housing benefit and huge savings or spendings

stu12345_2

I would like to know what to do if this ever happens to me, I once googled it and only found one true answer.
Say for instance you work and pay your rent and council tax in full, but say you inherit say £15000 you then buy a new car and put the rest of the dosh in bank say £3000, 7 months later you loose your job.
to my knowledge the coucil only ask for bank statements up to 3 or 6 months, what you had in the bank 7 months ago or 2 years ago is irrelevant.you could be loaded back then.
am i right that its 6 months go or 3 months ago statements they want to see and buying a car 7 months ago cant be classed as deliberate spending of capital cos you were working back then.you then loose you job what happens, the dss would nt say you had 15000 7 months ago your fault for spending it,

surely the other case could be if you had even more in bank say £50000 from inheritance and you lost job you could withdraw it all keep it at home, live of it, then wait 6 months and claim jsa, council tax benefit cos the statements are only up to last 6 months.is this beating the system at their own game.

other l case is you inherit say £16000 and spend the lot, then loose you job the next month, can the dss or council say your getting nothing as you had money in last 6 months , thus you arent getting any help at all for month and months, hence you virtually starve and get evicted.

The final case is you inherit and loose job , spend, you have nowt left, then make a claim.what happens again starve
so thats 4 diif cases, can anyone give answers to any

halibut2209

Not really sure what you are asking, but there was a case of lottery millionaires squandering their winnings in a ridiculously short amount of time and were then entitled to benefits. Didn't go down well in the press.

Jowo_2

You are asking multiple questions about a very complex area so you can't really expect to get this all accurately and concisely answered.

Deprivation of capital is about intentionally getting rid of it in order to better qualify for means tested benefits and the rules are there to ensure that those on benefits who come into money use it to pay their ordinary living expenses. There is a lot of guidance on the type of things a claimant can spend without it impacting their benefits (such as a replacement car, household items and the like) and the type of things they can get sanctioned for (paying back debts early where there is no legal requirement for them to do so) for example.

Notional capital is the actual term for the DWP or HMRC to treat the claimant as if they still have their capital, even after they have got rid of it. Yes, they can actually refuse to pay means tested benefits if they feel the claimant has deliberately squandered their money to be eligible for them. They have formulas to calculate the notional capital.

stu12345_2

yes my main point is it a 3 or 6 month cut off point to when you had the wealth, and what you had 7 months ago irrelevant.
as i read about a story of a woman who inherited, spent on her kids, relatives,then say a year later lost job, I think she got benefit as it was passed the 6 month cut off point.

Jowo_2

I'm not really aware how far back the DWP or HMRC go back to determine if deprivation of capital has taken place, if there's some kind of cut-off whereby if someone squandered their money on a tuesday they'd be okay, but if they did it a day later, they would get sanctioned because it fell within x window of opportunity.

As far as I'm aware, the authorities have to be able to prove that the claimant has knowingly and intentionally deprived themselves of capital to make them eligible for means tested benefits. One way they can detect this is if a person claimed for a benefit, was informed their savings were too high, then submitted a fresh claim when they were under that 6-16k sum. In this scenario, I imagine their spending pattern would be investigated if it was felt that their capital was steeply reduced in a short period of time. That's just an assumption of mine, not fact btw.

real1314

halibut2209 wrote: »

Not really sure what you are asking, but there was a case of lottery millionaires squandering their winnings in a ridiculously short amount of time and were then entitled to benefits. Didn't go down well in the press.

I'm fairly sure that the reverse was true - they'd sepnt the lot and tried to claim but got refused benefit.

As for the OPs question - well the theory is right, but you have to think, why would you "waste" all your cash on the assumption that you *might* lose your job, so then you'd get some benefit.

You'd be better off keeping the cash, taking a lower paid job and trying to get back to your original wage level.

stu12345_2

as for last reply folk earn money to buy things for house,family, themselves cos they dont want to live in a house with old car, old kitchen, so why do they have to save, end of day if you have the lower savings inthe 3 months laid by law then your entitled to help'
but my point is what legal right have you if you have money spend it on home improvements , car etc and loose job, can you claim.Every time i claimed its the last 3 months bank statements they ask, so if i had £50000 4 months ago and bough a kitchen, car, tv had a holiday then they donts know and by law dont ask and dont need to know cos its past the cut of point of wealth in my past.

AnxiousMum

Stu, have you come into some money by chance and wondering how you can ensure that if you get laid off next month you won't have to live off of your inheritance/savings?

stu12345_2

no, but my parent said to me if I die you can sell my house and enjoy yourself. and i thought do i save it or spend it, what if i lose my job, but if its 6 months later then im entitled to help as its past the cut of point for past bank statements.

halibut2209

real1314 wrote: »

I'm fairly sure that the reverse was true - they'd sepnt the lot and tried to claim but got refused benefit.

I stand corrected

http://www.thesun.co.uk/sol/homepage/news/article983713.ece

Whiteknight

I've known someone having to supply bank statements going back more than a few years before and provide details of where the money had been spent when they claimed an income based benefit after all the money had gone.