OAP Savings - Confused

5hady

Hi, Simple question hopefully: -

Scenario:-
My parents (Dad 73, Mum 64) have Government pension, guarantee credit bit (I think), all their teeth, eyes, medication etc paid for. My father has an additional pension of £104 from local authority he used to work for. They receive full housing benefit (council tenants) and Council Tax Credit. 3 years ago they came into £54,000 following the death of a relative. At the end of the year my mother hits 65 and as such the authorities want to look at everything again. When they came into the money they spoke to benefits people who weren't interested in the money.

Question:-
What benefits will they lose?

Many Thanks,

5hady

theGrinch

isnt there a £16k cut off in savings for housing benefit and council tax?

Tibbledom

It sounds like your parents are in an assessed income period for pensions credit. This is a period during which certain changes are ignored for the purposes of calculating the pensions credit.

If the inheritance occurred during this period then it would be ignored until the end of the assessed income period (that is probably why the benefits authorities weren't interested in it)

I am guessing the assessed income period comes to an end when your mum reaches 65 (the assessed income period is often set for 5 years but is always set to end earlier if either of a couple attains age 65)

If so the inheritance (i.e. capital) will be taken into account then. A notional income will then be assumed from their capital and if that pushes your parents above the guarantee pension credit income threshold level unfortunately they will then lose all of their council tax benefit and housing benefit also because their capital is above 16K. This is the likely scenario but would need more information on their income and capital to confirm this.

You may want to seek advice from your local CAB, or from Age Concern or Help the Aged.


You would probably get a better response to this question on the benefits and tax credits board. Does anyone know how to get it moved there?

5hady

Hi,
Thanks for the reply. What if the money were to be err...`stored` in another account or was gifted to someone else so they no longer have the money?

{wink}

Thanks,

5hady

simpywimpy

you get extra credit on pension credit for savings but it will count against them for the purpose of council and housing benefit. I have a feeling they may have to pay some back

Tibbledom

5hady wrote: »

Hi,
Thanks for the reply. What if the money were to be err...`stored` in another account or was gifted to someone else so they no longer have the money?

{wink}

Thanks,

5hady

There are rules against giving away your capital for the purposes of claiming benefit. These are called the deprivation of capital rules.

Trying to "hide" the money in another account could result in a criminal prosecution against your parents if the authorities find out.

Tibbledom

simpywimpy wrote: »

you get extra credit on pension credit for savings but it will count against them for the purpose of council and housing benefit. I have a feeling they may have to pay some back

Nope.

If they are receiving the guaranteed pensions credit, which appears to be the case, then it is irrelevant whether they are getting savings pension credit in addition. The guaranteed credit entitles them to full CTB and HB until the end of the assessed income period and the inheritance won't be taken into account. So there is no CTB or HB to repay.

The problems only arise when the asssessed income period ends when the OP's mother reaches age 65. It is possible that even if they don't qualify for guaranteed pension credit after 65 they will qualify for some savings credit. However they would not be entitled to any CTB or HB in this scenario because their capital is above 16K. Again it is the entitlement to guaranteed credit which will determine whether they get full HB and CTB or none at all.

Francesanne

5hady wrote: »

Hi,
Thanks for the reply. What if the money were to be err...`stored` in another account or was gifted to someone else so they no longer have the money?

{wink}

Thanks,

5hady

Call me old fashioned but I'd call that fraud.

Francesanne

5hady wrote: »

Hi, Simple question hopefully: -

Scenario:-
My parents (Dad 73, Mum 64) have Government pension, guarantee credit bit (I think), all their teeth, eyes, medication etc paid for. My father has an additional pension of £104 from local authority he used to work for. They receive full housing benefit (council tenants) and Council Tax Credit. 3 years ago they came into £54,000 following the death of a relative. At the end of the year my mother hits 65 and as such the authorities want to look at everything again. When they came into the money they spoke to benefits people who weren't interested in the money.

Question:-
What benefits will they lose?

Many Thanks,

5hady

Find that very hard to believe. My Mum has around £9,000 total in savings and we managed to obtain Council Tax benefit for the 1st time last year for her. When they decided she was entitled to a refund, she was sent a form from the council informing her she must report ANY change in her benefit because it could affect her benefit. I think coming into such a big sum of money would most certainly be classed as a change of circumstance.

Tibbledom

Francesanne wrote: »

I think coming into such a big sum of money would most certainly be classed as a change of circumstance.

Nope. I'm afraid you are completely and most certainly wrong. If the inheritance is within an assessed income period it is ignored until the end of the period.

See http://www.pensions.gov.uk/pdf/pensioncredit/pc10sjan09.pdf from which I quote

"Assessed income period
If your customer is 65 or over, or if they have a partner and one of them is at
least 65 and the other is at least 60, an assessed income period may apply. This
means that they do not need to report changes to pensions, annuities, equity
release payments or capital as they happen. Other changes in circumstances still

have to be reported"

Robert_Sterling_3

5hady wrote: »

Hi,
Thanks for the reply. What if the money were to be err...`stored` in another account or was gifted to someone else so they no longer have the money?
5hady

At first sight, and having regard to your user name, it looks as if you want a few tips on how to "conspire to obtain a pecuniary advantage by deception" which is a criminal offence.

I suggest you look for a tax avoidance oppotunity if you can find one.