What to do with insurance payout?

mxxx

Hi,
After a bit of money saving savvy advice regarding an insurance payout. My mother in law has got cancer and has been told she only has a year left, as such she is no longer working and my father in law has also been made redundant so isnt working either (he has decided not to continue looking for work so he can look after mil full time). Now, both of them have worked hard all their lives and now are struggling to make ends meet as they have very limited incomes and are struggling to claim benefits. None of us know anything about benefits but it seems all the money they have in savings, shares etc is working against them as this is used to calculate eligibility to claim benefits. They are now recieving income support, dla and a couple of other things and have just recieved a payout in the form of a cheque from their life insurance. They want to put this somewhere safe but the trouble is, if they pay it into their bank account it will affect their benefits and they'll be expected to use the payout to live on instead of the benefits. Is there any way they can bank or cash the cheque and keep the money safe without ruining their benefits? They were considering giving some or all of it to my other half but not sure of the regulations (tax wise) on financial gifts and also presumably the cheque will have to be paid into an account in their names to actually get their hands on the money, will this trigger the benefit agencies to stop their benefits?? Any advice would be gratefully recieved, not trying to decieve anyone, just want to get whats rightfully theirs!

noh

Yes they would be expected to use the insurance payment for living costs. After all that is what it is meant for.

Nigel

mxxx

Yes, I guess so but the payout wont last 12 months and after they they will have nothing, the insurance is all gone now so they wont get any more when she dies either. Kinda sucks a bit really but if thats what they have to do, I guess theres no alternative.