Benefits and an inheritance

Surfer

Recently my spouse inherited £21,000 from her mother about 6 weeks ago. this amount was unexpected. I am on Pension credit plus DLA. My spouse is on ESA higher rate as she has gone through the ATOS medical. We also receive housing and council tax benefits.
We used approximately £8400 to pay off debts some of which were old and in arrears.
My wife then bought a lounge suite plus some cabinets as the current ones are several years old and were second hand when originally purchased. The new suite has a riser / recliner which will assist my disability. Also a new bed was purchased as we were desperate for one and the current one inflamed my condition. This set her back altogether £3600.
We have also had a small patio built at the back and it is now level with the kitchen floor so no steps for me to negotiate. Finally we have decided to give up the motability car as before the inheritance we were battling to make ends meet on our joint income. We now intend to buy a second hand vehicle for about £4000 which is more suited to our needs.
Up to a few days we had no idea that there could be an issue with benefits because as far as we were concerned after paying off the debts and buying what we reagrded as necessary items our savings would be under £6000.
We want to do the correct thing but would appreciate some advcie regarding the benefit / inheritance issue. Thanks for any input.

Viks24

The best thing you can do is contact the relevent departments and inform them of your inheritance and how you have spent the money. Deprevation of capital is taken very seriously within the DWP and they will ask you to document all of your spending with receipts and reasons. It is then up to the decision makers of all the seperate departments to decide what is and isnt deprivation of capital.
Once they have decided how much comes under deprivation, they will treat you as having this money available and adjust your benefits accordingly. I think it is a £1 for every £500 you have.

Hope this helps

bunny999

If you spend money in order to be able to claim means tested benefits this is called deprivation of assets aka fraud. This could mean that you will be treared as if you still have the money. You need to inform the DWP and the council of the of the inheritance and what you have done with it. They will then decide if you are still entitled to any benefits.

dmg24

bunny999 wrote: »

If you spend money in order to be able to claim means tested benefits this is called deprivation of assets aka fraud. This could mean that you will be treared as if you still have the money. You need to inform the DWP and the council of the of the inheritance and what you have done with it. They will then decide if are still entitled to any benefits.

The amounts spent do seem rather convenient!

Surfer

dmg24 wrote: »

The amounts spent do seem rather convenient!

Not sure what you mean by that comment as we had no idea up to very recently that there could be an impact on our benefits which is why we are trying to address the issue before it becomes a problem. The money was used for what we thougyt was appropriate and we do have records of all the large outgoings.
Trying to find any info on the direct gov website is like trying to find a needle in a haystack.

jetta_wales

Give them receipts for your purchases and document your reasons for each purchase to explain such things as the aid of having the reclining function on the sofa and the patio being level now making it easier to access the garden given the mobility problems you have. Basically as you have above but a little lengthier.

The only thing I could see them having a problem with might be the car as it could be argued that you didn't need to make that purchase because you have HRM to cover the cost of a vehicle which it was doing with the Motability scheme. Saying you needed that money free'd up because living costs are tight wouldn't be valid because that is not what the HRM is intended for.

You might have to accept that you can not get away with spending down to the £6k limit and will need to lose a few pounds a week from one of your benefits (they won't apply the deduction to every means tested benefit though).

Also you will be asked for bank statements etc from the last few months and for any period before the money was spent they will retrospectively apply the reduction and you will likely incur some degree of overpayment because of this.

Surfer

Thanks jetta for a very helpful post. We can supply receipts for most of the purchases and explain why we bought certain items. At least I have a recent physio therapist's report on my disability also which may help. We live in a rural area and we were stuck last year during the snow plus the motability vehicle we have at present has a problem that the manufacturer cannot rectify. We have now written to the benefits agency.

Oldernotwiser

I would certainly hang on to the money you were planning to spend on a car as your recent expenditure does seem excessive and I think it likely that you may be assessed as if you still have much of the money.

Surfer

It was my spouse that inherited the money and it is me that needs a more suitable motor. She spent a fair amount of money to help improve my quality of life for which I am grateful even though there will probably be issues. Pity that the deprivation of capital regaridng inheritances is not made very clear on the government sites. I guess many people fall into this "trap" without realising it. All we want to do is what is right and avoid further hassles.

Alter_ego

It's true that deprivation etc. is not spelled out when you claim benefits. However it is always made plain that you must inform the agency concerned if your circumstances change.

Whiteknight

Just inform Pension Credit that your savings increased due to an inheritance and that you have spent the money, they will ask for evidence of the money being paid and how the money has been spent. Copies of bank statements and receipts will be asked for and you can write a note to say where the money has gone and why.

They will check to see that the money has actually gone and will make a decision as to whether you have purposefully spent the money in order to keep the benefit. Worse case scenario is that they class you as still having some of the money and it reduces your entitlement - with Pension Credit anything below £10,000 would not be counted anyway.