Income Support + Premium Bonds

splashproof

My Sister is on Income Support and our parents have just bought her Son £10,000 worth of premium bonds and placed them in my Sister name !!!

Before the DWP scream fraud, how can the bonds be put back in my parents name.

( assuming thats our premium bonds should be registered if bought by the grandparents )?

Teahfc

From Pb Site.

Investing for a grandchild

Each time you buy Bonds you need to nominate one of the child’s parents or guardians to look after the Bonds until the child is 16. Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds.
We’ll send the Bond record, and all correspondence, to the parent or guardian you nominate.



I am sure it not a problem aslong your sister is only nominated parent.

splashproof

Teahfc wrote: »

And only the parent or guardian will be able to cash in the Bonds.



I am sure it not a problem aslong your sister is only nominated parent.

We checked with the DWP and they said it would be counted has capital becasue the parents have access to the money.

cassieB57

splashproof wrote: »

We checked with the DWP and they said it would be counted has capital becasue the parents have access to the money.

Capital that belongs to a child (ie under 16 who is the responsibility of the claimaint) or young person (ie aged up to 20 and still in relevant education)does not affect her own IS:


Effect of capital on benefit - child or young person When capital affects benefit
29785 [See DMG Memo JSA/IS 64] If the child’s or young person’s capital is more than £3,000 do not include the
1. personal allowance and any
1.1 EDP or
1.2 DCP for the child or young person when working out the claimant’s applicable
1
amount or
2. income of the child or young person when working out the claimant’s income2.
1 JSA Regs, reg 83(b) & Sch 1, para 15A(2)(a) & 16(a)); IS (Gen) Regs, reg 17(1)(b) & Sch 2, para 13A(2)(a) & 14(a); 2 JSA Regs, Reg 106(5); IS (Gen) Regs, reg 44(5)
When capital does not affect benefit [See DMG Memo JSA/IS 64]
29786 Capital does not affect benefit if a child's or young person's capital is £3,000 or less

Premium bonds belong to the person whose name they are in though, so if they are in your sister's name, they are hers. You can buy premium bonds for children and nominate the parent/guardian to look after them until the child is 16;-is that what they have done?

Oldernotwiser

I think you may have problems if your sister tries to give these back to your parents as it could be looked at as deprivation of capital.

MrsBartolozzi

I found this when I was searching for another poster a few weeks ago:
http://www.turn2ushelp.entitledto.co.uk/viewhelp.aspx?sid=13&ctyid=0&helpfile=savings


Any capital you own jointly with other people will normally be divided equally between the joint owners. For example, if you and your daughter have a joint bank account of £8,000, you will be assessed as owning £4,000 of it.


So as the bonds are registered at least partly in your sister's name then she will be seen to have access to the money BUT this statement above says that only half the money would be considered as hers for benefits' purposes. So £5k then. As long as she has less than £6k savings including this amount her benefits will not be affected. If her saving + the £5k total more than £6k then benefits are reduced by £1 per week for every £250 of savings you have above £6,000.

cassieB57

MrsBartolozzi wrote: »

I found this when I was searching for another poster a few weeks ago:
http://www.turn2ushelp.entitledto.co.uk/viewhelp.aspx?sid=13&ctyid=0&helpfile=savings


Any capital you own jointly with other people will normally be divided equally between the joint owners. For example, if you and your daughter have a joint bank account of £8,000, you will be assessed as owning £4,000 of it.


So as the bonds are registered at least partly in your sister's name then she will be seen to have access to the money BUT this statement above says that only half the money would be considered as hers for benefits' purposes. So £5k then. As long as she has less than £6k savings including this amount her benefits will not be affected. If her saving + the £5k total more than £6k then benefits are reduced by £1 per week for every £250 of savings you have above £6,000.

This does not apply in the case of PBs because they are not in joint names. They are in the bond holder's name only, but if the bond holder is under 16 the nominated person will hold them and the child will have a beneficial interest. For IS purposes they are the child's capital. If the bond holder is an adult they are his/hers, so its important to know which applies in this case.

splashproof

cassieB57 wrote: »

Premium bonds belong to the person whose name they are in though, so if they are in your sister's name, they are hers. You can buy premium bonds for children and nominate the parent/guardian to look after them until the child is 16;-is that what they have done?

They followed the rules here :

As you can from the highlighted section, our parents only had once choice, which now means my sister is the holder and therefore has capital exceeding IS limits



http://www.nsandi.com/products/pb/howitworks#inv-grandchild

Investing for a grandchildEach time you buy Bonds you need to nominate one of the child’s parents or guardians to look after the Bonds until the child is 16. Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds.


We’ll send the Bond record, and all correspondence, to the parent or guardian you nominate. Although we no longer send a child’s Bonds to the grandparent or great grandparent, we will send you an acknowledgement of your investment.

cassieB57

splashproof wrote: »

They followed the rules here :

As you can from the highlighted section, our parents only had once choice, which now means my sister is the holder and therefore has capital exceeding IS limits



http://www.nsandi.com/products/pb/howitworks#inv-grandchild

Investing for a grandchildEach time you buy Bonds you need to nominate one of the child’s parents or guardians to look after the Bonds until the child is 16. Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds.


We’ll send the Bond record, and all correspondence, to the parent or guardian you nominate. Although we no longer send a child’s Bonds to the grandparent or great grandparent, we will send you an acknowledgement of your investment.

In that case, your sister is not the owner of the pbs; the child is the beneficial owner so they are the child's capital-the PBs would be in the child's name not the sister's surely, sis is only 'looking after' them in accordance with the rules.The child can apply to have them at the age of 16.

In the case of a Birthday or Christmas 'gift' of money which brings savings over £6000-why would you do that? A birthday or Christmas gift is for that purpose, so if you decide to have money, and then not buy something with it, why wouldn't it be counted as savings-since that is what it is?

splashproof

cassieB57 wrote: »

In that case, your sister is not the owner of the pbs; the child is the beneficial owner so they are the child's capital-the PBs would be in the child's name not the sister's surely, sis is only 'looking after' them in accordance with the rules.The child can apply to have them at the age of 16.

I've just checked with the DWP and they are of the opinion the savings will count.

They cited the folllowing section

"Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds"


Saying that the parents could benefit from the prize money and could also cash in the bonds for there own gain, which would count towards their savings.

The DWP would view it has the childs money if it were in a trust fund and therefore only the child could access it later in life.

Cam1970_2

It's unfortunate that your parents didn't realise the implications their generous action would have on your sisters IS. Understandable though, my mum would be the same!

Would they consider cashing the bonds back in and putting the money in trust for her son so he can access it when he's 16/18?

Some may say this will still be seen as deprivation of capital though. But if their intention was to gift money to their grandson, it could have be done in a different way. The fact is, they just didn't choose the best way to do it.

Hopefully, it can be resolved. Good luck.