Inheritance affecting benefits

Rowansceptre

Hi,

My partner and I have been together for about 5 years now. We have 3 children, 2 from a previous relationship and our youngest who is 3.
3 weeks after our child was born, my partner had a stroke so she now claims higher rate DLA and I receive carers allowance. When my partner had the stroke, I had to leave my job and when she came home after 6 months I became her sole carer as well as looking after the 3 children.
After the death of both my partners parents, she has subsequently found out that she will soon be in the receipt of about 50k. We receive all available benefits and I know that income will also affect it, but we live in a housing assosiation house and I cannot work. I am unable to work as she is not independent and cannot look after 3 young children while I am working full or part time.

Obviously I don't want to get into trouble by being fraudulant with any benefit agencies, I want to do it all legally. From what I have read so far; as soon as my partner receives this money, all our benefits will be stopped and we will be expected to live off the inheritance until it's gone. This wouldn't be a problem for your 'average Joe', but like I said; I cannot work as my partner has no independence due to paralysis and myself being a carer and parent for 3 kids.

Does anyone have any advice or information on how we would sit with our benefits?

Thanks.

dseventy

DLA will not be affected as its not means tested. Child benefit will not be either.

All means tested benefits (council tax, housing benefit etc) will be and you will need to declare the 50K.

Apart from that I am not sure what advice you are after?

D70

Rowansceptre

Well, I read in another thread a similar situation and people slammed the guy by saying unhelpful things like 'solve your problem by getting a job'. I can't go to work in my situation, so do you think that would be considered by the benefits people.
Obviously we're going to declare the money. Don't fancy living in fear of getting caught! We are honest people like everybody else after all.

Thanks for the info about DLA and child benefits not being affected though. That's good to know.

RAS

The limit below which benefits are unaffected is £6K. Above that but below £16K, you get a proportion of the meanstested benefits.

Over £16K, you lose most means-tested benefits like HB.

rogerblack

As dseventy said - all means-tested benefits stop, and you need to live off savings.

Things to bear in mind are:
You can't give away, spend frivolously or not accept the money. If you do this you risk being treated as if you still have it.
'notional capital'.

While of course you're free to spend the money as you choose, when you come to the point that you can reclaim benefits (as your savings fall past 16K), you may be expected to explain how you spent it.
The only way you can without uncertainty spend on large items is to ask prior approval from the DWP that these are acceptable. Otherwise you risk a later decision that they were not.
In addition, you should still be eligible for carers allowance, and possibly a reduced rate of council tax (a slight reduction, not large)

There is no legal way that without the DWPs prior approval you can save most of this money for a rainy day. (purchasing a more suitable house may be the only thing possible, but probably not with 50k)

Needless to say - prior approval is unlikely.
http://www.dwp.gov.uk/docs/dmgch52.pdf - these are the capital rules for ESA - other benefits are similar or identical.

dseventy

rogerblack wrote: »

You can't give away, spend frivolously or not accept the money. If you do this you risk being treated as if you still have it.
'notional capital'.

I can only "thank" rogerblacks advice once and have done so, its very good advice.

Most people (and I dare suggest people might post on here) about "spending" it, or giving it away, or paying off a debt (that is not required to be paid), even inventing debts (like to a family/friend), all to get back to the position you were before you get it.

None of that will work.

I would look at it from the "we are self sufficent" for a while POV.

D70

Rowansceptre

Thanks for all of the info. It has been enlightening.
We would love to buy a house but I can't see how it's at all possible to house a family of 5 with that small amount of money. We do feel a little deflated as my partner had to lose both parents to get this inheritance and I don't think I could earn enough money to cover child care and adult social care costs as well as general bills without living off the inheritance until it's gone.

Rowansceptre

What about the possibility of a mortgage? Bearing in mind there are 5 of us.

Dognobs

Cake and Eat it comes to mind!

Oldernotwiser

A regular poster was in a similar situation recently and was told categorically by the authorities that she would be considered to have deprived herself of the capital if she used her inheritance to buy a flat with the money, so I would be wary of doing this.

However, it may well be possible to use some of the money to make adaptations to your house to make it more convenient for your wife and buying mobility equipment is likely to be approved as well.

dseventy

Rowansceptre wrote: »

We do feel a little deflated as my partner had to lose both parents to get this inheritance

This kind of mindset really gets peoples upset here.

Its upsetting that your partner lost her parents, but they left her (and you and your kids) some money to make your life better.

Since no-one in the house earns a living, its a chance to be self-sufficient and look after your family without someone doing it for you.

Don't look at it as a deflating experience, look at it positively.

D70