ESA, DLA, Restrictions on saving

Fozzgig

Hello

I'm here on behalf of my daughter. She has autism and is living with her partner (also with autism). They receive ESA (hers is the 'support group' one and his is the one up from that). They also receive DLA and housing benefit.

Their monthly expenses are low and they're now in a ridiculous situation of being given lots of 'extras' due to their disabilities that they have a whopping £1300 a month excess (yes I know that is madness!). They are allowed £5,000 in savings I believe but none of us know what to do with the excess.

Her dad is on benefits so can only take a little and I can't take it either.

I really don't know what to advise her to do. It seems silly to spend it for the sake of it when it could be put away for the future if they fall on hard times but the whole situation feels uncomfortable, confusing, and a little bit scary.

Any ideas? :eek:

Many thanks

tomtontom

Anything over £6,000 will reduce their entitlement and once they reach £16,000 their entitlement to means tested benefits would cease.

What should they do with the money? Live on it! Spend as they normally would and declare when the relevant thresholds are reached for their entitlement to be adjusted.

Fozzgig

Thank you!

They'll have a job spending it (I wouldn't!) but I get exactly what you mean.

rogerblack

Fozzgig wrote: »

Hello

I'm here on behalf of my daughter. She has autism and is living with her partner (also with autism). They receive ESA (hers is the 'support group' one and his is the one up from that). They also receive DLA and housing benefit.

Any ideas

My understanding is it would be legal to - just before each benefit is paid each period, transfer the unspent benefit into a trust fund.

This would not be capital at this point, but still income.
Therefore, it cannot be deprivation of capital.

A properly setup trust fund could in principle cover certain expenses in the future, even if eligibility changes, without counting as capital.

Please note - this is only my interpretation of the law - you would need to find a solicitor qualified in benefits law to advise on this, as errors could remove entitlement to benefit. To reduce risks, you must inform the DWP you are doing this first.

Fozzgig

Good advice, thank you Roger, I'll do some investigating

rogerblack wrote: »

My understanding is it would be legal to - just before each benefit is paid each period, transfer the unspent benefit into a trust fund.

This would not be capital at this point, but still income.
Therefore, it cannot be deprivation of capital.

A properly setup trust fund could in principle cover certain expenses in the future, even if eligibility changes, without counting as capital.

Please note - this is only my interpretation of the law - you would need to find a solicitor qualified in benefits law to advise on this, as errors could remove entitlement to benefit. To reduce risks, you must inform the DWP you are doing this first.

benniebert

rogerblack wrote: »

My understanding is it would be legal to - just before each benefit is paid each period, transfer the unspent benefit into a trust fund.

This would not be capital at this point, but still income.
Therefore, it cannot be deprivation of capital.

A properly setup trust fund could in principle cover certain expenses in the future, even if eligibility changes, without counting as capital.

Please note - this is only my interpretation of the law - you would need to find a solicitor qualified in benefits law to advise on this, as errors could remove entitlement to benefit. To reduce risks, you must inform the DWP you are doing this first.

I agree with this view. I started a family Discretionary Trust a while back after coming to the same conclusion. With unspent income I top it up every 3 months. At the moment there is slightly over £86,000 in it. Being a discretionary trust of which my wife is a beneficiary, along with our two 'children' (because I am the Donor and would cause problems with the tax man if I was a beneficiary also) We keep only a small amount of capital for emergency purposes in our day to day accounts. Doing this, and also having put our the home in the trust, technically on paper we are not that well off. Our main concern is to avoid in the years to come, the council demanding payment for any care that either of us may need. We do obviously have the ability to top up any shortfall but that will be our choice.

Fozzgig

Thank you for sharing that . I presume you saw a solicitor who was experienced in benefits law?

benniebert wrote: »

I agree with this view. I started a family Discretionary Trust a while back after coming to the same conclusion. With unspent income I top it up every 3 months. At the moment there is slightly over £86,000 in it. Being a discretionary trust of which my wife is a beneficiary, along with our two 'children' (because I am the Donor and would cause problems with the tax man if I was a beneficiary also) We keep only a small amount of capital for emergency purposes in our day to day accounts. Doing this, and also having put our the home in the trust, technically on paper we are not that well off. Our main concern is to avoid in the years to come, the council demanding payment for any care that either of us may need. We do obviously have the ability to top up any shortfall but that will be our choice.

caggszy

omg i really need someones help, im new to all this so its all strange to me but im in despair can someone help me please.

tea-bag

They could always give it back

WillowCat

They could contribute to a personal pension. As non tax payers I think they can contribute £2,880 each every year. The government will top this up to £3,600 each.

Fozzgig

I didn't know that - thank you

WillowCat wrote: »

They could contribute to a personal pension. As non tax payers I think they can contribute £2,880 each every year. The government will top this up to £3,600 each.