 10:54 AM
    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.
    No one can make you feel inferior without your consent
    • McKneff
    • By McKneff 23rd May 12, 10:56 AM
    • 34,728 Posts
    • 44,712 Thanks
    McKneff
    • #6
    • 23rd May 12, 10:56 AM
    • #6
    • 23rd May 12, 10:56 AM
    I thought long term incapacity benefit was not means tested...?
    Originally posted by zaksmum

    It isnt means tested but private pension income can affect it.
    No one can make you feel inferior without your consent
    • zaksmum
    • By zaksmum 23rd May 12, 11:04 AM
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    zaksmum
    • #7
    • 23rd May 12, 11:04 AM
    • #7
    • 23rd May 12, 11:04 AM
    Oh, thanks Mckneff, I was worried there for a minute!
    • Mojisola
    • By Mojisola 23rd May 12, 11:26 AM
    • 25,944 Posts
    • 66,622 Thanks
    Mojisola
    • #8
    • 23rd May 12, 11:26 AM
    • #8
    • 23rd May 12, 11:26 AM
    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.
    Originally posted by josoph
    Shouldn't that be £6k?
    • jonliv
    • By jonliv 23rd May 12, 11:34 AM
    • 109 Posts
    • 90 Thanks
    jonliv
    • #9
    • 23rd May 12, 11:34 AM
    • #9
    • 23rd May 12, 11:34 AM
    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
  • Dunroamin
    OP, do you claim any means tested benefits?
  • josoph
    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?
  • josoph
    What if I buy a car and it is in my name? would that still be the same?
  • sunnyone
    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?
    Originally posted by josoph
    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.
  • josoph
    I am on incapacity benefit as a link in claim.I had incapacity taken from me but appealed and won
  • josoph
    sorry I should have explained that a bit more
  • Dunroamin
    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?
    Originally posted by josoph
    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?
  • Dunroamin
    What if I buy a car and it is in my name? would that still be the same?
    Originally posted by josoph
    Why are you in such a hurry to get rid of this money?
    • pmlindyloo
    • By pmlindyloo 23rd May 12, 2:29 PM
    • 9,950 Posts
    • 11,714 Thanks
    pmlindyloo
    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.
  • josoph
    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
    • Mojisola
    • By Mojisola 23rd May 12, 2:44 PM
    • 25,944 Posts
    • 66,622 Thanks
    Mojisola
    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
    Originally posted by josoph
    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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