Lived off inheritance then claiming benefit?

techwatcher

My sister in law doesn't work due to sickness and has previously claimed benefits. Last year she inherited a considerable sum of money (c. £180,000). She stopped claiming benefits and has been living off the inheritance ever since.

Somewhat frighteningly she will have spent it all soon (let's just say she has 'issues'). She has spent some on house improvements, but most of it on on herself and her plan is to try and claim benefits once she has spent the inheritance money.

Will she be able to claim benefits in this situation or will DWP consider it to be deprivation of capital?

marliepanda

Spending of that level will almost certainly be considered deprivation. Id venture to say definitely!

Home Improvements aren't even necessarily exempt.

Hopefully she bought something she can sell.

What's the average uk wage? 25k? That's 7 years of salary in a year and then some. Of course they won't allow a benefit claim.

BigAunty

Perhaps she should have stuck it into a pension - she could get a large lump sum back in the future - or bought a property to live in. Pension and owner occupation dont have the deprivation of capital issues. Could have done either or both, then started claiming benefits...

tea-bag

marliepanda wrote: »

Spending of that level will almost certainly be considered deprivation. Id venture to say definitely!

Home Improvements aren't even necessarily exempt.

Hopefully she bought something she can sell.

What's the average uk wage? 25k? That's 7 years of salary in a year and then some. Of course they won't allow a benefit claim.

She may have paid off a mortgage, New car a few good holidays it would soon be gone.

marliepanda

tea-bag wrote: »

She may have paid off a mortgage, New car a few good holidays it would soon be gone.

None of which would matter. The OP even says himself that 'some was used for house renovations' so I assume thats the only thing she has to show for it. I assume he would say if she had paid off a mortgage.

180k a year, for someone on benefits so not exactly used to a 180k a year standard of living, is excessive. Its excessive for 95% of the population.

She won't get benefits for years.

NYM

An average spend of £15,000 ? * Even I'd find that tough going...

* per month

marliepanda

NYM wrote: »

An average spend of £15,000 per month ? Even I'd find that tough going...

Just putting that in :P

NYM

marliepanda wrote: »

Just putting that in :P

Thank you ...

konark

Oh, I'd love to be at the interview where she tells the DWP how she's blown £164,000 in a year. Due to the 'notional capital' rules her chances of being able to claim means-tested benefits for the next decade are zero.

I don't know what she spent the money on but I'd bet my pension that virtually none of it will be regarded as 'reasonable' by the DWP, not even the home improvements (unless she is disabled) or paying off a mortgage.

TELLIT01

If she was on benefits until she received the inheritance it's virtually certain that the spend will be considered deprivation of capital. Even if they allow the spend on home improvements it's likely to be a long time before she will be entitled to Income Related benefits.

techwatcher

Thanks for all the responses. She lives in a wholly-owned family property so had no mortgage to pay off. She has spent tens of thousands on the home improvements, including a £13000 kitchen, and much of the rest on jewellery, fashion and furnishings, no doubt none of which will be considered by DWP as 'reasonable' so she is in for a shock when she applies for benefits.

We have been trying to help and advise her and the responses will help our efforts - thanks all.