Protecting savings from means tested benefits

BigKeith

Hi all,

I became disabled a few ago and recently recieved a good compensation settlement. We plan to buy a new house which would be more practical for my disability. My compensation went into a trust account set up by the law firm, this is protected from the means tested benefits we recieve; Working and child tax credits.

Our current house is not in the greatest shape and i feel i may struggle to get a quick sale that i desire. Iam in the fortunate position of being able to buy a house outright with my compensation. If i bought a new house and then sold my current house at a later date i would then have money to pay my mortgage off but i would still have a resonable amount of money left (40K ish). My question is this, i persume this would greatly affect my benefits, is there away of saving/investing this money to protect my benefits.

I dont want to seem a benefits manipulator, i have a low payed job and two kids and the benefits we recieve is used correctly. The money i would have left over after the mortgage i plan to keep for the future, retirement,disability aids/adaptions etc, and i dont want to lose it on bill etc.

Any advice or suggestions on this matter would be greatly appreciated. I know the simple option is too sell my current house first but i just want to be aware of all option.

Thanks in advance
Big Keith

sleepless_saver

There are no capital limits for tax credits, but income from the £40k capital would be taken into account. However the first £300 of income from capital is ignored, so I don't think you should run into much of a problem with your £40k.

You could run your figures through this benefits checker, once with the £40k and once without so you can see the difference.

sleepless_saver

Tory70 wrote: »

Any capital that is left after the sale of your current home will be offset against your benefits. In other words, you will lose all means tested benefits until you are below £16k - then you will lose some of your means tested benefits on a sliding scale. If you try to hide/give the money away of spend it frivolously you will fall foul of deprivation rules.

This is not true for tax credits. It applies to housing benefit, council tax benefit, income support etc. Might be an idea to check your facts before you post next time.

BigKeith

Thanks for your reply. However i feel the fact that you dont know my full situation regarding my disability may have led you to think i'm trying to swindle the system. I cetainlatley have no intentions to go on extravagant spending sprees. My question i believe is valid for my situation and should not be used to judge me.

NASA_2

sleepless_saver wrote: »

This is not true for tax credits. It applies to housing benefit, council tax benefit, income support etc. Might be an idea to check your facts before you post next time.

To be fair the the person you quoted, I was fairly close to posting something similar, then I remembered I jumped the gun when someone mentioned means tested benefits and they were talking about Tax Credits. They arent generally thought of as means tested even though they really are.

sleepless_saver

NASA wrote: »

To be fair the the person you quoted, I was fairly close to posting something similar, then I remembered I jumped the gun when someone mentioned means tested benefits and they were talking about Tax Credits. They arent generally thought of as means tested even though they really are.

True, I was just provoked by the accompanying comments directed unfairly at the (newbie) OP!

BigKeith

sorry i thought i may get some rounded sensible advice but instead some people like to turn it in to petty bickering. i feel you have got the hump because you work so hard for your money, well done you!

BigKeith

Back on topic, am i able to use capitol bonds or have i misuderstood how these work?

HappyMJ

BigKeith wrote: »

Back on topic, am i able to use capitol bonds or have i misuderstood how these work?

I would say the only way you could do it is to sell the current house first and then use the funds to buy another house therefore not touching any of the money in the trust fund. I can't see any other way around it. Capital bonds count as capital unless they are in the trust fund in your case in which they would be excluded.

Trust funds work like ISA's once you take the money out you can't put it back.

RAS

Can I remind you about the rules for this forum as set dwon by MSE Dan?

Hi folks,

We wanted to draw your attention back to this notice by Martin, and this post that he made over the weekend:

http://forums.moneysavingexpert.com/...3&postcount=16

The benefits board has been consuming a disproportionate amount of the forum team's time over the past few months, and it is vital everyone who psots here reads these notices.

The key point is this: "Want to discuss the benefits system? Go to the discussion board". This board is for helping people get what they are entitled to.

So, these general rules will continue to apply, and the forum team will be taking action against any breaches of these over the next few weeks...

IN THE BENEFITS BOARD

This board is for people to work out what they are entitled to, and we hope other forummers will continue to provide invaluable help in this.

However, anyone disrupting threads in this board with their views on the benefits system, making impolite comments about benefits claimaints, or taking part in arguments (whether or not you started them) will have action taken against them

If you spot a thread promoting benefit fraud, please report it to abuse.

IN DISCUSSION TIME

As long as opinions on the benefits system are expressed politely, and refrain from personal comments, then debate is totally allowed within Discussion Time.

Please do not take part in bad-tempered arguments in Discussion Time, and accept that everyone is entitled to their views. If you do not feel you can participate in debates in that board without becoming offended or argumentative, please refrain from posting in those discussions.

Obviously, posts which break the forum rules should still be reported to abuse and you should NOT engage in discussion about the rule-breaking. The forum team are obliged to read through the whole of any discussion so that they can make a fair decision, and hundreds of argumentative posts massively increases the reaction time.

Thanks for your cooperation.

Dan

RAS

Op

I suggest you ask for advice somewhere where people actually know the rules.

I am aware of one poster on this forum who was allowed to sell her current house and move into another house which could be adapted to the needs of her disabled daughter, without losing her capital. There was quite a short timeframe during which the funds where not counted for benefit purposes.