Inheritance + CT/HB Pension Credit

Mojisola

rachyroundbum wrote: »

My dad is due to recieve an unknown sum in inheritance (it's currently unknown because the debt of the estate is still being paid). He lives with my mum, who works part time, and they are in receipt of Council Tax benefit, Housing Benefit and pension credit.

They are under the impression that the Government will FORCE them to spend whatever my dad receives in inheritance on council tax and housing benefit, with no room for him to "enjoy" the money.

Is this true? Will they have no control over what they spend?

I know the idea that someone wants to claim benefits after they receive an inheritance really riles people but it's a shame when a thread deteriorates into a slanging match. If the OP is given the facts, she can make sure her Dad complies with the law.

Whiteknight wrote: »

How old are your parents, if both of them are getting their State Pension and have an AIP (Assessed Income Period) with the Pension Credit then the inheritance will not effect the Pension Credit in payment until that review period ends.

If their is no AIP then the value of any savings etc will be taken into account when working out the Pension Credit entitlement. Losing the Pension Credit could mean that they lose help with Council Tax and Housing Benefit.

Pollycat wrote: »

Does anyone agree that the key question is whether the OP's Dad has an assessed income period?

From what I've read in the Pension Credit booklet, it clearly says that if you have an assessed income period, you don't have to tell them (DWP) about changes in:

• Savings & investments
• Personal or work-related pensions
• Income from annuities

So to me, that sounds like the guarantee pension credit would continue to be paid even though savings (as a result of the inheritance) have inceased.

However, if you are in receipt of housing benefit and council tax benefit you do have to tell the council about changes in your income and savings.

So, the question from me is - if you are still in receipt of guaranteed pension credit, do you still continue to get CTB & HB even though your savings are in excess of £16000?

FWIW, Mum currently gets guaranteed pension credit and CTB & HB even though her savings are in excess of £16K.

About 6 years ago Mum & Dad moved into council-owned, warden controlled senior people's accommodation and put their house up for sale (old terrace).

They were in receipt of Savings Pensions Credit at the time and the day they received the money from the house sale, I phoned up DWP to report the change in circumstances.

A few months later, I noticed they were still being paid Savings PC so I rang up again and the guy said that as they had an assessed period, any change in their savings did not affect their entitlement to Savings PC.

He actually said 'even if they win the lottery they will still get Pension Credit until the end of the assessed income period'.

So, yes it would seem that in some circumstances you can continue to claim benefits even if you've won on the lottery.

The AIP question is central to this issue. My parents have received a small inheritance recently but, because they are over 80, this does not affect their Pension Credit. They are using the money to pay for more carers so that they can stay in their own home for longer and are very grateful.

bengal-stripe

Pollycat wrote: »

So to me, that sounds like the guarantee pension credit would continue to be paid even though savings (as a result of the inheritance) have inceased.

However, if you are in receipt of housing benefit and council tax benefit you do have to tell the council about changes in your income and savings.

So, the question from me is - if you are still in receipt of guaranteed pension credit, do you still continue to get CTB & HB even though your savings are in excess of £16000?

It is my understanding, if person over retirement age is entitled to guaranteed pension credit,
(any amount, even if it is only by 1 pence a week), the s/he is entitled to full housing and council tax benefit.

rachyroundbum

Right, let's get one thing straight.

HE HAS NO INTENTION OF CONTINUING TO CLAIM BENEFITS ONCE THE PAYMENT COMES THROUGH. THAT WASN'T WHAT I WAS ASKING, AND I DIDN'T SAY THAT IS WHAT HE WANTED TO DO.

The question, if any of you bothered to read the OP was would the government FORCE him to spend it ALL, EVERY LAST PENNY, on ct and rent, with no room to spend?

For example, if I was unemployed and having ct and hb paid for me, and I got a job, I would pay my council tax and rent out of my wages. I would then have x amount left to spend on what I want. Will my dad be allowed to pay the ct and rent and have, say £100 left over each month to spend on what he likes? It may be more, it may be less, but will he be able to allocate himself money, AFTER he has paid the ct and rent HIMSELF to spend on what he wants each month? OR WILL HE BE FORCED TO SPEND EVERY LAST PENNY ON NOTHING BUT RENT AND COUNCIL TAX. To simplify it some more, if he got £30,000 inheritance, would he be forced to spend exactly £30,000 over x amount of year ONLY on ct and rent?

That was the question, it was very simple if anybody bothered to read the OP.

Whiteknight

rachyroundbum wrote: »

Right, let's get one thing straight.

HE HAS NO INTENTION OF CONTINUING TO CLAIM BENEFITS ONCE THE PAYMENT COMES THROUGH. THAT WASN'T WHAT I WAS ASKING, AND I DIDN'T SAY THAT IS WHAT HE WANTED TO DO.

The question, if any of you bothered to read the OP was would the government FORCE him to spend it ALL, EVERY LAST PENNY, on ct and rent, with no room to spend?

For example, if I was unemployed and having ct and hb paid for me, and I got a job, I would pay my council tax and rent out of my wages. I would then have x amount left to spend on what I want. Will my dad be allowed to pay the ct and rent and have, say £100 left over each month to spend on what he likes? It may be more, it may be less, but will he be able to allocate himself money, AFTER he has paid the ct and rent HIMSELF to spend on what he wants each month? OR WILL HE BE FORCED TO SPEND EVERY LAST PENNY ON NOTHING BUT RENT AND COUNCIL TAX. To simplify it some more, if he got £30,000 inheritance, would he be forced to spend exactly £30,000 over x amount of year ONLY on ct and rent?

That was the question, it was very simple if anybody bothered to read the OP.

No

He can spend the money on whatever he wants, however I would always advise that he does not go "mental" and blow the lot in a couple of weeks and then reclaim Pension Credit.

You would only need to Google "Deprivation of Capital" to understand why.

As the savings reduce naturally they could become entitled to Savings Credit and then Guaranteed Credit. Of course they maybe required to provide evidence of where the money has gone but a lot of this would depend on the amounts involved and the length of time which has passed.

skintandscared_2

rachyroundbum wrote: »

Hi,

My dad is due to recieve an unknown sum in inheritance (it's currently unknown because the debt of the estate is still being paid). He lives with my mum, who works part time, and they are in receipt of Council Tax benefit, Housing Benefit and pension credit.

They are under the impression that the Government will FORCE them to spend whatever my dad receives in inheritance on council tax and housing benefit, with no room for him to "enjoy" the money.

Is this true? Will they have no control over what they spend? After the death of his mother, and ongoing illness on his side, he basically just wants to freedom to book a mediterranean cruise, buy a decent second hand car and buy half a caravan with his sister (an absolute total cost of £15,000) and a new fridge.

I have read online that there is a loophole - basically because he didn't know he was going to receive that sum of money it would be treated the same as a lottery win???

Any clarification is appreciated, I hope I have supplied enough information for those in the know.

This is what you initially said. Where did you say your father would no longer claim benefits? If your father doesn't claim benefits he's under no obligation to declare this money to anybody and can spend it on what he likes. The only issue would be if he spent a huge proportion of it very quickly and then re-applied for benefits. If they wanted to look at his recent spending they may decide that he'd purposefully disposed of the income so he could re-apply for benefits. There may be a period during which he's expected to live off this money although I don't know how long it would be - probably dependant on how much he inherits.

By the way, just so you know, I've never claimed a penny in any sort of benefit and have worked since I left college at 17. My partner has a debilitating condition and has had several years when he couldn't work but we didn't claim anything and I had to try and support us both, which is where the debt came from. Unlike your father, I didn't go bankrupt and instead have chosen to do a DMP which means I pay every penny back. For someone who doesn't like being judged, you are very judgemental.


PS, right I have now read through every post of yours on this thread and nowhere prior to post #47 at 5.13pm today (i.e. your last post) did you say that your father would no longer claim benefits after receiving the inheritance. Slightly important information, in relation to the questions you are asking...

davefrombristol

Hi, If your father has to declare capital of say £30,000 ( inheritance + any other capital he already has ) and from that point on is above the £16,000 threshold - he would be well advised to keep a record of his spending. If the rent is say £7000 a year then after 2 years of him paying the rent from his savings he would be perfectly entitled to claim housing benefit ( £10,000 lower threshold - £16,000 upper threshold with £1 - £500 means that just under £16,000 savings would reduce his entitlement by only £12 a week.

Keeping a record of money spent - 2nd hand car, fridge etc and any other essential purchases might reduce the length of time that he waits before reclaiming HB/CTB - From what I gather if when he re-applies he is turned down then an appeal might well be successful if it can be shown that the items bought were essential and needed.

davefrombristol

Tory - There is the term "diminishing capital" - I'm sure you can logically work out that if you are not working but have savings and have to pay Rent & Council Tax for where you live then where do you think the money has to come from ? Savings obviously so if like I said your rent is £7,000 a year and your £14,000 over the £16,000 threshold then 2 years paying Rent would see your savings diminish down to under the threshold.

By the way that is without any lavish savings and without replacing the fridge even ! - let alone any holidays !

I take it your not reporting me for anything are you ?

skintandscared_2

exactly, davefrombristol. So if the OP's father spends the amount she has suggested (no more than £15k, and is receiving "approx" £30k), that "surprisingly" takes him just below the threshhold and he can recommence claiming benefits...

I believe that Tory indicated she had reported the OP (original poster) for one of their posts. Probably the one where she uses the "c" word. Hope she doesn't kiss her father with that potty mouth....

davefrombristol

But why can't any of you that supposedly knows benefit law far more than I do simply answer the OP original Q logically.

The mere mention of of a Holiday Cruise simply sends some of you off on some sort of crazed state of mind about fraud fraud fruad.

If the OP father spends £5,000 on a cruise then he will simply have to wait till he has £16,000 less £5,000 before he rightly claims any means tested benefits he is entitled to.

skintandscared_2

davefrombristol wrote: »

But why can't any of you that supposedly knows benefit law far more than I do simply answer the OP original Q logically.

The mere mention of of a Holiday Cruise simply sends some of you off on some sort of crazed state of mind about fraud fraud fruad.

If the OP father spends £5,000 on a cruise then he will simply have to wait till he has £16,000 less £5,000 before he rightly claims any means tested benefits he is entitled to.

With all due respect, several posters have pointed out the deprivation of capital rules. The OP mentioned not only a cruise but a car, fridge and 50% share of a caravan. Each on their own (aside from, possibly, the caravan) would be absolutely fine, I'm sure. How many regular workers can afford to have a £5k holiday and buy those other things in the space of a couple of months? Very few! Why should those people subsidise someone on benefits, enabling them to do it?

It has already been pointed out to the OP that if her father did spend down to the savings threshhold, it is LIKELY that the authorities would reduce his benefits thereafter due to deprivation of capital. If the OP wants a definitive answer it's probably best to phone the DWP herself and find out what purchases would be acceptable in his situation and how much he can realistically spend without incurring their wrath.