Inheritance and benefits

alihud

I am due to inherit a substantial amount from my mum who i lost in December:(
Unfortunately i am very poorly and am on quite a few benefits.I think i know what you guys are going to say but am i allowed to pay off my mortgage with my inheritance money or is that not allowed?

shikoku

I don't think so as you do not *have* to do this.

MrsManda

alihud wrote: »

I am due to inherit a substantial amount from my mum who i lost in December:(
Unfortunately i am very poorly and am on quite a few benefits.I think i know what you guys are going to say but am i allowed to pay off my mortgage with my inheritance money or is that not allowed?

Information on capital and deprivation can be found in the Decision Maker's manual here:
http://www.dwp.gov.uk/docs/dmgch29.pdf - Opens into a pdf. The appropriate section is: page 149

The basic jist is:

The Decision Maker has to show that a person deprived themselves of capital in order to claim/continue to claim benefits. They have to take into consideration the following points:

Mental capability - does the claimant have the mental capacity to make decisions on financial issues

Choice - does the claimant have a choice in the deprivation of capital. I.e paid back a debt before the agreed date - the example is a mortgage

Knowledge - did the claimant know that having the capital would reduce their benefits and so deprived themselves

Permission - did the claimant tell the DWP that they wanted to deprive themselves of capital (i.e. pay off the mortgage) and received confirmation that this was acceptable.

In your case I think the only way you can legitimately pay off your mortgage and continue claiming income based benefits is if you get permission as you have the mental capability, choice and knowledge.

margaretclare

I would have thought that paying off your mortgage would be a good thing to do.

AFAIK you only get mortgage interest paid via benefits, the capital amount remains, so why would anyone object to your paying off the whole thing?

Oldernotwiser

If you are already claiming help to pay your mortgage then you are unlikely to have a problem if you repay it as you'll actually be claiming fewer benefits rather than more.

MrsManda

margaretclare wrote: »

I would have thought that paying off your mortgage would be a good thing to do.

AFAIK you only get mortgage interest paid via benefits, the capital amount remains, so why would anyone object to your paying off the whole thing?

Because the OP said she was getting 'quite a few benefits' whereas if she has more than £16,000 in capital she wouldn't be getting any income based benefits therefore saving the public purse money. The OP doesn't state she's claiming SMI but this isn't the only benefit which needs to be taken into consideration

Jowo_2

margaretclare wrote: »

I would have thought that paying off your mortgage would be a good thing to do.

AFAIK you only get mortgage interest paid via benefits, the capital amount remains, so why would anyone object to your paying off the whole thing?

The early repayment of loans where there is no legal imperative to do so can be frowned upon under the deprivation of capital rules.

The rules are there to stop people with means from claiming means tested benefits and encourages them to spend their money on their ordinary living expenses rather than squirrel their capital away and continue to collect money from the public purse.

It's a complex area and the OP should get expert advice rather than just depend on advice on this forum.

I have came across a case on the internet, a judgement that was overturned when someone who was approaching retirement after being made redundant as the judge thought it was a sensible act, and couldn't be classed as deprivation of capital by the DWP.

If the OP is on DLA, this wouldn't be affected as it's not means tested.

OP - sorry to hear of your loss, hope you manage to sort this additional matter out without too much extra extra stress.

TOBRUK

Just to be safe, I would write a letter to the DWP (which you have to inform of any inheritance anyway) stating your situation, all the benefits you are claiming etc.

Ask them whether you may pay off some or all of your mortgage, and tell them what your intentions are. I do believe that writing to them is always better as you then have any decisions in writing to safeguard yourself in future.

I believe that they will look at your case as an individual and send you a reply in writing. Whatever people say on the forum, you are better off in writing direct to the DWP to get an answer.

Sorry for your loss and good luck.

sonorman

TOBRUK wrote: »

Just to be safe, I would write a letter to the DWP (which you have to inform of any inheritance anyway) stating your situation, all the benefits you are claiming etc.

Ask them whether you may pay off some or all of your mortgage, and tell them what your intentions are. I do believe that writing to them is always better as you then have any decisions in writing to safeguard yourself in future.

I believe that they will look at your case as an individual and send you a reply in writing. Whatever people say on the forum, you are better off in writing direct to the DWP to get an answer.

Sorry for your loss and good luck.

I have had cause to write to the DWP in the past to enquire what would happen if........ The answer that came back was that they cannot give a decision on any matter unless the request was based on fact. They are not able to give a 'clearance' for a hypothetical set of circumstances.

So it seems you, like me, have to commit to an action, notify them and then wait for a decision. If you have shot yourself in the foot by carrying out that action - hard luck! You can't undo something that has already been done.

Mojisola

TOBRUK wrote: »

Just to be safe, I would write a letter to the DWP (which you have to inform of any inheritance anyway) stating your situation, all the benefits you are claiming etc.

Ask them whether you may pay off some or all of your mortgage, and tell them what your intentions are. I do believe that writing to them is always better as you then have any decisions in writing to safeguard yourself in future.

I believe that they will look at your case as an individual and send you a reply in writing. Whatever people say on the forum, you are better off in writing direct to the DWP to get an answer.

Sorry for your loss and good luck.

And if you wouldn't mind posting the reply here we'd be grateful.

alihud

Oh yikes i am getting more stressed by the minute.I'm also executor of her will and i feel like i'm going round in circles.I've just tried ringing the CAB but couldnt get through.I've got forms coming out of my ears and i just dont feel well enough to deal with it all.
Could i not just call the benefits helpline,could they not advise me what i can and cant do.I dont want to do anything wrong i just need some help