Capital Assessment & Benefits

cuteskin

I have recently been awarded £16,000 from the Criminal Injuries Compensation Authority. I am currently in receipt of Income Support and have notified the DWP that I have received this amount. They have agreed to disregard the £16,000 for 52 weeks. At the end of the period I need demonstrate and provide evidence that the capital has been reduced such as purchase of essential household items, this would be not practical as most of the things that I have within the home do not need replacing.

Am I able to offer cash gifts to family members?

I know that I can arrange a trust fund to become set up, but I am not sure how I can go about this.

I would be grateful for any assistance or advice from the forum users.

Indie_Kid

cuteskin wrote: »

Am I able to offer cash gifts to family members?

This may be seen as deprivation of capital.

Sixer

Dmg24 - it's not about what you think the OP SHOULD prefer, it's about enabling them to understand their entitlements or what processes/choices they can legally make in their position.

OP - if you keep the capital in your own name, you won't be able to make cash gifts from it as it will be treated as deprivation of capital. You'll only be able to spend it on normal, day-to-day living.

There is a type of trust, called a Personal Injury Trust, into which I think (not sure as the money is already in your possession, you'd need to look that up) you could put your money. If you do this, your means-tested benefits will not be affected by the capital in the trust. However, if you do this, you need to be aware that you will need trustees (usually family members) and you will not be able to access this money unless they agree and act as counter-signatories to the trust account. It will also cost money to set up - the charges will be between £500 and £1,000.

(Edited to change a typo).

Oldernotwiser

cuteskin wrote: »

I have recently been awarded £16,000 from the Criminal Injuries Compensation Authority. I am currently in receipt of Income Support and have notified the DWP that I have received this amount. They have agreed to disregard the £16,000 for 52 weeks. At the end of the period I need demonstrate and provide evidence that the capital has been reduced such as purchase of essential household items, this would be not practical as most of the things that I have within the home do not need replacing.

Am I able to offer cash gifts to family members?

I know that I can arrange a trust fund to become set up, but I am not sure how I can go about this.

I would be grateful for any assistance or advice from the forum users.

Why would you rather give it away than spend it on yourself?

Mojisola

cuteskin wrote: »

At the end of the period I need demonstrate and provide evidence that the capital has been reduced such as purchase of essential household items, this would be not practical as most of the things that I have within the home do not need replacing.

Is this really the case or just that you're used to what you've got around you?

If you think ahead to how things might be if you have to survive on benefits for some time, would it help to buy modern kitchen equipment that might be more energy efficient and so reduce future on-going costs. If you have a car, is it getting to the stage where it's costing more to keep it on the road? Would a newer one save you garage bills in the future?

Wisely spent, the capital could reduce your out-goings in the future and make it much easier to live week to week.

GlasweJen

Usually trusts are set up instead of the money being placed into the injured persons bank account so putting it in a trust now may fall foul of deprivation rules.

As advised I'd get the OP to really evaluate their housing situation, is there anything that would make life easier (for example: updating the white goods, getting a shower installed, perhaps a mobility aid or some other disability paraphenalia that you wouldn't otherwise be able to afford).

Do not give the money away in any circumstances, also do not pay off any non-urgent debts (i.e. any you're not being taken to court over) and don't spend on anything ridiculous like an around the world cruise for you and your mates. If you go mad with the money or use it for anything that isn't a need the DWP will just act as if you still have it this time next year and you'll be out of pocket in terms of benefits.

sunnyone

Its too late for a PI trust if you already have the access to the cash now, you need now only follow the deprivation of capital rules.

Many things wont be deprivation of capital but handing over cash to ANYONE is, have a nice package holiday or get a reasonable car, treat the kids to reasonable days out etc. to enjoy the money but to keep on the right side of the rules.

for tax credits (if you claim them) to make the money ignored all you have to do is put it in ISAs.