Should I pay tax on regular money from parents?

sue1953

I have checked in the CPAG book today (page 897) It states that a regular voluntary payment is one given without expecting anything back in return and is ignored in the calculation of means-tested benefits. It goes onto then talk about people being involved in trade disputes which have different rules (not going to go into them here).

It then goes onto say that payments from a former partner, or the parent of your child are dealt with as maintenance. Maybe this is what is meant as a 'liable relative'. If you receive spousal maintenance (not common these days I know) from your former partner then £15.00 per week of that is disregarded when claiming means-tested benefits and the rest is taken into account. As we know all maintenance received for children is disregarded. Irregular voluntary payments are treated as disregarded capital.

Most people claiming benefits do not know that voluntary payments should be disregarded and when they declare them to the DWP/LA, they are used in the assessment of their benefits. DWP/LA do not have the time or resources to check where the payments come from and whether they are voluntary or not.

The client I mentioned above received £250 per month each from his two brothers and all of this payment of £500 was disregarded from his income-based JSA. We argued that it was given voluntarily and nothing was expected back in return.

zzzLazyDaisy

Thanks for this explanation Sue.

It does seem, from what you say, that the vast majority of voluntary payments (from relatives at least) will be disregarded for means tested benefits purposes - and if they are not, the decision should be challenged.

My only comment - on a purely pramatic and practical basis - is that personally I would still avoid receiving regular monthly payments in that situation. This is because if/when bank statements are requested in support of the claim and if/when the regular monthly income is questioned, it is likely to be a lottery whether you get someone who truly understands the rules - and even if you eventually get to the right end result, it could generate an awful lot of stress in the process.

As I say, that isn't a comment on the legitimacy or otherwise of such payments, but a practical point of view because I have seen the anxiety and stress this can cause, especially when ordinary people who don't understand the rules get caught up in the system.