Student Loans Repayment and an Inheritance

abloke36

I received a letter from Student loans yesterday and need some advice.

I graduated from University in 2006 and started repayments a year later and understood that repayments were taken as part of PAYE.

Unfortunately in January 2007 my mother died suddenly and I inherited a substantial amount of money. Unfortunately in November 2007 I had to leave employment to become my father's carer as he is unwell with COPD and his wishes were to remain at home rather than pay substantial care home fees. My sister and I have been taking care of him, alternating care. I have not been in employment since.

Now Student loans have asked me to declare how I have been living since. I am single and cashed in an endowment policy and also rented out my home for 6 months.

I assume I will have to declare the rental received and also declare any interest paid on my investment but these both fall well below the £15,000 threshold.

My question is can they take my inheritance into account as well . As this was substantial and around £70,000, having to pay a percentage of this at the moment would hurt.

Any advice appreciated before I call Student loans tomorrow.

MrsManda

Someone else may have more experience with this but looking at the repayment guide says that you are over the threshold for repayment when the total of your earned and unearned income exceeds £15k. However I don't think a lump sum inhertiance counts as income, but interest on savings does. Therefore if the interest on your inhertiance is more than £2000 it is added to your earned income and you have to repay if this total reaches £15k.

I presume your inheritance is a lump sum and not 'paid' to you as an income?

Call the SLC and be honest but I don't think you've got anything to worry about.

abloke36

Need to add that I do not claim carer's allowance as I do not care for him over 35 hrs a week and my attendance is irregular.

Poolie

Hi abloke36

SLC will be looking for how you are supporting yourself day to day. Do you have any sort of income apart from the rental and investment income as SLC will not be satisfied that your rental or investment income is enough to be supporting yourself.

I don't expect the rental and investment income is going to be over the £2000 for unearned income. Questions like where you are living? (Who provides this?) and who pays for your day to day living and bills as these will be the person who is technically supporting you in student loans eyes.

abloke36

I support myself by spending my inheritance. I own my own home. I also cashed in my endowment policy 3 yrs early.I have not worked for 18 months and not claimed benefits as I am unable to work full time due to my fathers needs.

Poolie

Since you are not receiving benefits or any income it might be best to get your father (if possible) to write a letter stating that you are supporting him and that you are using your inheritance to support yourself. Obviously you will need to send a statement for the inheritance dated within the last 3 months

abloke36

I inherited in May 2007. Should I have told them?

Poolie

Not if you were working at the time. You should have told them when your circumstances changed but they would have asked for evidence