House benefit savings rules Help

jonesa7777

My mum (56) who is a widow has sold a flat recently and received about £20,000 for it. Then after her friend's advice she invested the money in buying a static caravan house in her name, which he ( a builder) did up and the caravan is being sold now bringing her ( after all expenses) about £3,000 profit. So in total, she will have about £23,000.
She lives in a rented flat (sharing with a friend). Ever since selling the flat, before investing in the caravan she wanted to give some of this money to myself and my sister as she feels we did not have any inheritance from my dad (and the flat although in my mum's name was worked and paid for by both of them).
I realise she can give tax free £3000 a year to her children, so for two years she can give away £12,000 in total. Can she give this money to us?
The situation is complicated by the fact that although she never claimed any benefits she has had to reduce her working hours recently (because of health issues) and was thinking of applying for some help from the council (housing benefit) As I said before at the moment she was paying her rent from her wages while all of the capital was put into the purchase of the caravan. If she gives £12,000 to us thus reducing her savings to £11,000 will it be treated as deliberate way of reducing her capital?
She would not like to do anything illegal/ unethical. Any advice/ help is much appreciated.

tomtontom

Giving away money is likely to be deprivation of capital. The amounts you refer to are tax rules, and have no relevance to benefits.

marliepanda

No she can't give away money to reduce her savings to entitle her to benefits. If your mum cannot afford to pay her bills then your 'inheritance' is irrelevant. She needs the money she worked for with your Dad.

Mr_Lawnmower

I agree with tomtontom and marliepanda.


The benefits system has a concept known as "intentional deprivation of capital". If you give away capital with the intention of qualifying for benefit, you are treated as if you still had that capital.

If the OP's mother did pass on some of the capital to others (not just her children) and this was discovered, she would not be entitled to any means tested benefits, including Housing Benefit, because she is over the upper capital limit for a non-pensioner of £16k.


It is a deliberate policy that people cannot pass on capital to others before claiming means tested benefits and help with care costs. From the original poster's description, the mother is likely to need to live off some of that capital because of her reduced income, which may well bring her below the upper capital limit.

Jobseeeker

It would be considered "deprivation of capital." She needs to just spend her money as she normally would, paying rent and bills etc then when her savings are below £16k she can apply for housing benefit

jonesa7777

Thank you for your prompt replies. Just to add she had planned to give us the money anyway. Is she allowed to do that? Now she has not applied for the housing benefit yet. She is considering all of the options. Obviously money is too little to buy anything.
Supposedly she does not apply for a h.b. as it was never her intention and she gives us money. Is that ok?

tomtontom

jonesa7777 wrote: »

Thank you for your prompt replies. Just to add she had planned to give us the money anyway. Is she allowed to do that? Now she has not applied for the housing benefit yet. She is considering all of the options. Obviously money is too little to buy anything.
Supposedly she does not apply for a h.b. as it was never her intention and she gives us money. Is that ok?

It is her intention, otherwise you would not be asking the question. Please do not ask for help in illegitimately claiming benefits.

marliepanda

jonesa7777 wrote: »

Thank you for your prompt replies. Just to add she had planned to give us the money anyway. Is she allowed to do that? Now she has not applied for the housing benefit yet. She is considering all of the options. Obviously money is too little to buy anything.
Supposedly she does not apply for a h.b. as it was never her intention and she gives us money. Is that ok?

She can do what she wants with her money However, when she comes to ask for HB they will say 'no' and act as if she has still got the money. They will work out how long they would expect her to take to spend £12k, and she won't get any HB until that time.

bloolagoon

jonesa7777 wrote: »

Thank you for your prompt replies. Just to add she had planned to give us the money anyway. Is she allowed to do that? Now she has not applied for the housing benefit yet. She is considering all of the options. Obviously money is too little to buy anything.
Supposedly she does not apply for a h.b. as it was never her intention and she gives us money. Is that ok?

Of course she can give you money. It's hers to do with as she wishes.


But if she ever needs to claim benefits they could refuse them as a result they decide she gave money away. I'd keep the caravan personally to see how things work out.

jonesa7777

To Tomtontom: Please do respond again.
To everybody else: Thank you. I was hoping somebody would help with a legal, ethical way of doing something with the 23,000 she has. I know she perhaps could buy 25% of a shared property. It is an option she considers as well but she was advised against it as apparently it is very difficult to sell in the future and you also lose out on the value of the share with the passage of time. Any other ideas? Thanks in advance.

jonesa7777

To: Bloolagoon, I just noticed your suggestion about the caravan. Can you elaborate on that? Thanks