Temporary savings and benefits.

Jelly_legs

Hello,

Wonder if anyone can advise on the 2013 regulations.

I was recently widowed. My Husband was killed by a driver who has pleaded guilty to death by dangerous driving and a variety of other charges. I'm disabled and am self employed.

So, I receive DLA, child benefit, tax credits (inc disabled worker element) and widowed parents allowance.

My house is mortgaged but after DH died I realised that we had no mortgage protection. It was built into the endowment which Hubby cashed in November as it was not doing much. He was due to begin a much higher paid job 2 weeks before he died and was about to change mortgage to a repayment version and have life insurance.

I'm not making any mortgage payments at the moment. My solicitor is putting together an accident claim against the offenders insurance and the company are very happy to make an interim payment. I need some adaptations to my home to accommodate my disability(applied to social services but they realise that I will receive "compensation" so it's been refused), some repairs done on the property etc.My solicitor has put together a proposal to the insurance company for an amount to be paid as an interim payment. My problem however, is that I will not be immediately spending some of the money, even though it is "earmarked" for essential building work. How much can I have as savings before I lose the above benefits, please? I know DLA and CB are not means tested.

I'd like to say that I feel really upset that I'm making this claim, it feels like "making money" out of DH death but I can't manage without his wage. Had he survived but had been left severely disabled I would have fought hard to get every penny to enable him to have a best life as possible.

HappyMJ

You aren't making money from it...don't feel like that. Speak to the solicitor about a trust. If you need to have building work done then get it done and pay the builder. If it's to maintain the building then I can't see it being assessed as deprivation of capital. You can also pay any arrears on the mortgage straight away without any fear of DofC. How much do you think you might have?

Horseunderwater

Not only that but the benefits you currently get are not means tested at all - so at present no capital limits problems - so carry on getting it all sorted out with the solicitors help re the compo.

Jelly_legs

Thanks so much for the replies. What does DofC, mean please? (I'm thick!)

It sounds as though once mortgage arrears are paid off, I'll pay off my yearly Council Tax, Water rate, insurance (all monthly DD at the moment) I will have about £20k but the quotes for the building work are £17.5k

The builder I trust won't be able to begin until July/August and the money should come through in about 3 weeks.

So, am I right in now thinking that even if the £20k sits in my account for a few months, I don't need to inform the tax credits people or DWP.

Sorry, there's so much going on atm.

rogerblack

This is a complex area, so this may be partially wrong.
In general, money from a personal injury claim may be ignored for benefits purposes - but only as it relates to the claimant.
Money from personal injury or wrongful death of a partner is treated as any other income.

You cannot arrange to have it put in a trust so that it does not count for benefit purposes - this would be intentional deprivation of capital.

As to what it affects.
In general, for means tested benefits, at 6K, it starts, and then reduces by a pound for every 250 of capital.
Up to a limit of 16K, at which it goes away.
https://www.gov.uk/widowed-parents-allowance/eligibility - doe not mention a means test.
There is no limit on capital on WTC.
Unless the payout is large enough that it caused income of enough to kick you out of WTC - I don't see that you're affected at all.

Jelly_legs

http://www.hmrc.gov.uk/leaflets/wtc2.pdf I found this. Page 22 refers to capital. But it's nonsensical that someone could have £££££££££'s of capital but be on a low working income so could receive full tax credits??

rogerblack

Jelly_legs wrote: »

http://www.hmrc.gov.uk/leaflets/wtc2.pdf I found this. Page 22 refers to capital. But it's nonsensical that someone could have £££££££££'s of capital but be on a low working income so could receive full tax credits??

It being illogical does not mean it's not the law.
You can claim carers allowance while earning £1000 a week, if you pay in £2000 a week into a personal pension. (well, a little less).

Employment and support allowance is not officially related to your ability to work.
You can claim ESA and working tax credit together. (permitted work of over 16 hour earning £20 or less).

poppasmurf_bewdley

The whole idea of insurance is "to put you back into the position as if the incident had never happened".

I know it cannot bring your husband back, but it should replace everything that he would have done.

Don't feel guilty. It is your right to have a full payout to put you back where you would have been if the incident hadn't happened.

Elzmumof3

no other advice, just wanted to say, sorry for your loss, and please don't feel guilty. It can't bring your Husband back, but it can help you now .

princessdon

Don't feel guilty at all.

Plus the benefits you state are not means tested (yet), though as you say it is a strange system that you can have vast savings and still claim benefits.

This is being removed when UC comes in but for now interest over £300 PA is the only consideration.

Sorry to hear of your loss.