Inlaws have had benefits reduced due to inheritance.

Holmesy81

Hi, I just wondered if people could advise me on the following please:
My wife’s parents are on benefits (please read on before making assumptions). Both are retired, Dad had to retire on the grounds off ill health, he ran his own business for 46 years, but due to having pulmonary embolisms and blood clots was forced to retire back in 2003’ in turn he lost his business/shop. Unfortunately the business he ran had occurred debts and there daughter (my wife) stop further action, repossession etc.. by paying £16,000 to clear this. I hasten to add my mother in law looks after her mother (90) who lives with them and is homebund with sever osteoporosis, which is very challenging.
My wife’s father, his mother passed away this year (March) and was left some inheritantance £20k now the government are saying that my wifes parents must now pay council tax and in addition will also be having there benefits reduced.
The money which was paid by my wife was only done on a verbal arrangement, nothing legal written up. (being family and all)
Are there any grounds for the parents to appeal, and if so what are the procedures. It upsets me, that every tom, !!!!!! and harry claim for this and that, but 2 law abiding people have now had repercussions through no fault off there own. The money has now been returned to there daughter, but there now having to pay council tax.
Through no fault off there own, there now worse off.
I’d appreciate any advice,
Regards in advance.

Jowo_2

Means tested benefits are subject to income/capital. Those who are considered to have deliberately deprive themselves of capital in order to qualify for means tested benefits are treated as if they are still in possession of it (known as notional capital) so you may find giving away the inheritance continues to impact their eligibility. Google these terms to find out more - deprivation of capital and notional capital. Someone else should be able to tell you on this forum how the personal debt repayment from the inheritance will be considered.

Does your MIL's mother claim disability living allowance? Look up DLA to understand if the MIL has mobility and care needs that could qualify for this non means tested benefit - you may find an arthritis charity website will give helpful info on this, too. At a certain level of DLA, the state could pay your MIL a carers allowance.

Consider going to the Citizens Advice Bureau to have someone recheck this household's eligibility or an organisation like help the aged (or similar) for welfare advice. Put their details into the 'Entitled to' website to check if there are other allowances, credits or benefits they may be entitled to.

karenx

The upper limit for savings is 16k, so if you have over this you are not entitled to any means tested benefits which include council tax benefit and housing benefit. If below 16k you are still entitled to a little help with these. If you get the money and then "give it away" then it will be seen as deprevation of capital and you will be assesed as still having it, so by giving it away you are worse off as you dont have the money and you dont get any of the benefits.
Even though all they are doing is paying back a "loan" a loan between family is not seen as necessary and so will be seen deprevation of capital.
So what they can do is use the money for day to day living just now paying bills etc, no extravagant purchases and once they get to below 16k they can apply for council tax benefit again

SuziQ

From what I have read on these boards, what has happened to them seems pretty standard. Their option would have been not to repay the debt and live off the inheritance until it was gone (or whatever the amount is they are able to keep and claim benefit). Although it seems harsh, if they had been able to repay the debt to their daughter and still claim benefit, then effectively the benefit system are paying off the debt incurred by the company through the continued benefit payments-Does that make sense to you?They are only worse off because they have repaid the debt.

I would presume without the inheritance, the debt would have remianed unpaid for the unforseen future? Maybe the daughter should give them back the £16,000 until they are in a position to repay-maybe through an inheritance they make to her? Do they still have the remaining £4,000?

calleyw

Jowo wrote: »

Does your MIL's mother claim disability living allowance? Look up DLA to understand if the MIL has mobility and care needs that could qualify for this non means tested benefit - you may find an arthritis charity website will give helpful info on this, too. At a certain level of DLA, the state could pay your MIL a carers allowance.

If the MIL's mother is 90 as stated and is not already claiming DLA she will not be able to. As that is only for people under the age of 65.

If she has care needs then attendance allowance would be the benefit to be claimed. There is no mobility part like DLA.

Also if you are claiming a pension you can't claim carers allowance.

I also suggest the OP looks up deprivation of capital as giving back the money does not get around it. They will be still classed as having the money. The council treat the money as being spent at a certain amount per year. So it maybe a couple of years before they are classed as having less than £16K a year and able to claim means tested benefits.



Yours

Calley

Oldernotwiser

Holmesy81 wrote: »

Hi, I just wondered if people could advise me on the following please:
My wife’s parents are on benefits (please read on before making assumptions). Both are retired, Dad had to retire on the grounds off ill health, he ran his own business for 46 years, but due to having pulmonary embolisms and blood clots was forced to retire back in 2003’ in turn he lost his business/shop. Unfortunately the business he ran had occurred debts and there daughter (my wife) stop further action, repossession etc.. by paying £16,000 to clear this. I hasten to add my mother in law looks after her mother (90) who lives with them and is homebund with sever osteoporosis, which is very challenging.
My wife’s father, his mother passed away this year (March) and was left some inheritantance £20k now the government are saying that my wifes parents must now pay council tax and in addition will also be having there benefits reduced.
The money which was paid by my wife was only done on a verbal arrangement, nothing legal written up. (being family and all)
Are there any grounds for the parents to appeal, and if so what are the procedures. It upsets me, that every tom, !!!!!! and harry claim for this and that, but 2 law abiding people have now had repercussions through no fault off there own. The money has now been returned to there daughter, but there now having to pay council tax.
Through no fault off there own, there now worse off.
I’d appreciate any advice,
Regards in advance.

How could the in laws prove that they were repaying a loan and not just giving the money away to enable them to claim benefits? Do you think that the authorities should just accept their word for this and do you think that this should apply to everyone?

Just a thought.

sp1987

Because they inherited 20,000, they only have to notionally work through 4,000 until they qualify again when they are seen to have capital below 16,000. So technically it won't be a long period and they will have the surplus 4,000 still to use ''as the 4,000'' over 16,000, won't they? I guess the only shortfall comes as and when they have notionally say 15,999 so are needing to pay most of their council tax but don't have the cash to do so.

Is there any way of getting the council/a decision maker to give a written indication of how long it will be before this notional capital reduces to a level below 16,000 where they would be able to reclaim, so they can apply as soon as possible when that time has passed? Maybe someone will know if guidance on that will be given?

I guess the council will say that nowhere did it say that the loan had to be repaid in one lump sum even if you could prove it did exist.

It doesn't seem fair in some circumstances but the benefits system is to support people who aren't able to support themselves at the time they get whichever support it is. These people only had an unsecured debt (essentially, just without proof) to repay to your wife and as such should have paid their living expenses before commencing debt repayments, as would happen with any loan or credit card debt. It doesn't seem fair, but it isn't a system of fairness it is a system of support for people who don't have the minimum cash it is worked out someone needs to live on. Your parents in law did have that money. If it is any consolation, at least the rules apply across the board no matter what someone's age, marital status, religion or race. It's the same reason why single parents don't get supported when a partner moves in, as there is somebody available to financially support them.

If you and your wife are not desperate for the money, could you return it and allow them to repay via installments? That would allow them the capital to use for their council tax and pay the debt off to her steadily. Otherwise sadly they may be very short of money for quite a time.

atrixblue.-MFR-.

under the cercumstances i agree with above posts, i would hand back the 16k and arrange a payment plan with in laws, then i would advise paying the whole years council tax and rent upfront, loosing a some money yes but they wont have to budget for the year and worrie about it, lifting a burden.

SuziQ

atrixblue.-MFR-. wrote: »

under the cercumstances i agree with above posts, i would hand back the 16k and arrange a payment plan with in laws, then i would advise paying the whole years council tax and rent upfront, loosing a some money yes but they wont have to budget for the year and worrie about it, lifting a burden.

Excellent advice imo.