Lived off inheritance then claiming benefit?

missapril75

techwatcher wrote: »

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.

marliepanda wrote: »

Spending of that level will almost certainly be considered deprivation. Id venture to say definitely!...Of course they won't allow a benefit claim.

There are a lot of assumptions being made.

The first thing that occurs is did the DWP know the reason for the claim stopping?
Perhaps it was "Dear DWP, I know longer need benefits."
Claim closed.
If they did know, did they know how much or did they simply know it was enough to remove entitlement?

The old claim will be archived now. It's entirely possible that even if the sum involved was recorded on the previous claim that it's not going to "show up" when the new claim is processed. If she is asked for backdated statements it might well do. But what if the amounts in the period requested are not high enough to be relevant. For example, what if the balance 8 months ago was £4000?

She might even be congratulated for making £4k last 8 months.

DWP can access bank accounts but usually something triggers this. With no claim held for however long there's nothing to trigger it.

Lastly for deprivation to be decided DWP has to show money was spent with the intention of claiming something that otherwise would not have been due.

Staff may well show the same reasonable indignation as these responses. But that doesn't mean this was why it was done.

All we know is the person is not well. The OP says she has issues. Mental health perhaps?

Of course if the claim was closed with full information it's also possible that there's a record that she was aware of the effect of such a sum and maybe even that she was made aware of deprivation rules.

marliepanda

missapril75 wrote: »

There are a lot of assumptions being made.

The first thing that occurs is did the DWP know the reason for the claim stopping?
Perhaps it was "Dear DWP, I know longer need benefits."
Claim closed.
If they did know, did they know how much or did they simply know it was enough to remove entitlement?

The old claim will be archived now. It's entirely possible that even if the sum involved was recorded on the previous claim that it's not going to "show up" when the new claim is processed. If she is asked for backdated statements it might well do. But what if the amounts in the period requested are not high enough to be relevant. For example, what if the balance 8 months ago was £4000?

She might even be congratulated for making £4k last 8 months.

DWP can access bank accounts but usually something triggers this. With no claim held for however long there's nothing to trigger it.

Lastly for deprivation to be decided DWP has to show money was spent with the intention of claiming something that otherwise would not have been due.

Staff may well show the same reasonable indignation as these responses. But that doesn't mean this was why it was done.

All we know is the person is not well. The OP says she has issues. Mental health perhaps?

Of course if the claim was closed with full information it's also possible that there's a record that she was aware of the effect of such a sum and maybe even that she was made aware of deprivation rules.

You're suggesting she has spend over 150k in four months? They're going to find out. Ridiculous to assume they won't.

Regardless, she has no chance. It doesn't matter if she wasn't aware, it's not a normal or acceptable way of spending money. If her mental health was so bad she should have things in place to stop her. It says sister in law, so I'm assuming there is a partner or at least some other family around her.

Nothing you have said above is going to help with 150k of jewellery. Hopefully she can sell a lot to fund herself over the next years.

FBaby

We have been trying to help and advise her and the responses will help our efforts

But now seems a bit late. Didn't anyone tell her about deprivation of capital and that she was risking finding herself with no inheritance money left and no entitlement to benefits, leaving her with nothing at all for potentially quite some months if not years?

Depending on what issues she suffers from, assuming that they are serious enough to justify her actions, why didn't anyone apply to take over her financial matters? Her behaviour was putting herself at risk.

Caz3121

techwatcher wrote: »

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.

If she was claiming DLA or PIP, this is not affected by capital so would still be in place
It sounds like the benefits she would have been able to claim may be ESA and maybe council tax benefit as no rent or mortgage

The decision maker will decide on how the inheritance would have been expected to last before dropping below £16k. With no rent or mortgage, maybe assume £200 per week for bills/food (complete guess)...which would be almost 15 years...even if the decision maker allows some of the spending, I cannot see benefits being payable for a few years yet

Hopefully there are items that she has purchased that she will be able to sell to pay the bills and food if she is unable to work

dodger1

FBaby wrote: »

But now seems a bit late. Didn't anyone tell her about deprivation of capital and that she was risking finding herself with no inheritance money left and no entitlement to benefits, leaving her with nothing at all for potentially quite some months if not years?

Depending on what issues she suffers from, assuming that they are serious enough to justify her actions, why didn't anyone apply to take over her financial matters? Her behaviour was putting herself at risk.

I have to say that before joining this site I was completely ignorant of things like deprivation of capital and I believe that an awful lot of people are in the same boat, no excuse I know, just saying. I've learned so much simply thanks to this site and knowledgeable posters.

FBaby

I totally agree with you Dodger but I think even without knowing for sure, I would have looked into much sooner than after all the money had been spent.

BigAunty

Deprivation of capital is such a complex area and we've never seen a similar example with an outcome on this forum before. Each decision is made on a case by case basis.

As an earlier posted indicated, the DWP/local council have to prove that she has intentionally behaved this way in order to claim benefits and knew about capital limits for benefits. For example, she claimed a benefit after receiving the capital and there is evidence that she was informed about the levels and why she couldn't receive it.

But, yikes, what a burn through rate of that sum of capital on frivolous things.

HappyMJ

techwatcher wrote: »

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?

Even if we were to say 18 months ago that's £10,000 a month. I couldn't spend that every month even if I tried.

Does she have records of what she spent it on? Did she spend so quickly so she could bank on benefits again ASAP? She may just be able to claim. Give it a go and see what happens. Hopefully if the claim fails she has some household items she's accumulated that she can now sell.

HappyMJ

Caz3121 wrote: »

If she was claiming DLA or PIP, this is not affected by capital so would still be in place
It sounds like the benefits she would have been able to claim may be ESA and maybe council tax benefit as no rent or mortgage

The decision maker will decide on how the inheritance would have been expected to last before dropping below £16k. With no rent or mortgage, maybe assume £200 per week for bills/food (complete guess)...which would be almost 15 years...even if the decision maker allows some of the spending, I cannot see benefits being payable for a few years yet

Hopefully there are items that she has purchased that she will be able to sell to pay the bills and food if she is unable to work

The DWP do not expect anyone with £180,000 in the bank to live on just £200 per week. You can spend a lot more than that. With careful investing she could have earned £200 a week from the £180,000 without too much difficulty so the money could have lasted forever.

Mojisola

techwatcher wrote: »

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.

BigAunty wrote: »

Deprivation of capital is such a complex area and we've never seen a similar example with an outcome on this forum before. Each decision is made on a case by case basis.

As an earlier posted indicated, the DWP/local council have to prove that she has intentionally behaved this way in order to claim benefits and knew about capital limits for benefits. For example, she claimed a benefit after receiving the capital and there is evidence that she was informed about the levels and why she couldn't receive it.

If she was claiming any means tested benefits before receiving the inheritance, she won't be able to claim ignorance about capital limits.