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  • FIRST POST
    • CottonTail1322
    • By CottonTail1322 16th Sep 17, 2:13 AM
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    CottonTail1322
    Benefits, inheritance & buying a house? So confused!
    • #1
    • 16th Sep 17, 2:13 AM
    Benefits, inheritance & buying a house? So confused! 16th Sep 17 at 2:13 AM
    First post here so hope all this is ok to ask and someone can help me. I'm so confused and emotional about this but I will try my best to keep it simple.

    As a quick run through of our benefits; I get PIP at higher rate for both components, my husband gets carer's allowance and together we claim income related support group ESA, housing benefit, child tax credits for our 3 children and child benefit. My husband had to give up his career to become my carer after a rapid and steep decline in my health, it's been a tough few years and we'd resigned ourselves to the fact we'll never own our own home etc, but we are unbelievably grateful for the help we receive from benefits.

    Today we saw my husband's gran who is in the last weeks of her life due to terminal cancer, and she told us she is leaving us enough money in her will to purchase the house we currently rent (the house is also on the market to be sold, it has been for over 3 years now).

    My question is, if this does happen - and there's a possibility it won't, she's a little foggy with her memory and mental dexterity now - how would it work? If we suddenly got that amount of money in the bank and then spent it on buying the house, would that be ok or would we be expected to live on that money and therefore be classed as wasting the money - deprivation of capital I think is the phrase my sister mentioned?

    It's all very confusing and obviously upsetting to think about, but we want to be prepared for what will be expected of us, rather than just blindly walking into trouble with this.

    It would obviously be lovely to own our home and then we wouldn't be claiming housing benefit, but I also realise that it's a huge amount of money and there is every possibility that we would (understandably and in all fairness) be expected to live on that money until it ran out or fell below the threshold of savings allowed.

    Sorry for the odd hour, I'm waiting on my painkillers kicking in and it's all just running round in my head and Google has been no help so far! So many thanks if you got through all of that without falling asleep!!
Page 1
    • pmlindyloo
    • By pmlindyloo 16th Sep 17, 9:58 AM
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    pmlindyloo
    • #2
    • 16th Sep 17, 9:58 AM
    • #2
    • 16th Sep 17, 9:58 AM
    Having looked at the Decision Makers Guide for ESA - capital - it appears that there is no disregard for receiving an inheritance and buying a house with the proceeds.

    Therefore is could be seen as deprivation of capital if you bought your rented house.

    Deprivation actually arises when you have used the capital so that you can continue to get more/the same benefits. This what the DWP has to prove.

    There is one section which you could possibly use:

    52843 Claimants or partners have not deprived themselves of capital for the purpose of
    getting benefit or more benefit if they
    1. say exactly what they are going to do with their capital and
    2. are told by the DWP it will not affect the amount of benefit they can get and
    3. do what they said they were going to do with their capital.

    So, if/when it happens you need to declare the money and then telephone and ask the DWP if you could buy a house with the inheritance. It is vitally important that you get the decision in writing (it would probably have to go to a a decision maker anyway)

    Good luck!
    • xylophone
    • By xylophone 16th Sep 17, 10:18 AM
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    xylophone
    • #3
    • 16th Sep 17, 10:18 AM
    • #3
    • 16th Sep 17, 10:18 AM
    Deprivation actually arises when you have used the capital so that you can continue to get more/the same benefits.
    But if they bought the house they would no longer get housing benefit so that the amount received in benefit would be less rather than the same or more?

    http://forums.moneysavingexpert.com/showthread.php?t=5145236 - post 19 seems relevant.
    • pmlindyloo
    • By pmlindyloo 16th Sep 17, 10:34 AM
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    pmlindyloo
    • #4
    • 16th Sep 17, 10:34 AM
    • #4
    • 16th Sep 17, 10:34 AM
    But if they bought the house they would no longer get housing benefit so that the amount received in benefit would be less rather than the same or more?

    http://forums.moneysavingexpert.com/showthread.php?t=5145236 - post 19 seems relevant.
    Originally posted by xylophone
    Very useful thread
    • Housing Benefit Officer
    • By Housing Benefit Officer 16th Sep 17, 11:35 AM
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    Housing Benefit Officer
    • #5
    • 16th Sep 17, 11:35 AM
    • #5
    • 16th Sep 17, 11:35 AM
    1) While the estate is waiting to be settled you are not yet the legal owner - although you will be the beneficial owner. The capital is disregarded.

    2) Once you receive the capital you will be the legal and beneficial owner - it is counted in full.

    3) Get in writing from the DWP that spending the capital on a house isn't deprivation. If they confirm in writing in advance then it isn't deprivation - even if the advice in the letter is later found to be wrong.

    When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.
    These are my own views and you should seek advice from your local Benefits Department or CAB.
    • Alice Holt
    • By Alice Holt 16th Sep 17, 11:54 AM
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    Alice Holt
    • #6
    • 16th Sep 17, 11:54 AM
    • #6
    • 16th Sep 17, 11:54 AM
    Just to add that the PIP, Carer's Allowance, CTC (apart from any interest earned on the inheritance) won't be affected.
    • TELLIT01
    • By TELLIT01 16th Sep 17, 12:13 PM
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    TELLIT01
    • #7
    • 16th Sep 17, 12:13 PM
    • #7
    • 16th Sep 17, 12:13 PM
    1) While the estate is waiting to be settled you are not yet the legal owner - although you will be the beneficial owner. The capital is disregarded.

    2) Once you receive the capital you will be the legal and beneficial owner - it is counted in full.

    3) Get in writing from the DWP that spending the capital on a house isn't deprivation. If they confirm in writing in advance then it isn't deprivation - even if the advice in the letter is later found to be wrong.

    When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.
    Originally posted by Housing Benefit Officer
    It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
    I don't believe that using the money to purchase a property to live in would considered deprivation of capital.
    • allison445
    • By allison445 16th Sep 17, 12:29 PM
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    allison445
    • #8
    • 16th Sep 17, 12:29 PM
    • #8
    • 16th Sep 17, 12:29 PM
    When my mother passed away it was over a year before I received my inheritance I was receiving ESA at the time I informed esa straight away when I received the cheque but left my claim open for national insurance contributions only,
    I had always intended to buy a home with this money so I asked dwp if this would be ok and was promptly told no this would be classed as deprivation of capital.
    I looked into this myself as I thought how can this be right the information I received from various organisations seemed to be hit and miss as this seems to be a grey area and my largest problem was the fact I was not in receipt of housing benefit before receiving the inheritance.
    I put everything in writing and asked for a decision in writing this came back as indeed if I spent the money on a property and then claimed any future benefits this would indeed be classed as deprivation of capital the decision was made on the fact I had been happy to live were I was for 16 years and there was no reason for me to move.
    I appealed this decision on the grounds the property I live in has now become totally unsuitable for my needs but they still wouldn't budge.
    I have since registered as self employed and am making enough money to live on I intend to still buy a property but I can only hope I never have to rely on benefits again.
    My advice when you know you are getting the money and roughly how much it is do the maths work out what is best may be better buying something cheaper leaving you with a cash amount you can comfortably live on.
    • FBaby
    • By FBaby 16th Sep 17, 1:12 PM
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    FBaby
    • #9
    • 16th Sep 17, 1:12 PM
    • #9
    • 16th Sep 17, 1:12 PM
    When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.
    Really? Never come across a case of a single person on full benefit deciding to buy a large 3 bedroom house beyond their needs with the intention to rent the other two rooms? Or are you saying that even in this instance of intending to make it a business, it would have been granted? This is an example, but I find it hard to believe that EVERY requests made during that period of time would have been deemed acceptable.
    • FBaby
    • By FBaby 16th Sep 17, 1:14 PM
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    FBaby
    double post
    • sheramber
    • By sheramber 16th Sep 17, 1:55 PM
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    sheramber
    Have you considered that once you bought your house you will be responsible for all the repair bills.- repair the roof, repair the boiler, buy a new boiler etc

    You will also need building insurance.

    Will you have enough extra money to cover these in the future?
    • TELLIT01
    • By TELLIT01 16th Sep 17, 3:45 PM
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    TELLIT01
    Really? Never come across a case of a single person on full benefit deciding to buy a large 3 bedroom house beyond their needs with the intention to rent the other two rooms? Or are you saying that even in this instance of intending to make it a business, it would have been granted? This is an example, but I find it hard to believe that EVERY requests made during that period of time would have been deemed acceptable.
    Originally posted by FBaby
    In that scenario the person purchasing the property would in all likelihood lose entitlement to IR benefits due to the income from the rental.
    • Housing Benefit Officer
    • By Housing Benefit Officer 16th Sep 17, 8:36 PM
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    Housing Benefit Officer
    It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
    I don't believe that using the money to purchase a property to live in would considered deprivation of capital.
    Originally posted by TELLIT01
    It's actually in the legislation. I helped someone on here before with exactly the same query. I will try and find a link to the legislation.
    These are my own views and you should seek advice from your local Benefits Department or CAB.
    • Housing Benefit Officer
    • By Housing Benefit Officer 17th Sep 17, 10:09 AM
    • 2,356 Posts
    • 4,199 Thanks
    Housing Benefit Officer
    It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
    I don't believe that using the money to purchase a property to live in would considered deprivation of capital.
    Originally posted by TELLIT01
    Here we go - tucked away in a guidance manual...

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626754/dmgch29.pdf

    Did people say what they were going to do with their capital
    29843 Claimants or partners have not deprived themselves of capital for the purpose of
    getting benefit or more benefit if they

    1. say exactly what they are going to do with their capital and
    2. are told by an officer of DWP it will not affect the amount of benefit they can
    get and

    3. do what they said they were going to do with their capital.


    So a scenario...

    Dear DWP, I'm going to blow my £250,000 inheritance on high class hookers and loads of drugs - is that deprivation of capital? Lots of love claimant xxx

    Dear claimant, No it isn't deprivation of capital. You may spent your £250,000 on the best hookers and drugs and it wont affect your benefits, yours DWP.

    A few months later it is discovered it is deprivation but there is nothing the DWP can do as the claimant was incorrectly informed by the DWP in writing that it was OK to blow their inheritance on drugs and prostitutes.

    However if they blew their inheritance on fine wines and fancy hotels and meals at the best restaurants then it would be classed as deprivation. The claimant has to state exactly what they are going to do with their money. The DWP have to say it is OK to do exactly what they say. They have to exactly spend their money as they have stated.

    If the claimant says I'm buying a house, the DWP say it's OK to buy a house and they then buy a house - it isn't deprivation even if the advice was wrong - hence getting something in writing before they do it.
    Last edited by Housing Benefit Officer; 17-09-2017 at 10:51 AM.
    These are my own views and you should seek advice from your local Benefits Department or CAB.
    • TELLIT01
    • By TELLIT01 17th Sep 17, 12:27 PM
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    TELLIT01
    Interesting info HBO. From my experience of working on ESA, DM's were extremely reluctant to provide answers to what at the time would be hypothetical questions. The section you have posted clearly shows that they should be prepared to answer such questions.
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