Help please re- deprivation of capital

belladonna13

I hope someone can help me understand the deprivation of capital rules because despite asking two solicitors and the CAB I am still totally confused.

I am due to inherit £30,000 very shortly and I am totally aware that I have to declare this to the DWP, I have no problem with this whatsoever, and totally agree with the principle behind the declaration.

I am in receipt of DLA, which I know is non-means tested. I am also in receipt of Income Support, Housing Benefit and Council Tax benefit, which I know are means tested.

What I am confused about is, like many others, how am I allowed to spend some of my inheritance? What is/is not justifiable?

My background is that I worked for almost 30 years and for the last 10 years of my career I had a very enjoyable and highly paid position and thought my life was on course, sadly, that was not to be and in 1995 I had a mental breakdown and was diagnosed with Bipolar Disorder, this resulted in a stay in a psychiatric hospital and on discharge I had to claim benefits. I had never claimed before and was totally lost. I also had osteo-arthritis and a legal executive, who I was consulting about another matter, asked if I claimed DLA, after seeing the way I walked. I did not have a clue what it was, but I was subsequently examined by a Doctor and awarded DLA.(I now also have an heart complaint and cervical and lumbar spondylosis)

To the present, my Father died in April and did not leave a will. I am the only beneficiary. I live a very quiet life and due to my DLA I am able to purchase what I need for my disability and due to my increments on Income Support I am OK financially. Now all this is due to change and rightly so, but it is scary for me, and I really need some help.

I became psychotic with my Bipolar in 2003 and after almost 1 year in a psychiatric unit I could not cope and became homeless and actually lived on the streets, then in an homeless hosted, then in supported accommodation, then in various rented accommodation and now at last I have an HA bungalow (thanks to the mental health services). However, all my furniture and household goods are second-hand and some of them need to be replaced so I am asking if anyone knows can I:-

Replace my washing machine -it is not working properly and was £99, 5 years ago.

Replace my cooker, the oven does not work and I bought it for approx £100 again 5 years ago.

Replace my 3 piece suite - I only need a sofa and chair, the one I have, I have had 5 years and only cost £50.00, it is very uncomfortable and shabby.

The carpets that were left in the bungalow need replacing, can I do this?

I am sorry this is so long, but I feel I need to explain the situation so that all my circumstance can be taken into account.

I would also dearly love to purchase a second-hand car so that I can attend my groups without suffering so much pain travelling.

I do have a few more questions but for now this essay is enough, sorry, and I will ask them later.

I just want to add that the man I saw at CAB asked me how the DWP would know about my inheritance, in such a way that seemed suspect. I want to be totally above board with everything and would appreciate any help, anyone can offer.

Thank you.:)

Mara69

Ultimately, there is no list of things you can and can't buy. You need to keep expenditure reasonable. Keep all receipts and the decision maker will decide if you've deprived yourself of capital in order to claim benefits.

I would think that as long as you're not planning on spending £1,000 on a Miele washing machine you'l be OK. To be honest, the things you've listed wouldn't come to much more than £1k total.

belladonna13

Thank you so much for your quick reply.

I will not be buying anything expensive, but would be nice to buy reliable and so would imagine it would be around £1,000 for household appliances, but would I be able to get a second-hand car? again nothing flash, but needs to be reliable.

I really struggle on the bus because I use a wheely walker and although it does fold up, I cannot lift it on to the luggage shelf and need to do that if there is a buggy or wheelchair on the bus. I live 30 miles away from the nearest town and find it very painful on the bus journey, due to the stopping, starting and lurching of the bus, but my mental health support groups and only friends are there so need to make the journey regularly.

Thanks again Mara, much appreciated.

Mara69

I'm no expert but I would imagine a second hand car would be OK. However, do consider the ongoing costs of a car - MOT, tax, insurance, maintenance etc.

I think in your shoes I would be inclined to write to the DWP, advising them of the items you wish to buy, approximate costs etc.

Keep copies of your letters, all receipts and spend very sensibly. Only purchase what is needed and is reasonably priced. Then, if they do accuse you of derivation in the future you can prove that you contacted the DWP and you kept your receipts. It can only help.

To give you an example of someone who was penalised for deprivation...they 'gave away' significant sums of cash to their children, spent a lot on exotic holidays, bought a number of expensive electrical items but kept no receipts. They were found to have intentionally deprived themselves and were treated as if they still had the money.

septemberblues

I got an insurance payout of £20,000 so I immediately came off IS which meant I had to pay my own council tax, prescriptions etc. TBH it was totally liberating and I enjoyed paying my way again.

Ispent £5,250 on a car,tithed £2,000 and used the rest to live on and to pay my mortgage/council tax etc
After one year I applied for some council tax rebate and was surprised to find that I would be able to go back on IS. I didn't have to explain where the money had gone, I also managed to keep £5,000 in an ISA of which I have £4,000 left for a rainy day.....................

So I think as long as you don't spend ridiculous amounts of money on stuff that £30,000 would be expected to last you about a year and a half or two years. So go and buy yourself some nice furniture and a car

The impression I got was that £20,000 would reasonably be enough to live on for a year, I would guess that is in comparison to a salary of £20,000 pa

pmlindyloo

All the things you talk about seem very sensible and reasonable.

Both of the last posts contain good suggestions/ideas.

We do not know what the future holds as regards the welfare system so I do think it might be prudent to ask and get a written reply and keep receipts.

To be honest no one can really answer your questions (as you have found out from the solicitors and CAB) because there does not seem to be any specific guidance other than you mustn't spend/give away capital in order to receive/increase benefits.

The other part is that a decision is taken on individual cases and so you will hear different stories from people saying different things - not very helpful.

Since you are aware of the issue then personally, if I were you, I would ask. If they won't give you a definite answer in writing then just go ahead and spend as suggested. Nothing you have suggested seems outlandish or done to get benefits asap, just done in a modest way to make your life more comfortable.

Enjoy and try to stop worrying.

belladonna13

Thanks Mara, that is a good idea to write and ask before I buy anything, I will do that. It is hard that it is only in retrospect that they say if it is deprivation of capital or not, not much help after the money is gone.

The example you give, I am not surprised that this was deprivation and this is so far away from what I wish to do, having said that both the solicitors I spoke to straight away suggested a Deviation Order to my son's, and I had to explain this would be deprivation of capital. I lost my trust in them at that point.

Thank you so much, septemberblues, it is good to have someone who went through this process in real life, explain what happened with them.

I actually feel guilty asking about buying a second-hand car, because I do have a free bus pass, for which I am very grateful, but that does not take away the pain.

My poor old dad worked from being 14 until retirement and before that never claimed a penny in benefits, even when he was between ships he would not claim and often took a bucket and sponge and cleaned cars in car parks to earn some money, that was back in the 60's and 70's. I guess he passed on the values, he held, to me, because I do not like claiming and continued to do voluntary work in my field, so I could feel I was not getting benefits for nothing, long after I should have. I worry so much in case I do something wrong.

Lifeforms

It's more keeping track of the bigger payments. So that washing machine, car, holiday etc. Keep the receipts for those.
There is no definition of living costs with the DWP. So basically they can't say this amount is reasonable. It's about being accountable with what you spend. So if for example 3 grand suddenly goes missing, with nothing to say what you spent on it. Also don't forget you will have larger payments out anyway. As you'll be paying full rent, full council tax, water rates etc. If you decide to pay at the start of the year (or rent every 3/6 months for example) so always keep receipts for those.

You need to be able to live on this, it needs to be classed as if you'd earnt the money through work for example, so buy a car if it makes your life easier. Do normal things with it. Have a bit of fun, but live with in your means.

Decide on your own sensibilities. A washing machine at £150 is cheap yes, but maybe it wouldn't last the 10 years with the likes of miele machines (and others out there) so try and future proof yourself if possible, even if they are costlier. After all the output at the start is something you can afford, but maybe not 4 years down the line and things break.

As has been said, no one knows what benefits are like future wise. BUT if you're not working, unable to work etc. Make sure they switch your entitlement to something like incapacity benefit (entitlement only) so that things like your stamp is still paid.

Mojisola

In addition to the things you list, do think about how your health and mobility might change over the next 5-10 years and see if there are things that can be done to keep yourself independent. Would a walk-in shower make life easier? Will a new mattress help you sleep better at night?

Everything you've suggested is very reasonable but make sure you keep receipts in case you are asked to explain where the money has gone.

pmlindyloo

Forgive me for asking but how old are you?

From what you have said about your working life etc I am wondering if you are near the age that you could apply for Pension Credit.

The rules for savings and capital are more generous if you are eligible for PC.

belladonna13

Thank you Lifeforms, I realise, because of my situation, that I will not be able, again in my lifetime, to be in a position to buy major goods, so need to buy reliable goods now. I like the term 'future proof' and I will keep that in mind, when requesting permission.

Mojisola, I am having problems with my mattress, despite having saved up from my DLA and purchasing it new from Dreams 1 year ago. I wake during the night in pain and did not with my old one, so thank you for your reply. I will ask the DWP if I can replace that, in my letter.