Inheritance and benefits

TELLIT01

rogerblack's lastest post seems little more than rumour spreading and scaremongering. Any Government may do anything to any benefit in the future, but people asking questions really need answers based on the reality of here and now.

BigAunty

miyukimatsumoto wrote: »

Although her father is ill, he's pretty independent and hopes not to go into a care home, though I suppose that if he did she could use the savings first, then sell the house if she needed to ( or have someone sell it for her).

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I hope this doesn't come across as pedantic but it is he that will have to use his savings and capital to pay for a care home - she is not responsible for this unless she gets power of attorney and is authorised to do this on his behalf - while he's alive, it's still his money unless PoA is in place.

The Age UK website has information on what happens to elderly people's savings and capital who need means tested services like a residential care home.

If she is on income based benefits that get affected by a future inheritance, note that she is allowed to spend her windfall on ordinary every day living expenses without it being considered 'deprivation of capital' (i.e. intentionally spending/gifting away the new capital deliberately to be eligible for benefits).

The purchase of a car, educational or employment training course, private treatment of her long-standing mental health condition would be seen as normal expenses (in my opinion, and assuming she doesn't buy a Ferrari).

She might be persuaded to stop considering the potential inheritence as a burden, but as a benefit - she could study a degree on the OU, have greater independence by buyning her own motor about and pay for the best treatment for her MH issues that have incapacitated her since her teens.

She could also be persuaded that there is nothing wrong with paying for her ordinary living expenses out of her newly found capital, that's what most people with means do, and that she will go back onto benefits when she meets the thresholds again.

It appears she has never been truly independent and has the usual anxiety about withdrawal from benefits that we often see on this forum from long-term claimants (never a generous income but a reliable one, cushioning her to a degree from economic and other realities)

Other options are that she sells the house, cashes in the premium bonds and uses all but 6k of the remaining capital to purchase a new property outright (6k being the maximum sum in capital allowed before it starts to affect means tested benefits like Job Seekers or ESA (income based).

Or cashes it all in and pays it into a pension (since she is worried about her future and can look forward to a generous retirement income rather than a state pension around the sum she probably gets now. It might mean an extra £100 to £200 a week when she retires, paid on top of her pension). I don't believe these actions would be considered deprivation of capital but welcome any debate or challenge about this.

rogerblack

TELLIT01 wrote: »

rogerblack's lastest post seems little more than rumour spreading and scaremongering. Any Government may do anything to any benefit in the future, but people asking questions really need answers based on the reality of here and now.

To a degree, yes.
However when one of the proposed solutions raised is a trust - which could avoid any means testing issues - stating that the currently un-means-tested PIP may be means-tested at some point in the future is somewhat relevant.
I should not have stated the original so baldly.

AngelOfTheNorth

evenasus wrote: »

Inheritance tax, is the government 'taking' a persons earnings/savings that they have already paid tax on twice.

Sometimes. Not necessarily. By no means has all money subject to IHT been taxed at all previously.

Ames

I'm in a similar position but with a much smaller inheritance.

I've gone through lots of emotions, but now I'm looking forward to being off benefits. I'm scared that I might have a manic episode and blow the lot, but other than that I'm seeing it as a positive thing.

I'm really looking forward to a few years free of the constraints of means tested benefits. Without watching the news terrified of the next benefit change. Without worrying that during depression I'll miss an important letter from the DWP and have them stopped. Without worrying what'll happen if the washing machine breaks down. Being able to get off the 'buy cheap buy twice' roundabout, and buy quality that will last.

I'm hoping that without all that stress making my mental illness worse, I can concentrate on doing things that will make it better. Above all, I'm hoping that I can get myself into a position where I won't have to go back on benefits.

But mainly right now I'm hoping that npower get their backsides into gear so that the estate can be wound up and the money handed over!

NYM

rogerblack wrote: »

...........

'Universal' non-means tested benefits do not seem very in-tune with conservative thinking.
Similar noises are being made about the winter fuel payment for older pensioners.

http://www.independent.co.uk/news/uk/home-news/iain-duncan-smith-wants-to-tax-disability-benefits-9775338.html

http://www.thesundaytimes.co.uk/sto/news/Politics/article1467421.ece

From the Times link...

Iain Duncan Smith, the work and pensions secretary, is arguing that disabled benefits should be increased for the poor and subsidised by taxing the handouts for better-off claimants.

He is also pressing a reluctant David Cameron and the chancellor George Osborne to restrict child benefit to two children for new claimants. As well as saving money, he believes it would encourage welfare claimants to have smaller families.


Take a look over on DT.

Many posters believe that someone such as David Cameron for example shouldn't have been able to claim for his disabled son because he is a wealthy man and couldn't possibly have 'needed' the benefit.

Limiting CB to two children for future claimants is a sensible proposal.

TELLIT01

NYM wrote: »

Take a look over on DT.

Many posters believe that someone such as David Cameron for example shouldn't have been able to claim for his disabled son because he is a wealthy man and couldn't possibly have 'needed' the benefit.

Limiting CB to two children for future claimants is a sensible proposal.

Leaving the individual out of the discussion, the problem is where to draw the line. Using a totally arbitrary example. Person 1 has £49,999.99p and is entitled to claim for a disabled child. Person 2 has £50,000.00p and is over the limit. How much health care could they purchase for 1p?
Even existing cut off points for benefit are ludicrous if looked at closely. For example savings under £6k are disregarded, and over £16k disqualify from claiming IR based benefits. In between the claimant loses £1 for every £250 in savings. This means that a single person with £15,999 in savings still received approximately £32 per week, and a couple £73 per week in benefits. Have £1 more and they get nothing. Surely a fairer method would be a taper to £0 benefit, not a cliff to fall off.

NYM

Totally agree about a taper.

(Sorry, I'm doing dinner and haven't got time to answer you properly but didn't want you to think I'd ignored your reply )

miyukimatsumoto

"The purchase of a car, educational or employment training course, private treatment of her long-standing mental health condition would be seen as normal expenses (in my opinion, and assuming she doesn't buy a Ferrari)."

She can't learn to drive as the medication she takes prohibits her, as listed on the DVLA website. As she has psychosis, she can't really learn as she hears voices in her head which stop her from concentrating on anything for any length of time.


"It appears she has never been truly independent and has the usual anxiety about withdrawal from benefits that we often see on this forum from long-term claimants (never a generous income but a reliable one, cushioning her to a degree from economic and other realities)"

To be honest she cannot be independent in any meaningful sense which is a great shame and I am quite unhappy that her father telling her all this in one lump without consulting her mother or any of the others involved in her care as she is now very worried about something that she probably won't have to deal with, at least not in any meaningful way.