Gift reducing benefits?

Connie

I know that a gift of money can reduce a person's means-tested benefits, because it counts as income.


I wonder how that affects my family's situation:


My 14-year-old grandson has been offered a place as a pupil at a fee-paying secondary school, and has been awarded a bursary which will cover most, but not all, of the cost. We are trying to find the rest of the money to enable him to accept the place.

His parents are divorced, but on good terms, and my daughter (his mother) is on means-tested benefits.

She can contribute a small amount towards the shortfall, but most of it would be paid by his father, an uncle, and me.


However, the school fees would have to be taken from my daughter's bank account by Direct Debit (a requirement of the school), so all that money would have to be paid into her account in the first place.


Does money specifically for school fees (for example) still count as a gift, when it is not for my daughter's personal benefit, and will be going straight out of her account again to the school?

OR -
If we paid our contributions into my grandson's account instead, and then he transferred it into his mother's account in time for the D/D payments, would that still count as a gift to her?

Our contributions would all be the maximum we can afford, so if my daughter's benefits were reduced or stopped, she would not be able to pay any of the fees, and the rest of us would not be able to increase our contributions. It would be a cruel blow to my grandson if he had already started at the school, but then had to leave again.

Any advice welcome.

pipkin71

Not quite the same circumstances but I can tell you about my experience with extra funds specifically for education.

During the time my children were home educated, at some point I was able to claim up to £4,000 per year when the children reached a certain age. For one of those years I could claim for both children which meant claiming up to £8,000.

As I claim means tested benefits and this amount put me over the £16,000 limit, all I had to do when I contacted the benefits section was demonstrate the amount paid out was not for me - I supplied the letters sent with the grants and a breakdown of what the money was for and they accepted this.

My advice would be for your daughter to be up front rather than try to hide it as they would likely accept that this is what the payments are for, especially when there is evidence of this anyway, such as a bill from the school.

xylophone

It is not unusual for a grandparent /other relative to pay school fees.

Would it be possible for you and the uncle to open a current account (preferably a high interest account) and for you, mother and uncle to make the necessary contributions to it?

The DD could then be set up on that account?

Connie

Many thanks to you both for your helpful replies.

We certainly don't want to do anything underhand!

sheramber

Can she open a separate account only for the school fees?

If it has to be only her name on the account could your daughter open a separate account for the school and you ( plural) only transfer the amount needed for the DD.

That would make it clear what the money was for.

She could also ask the benifit people to confirm, in writing, that the money would not affect her benefits.