Spending and gifting my savings whilst on income-related ESA

missapril75

epitome wrote: »

"Using capital which is always less than £6000, could be construed as Deprivation of Capital

However, I have repeatedly referred to the income being used for spending. It is the income being spent on the OP and those the OP wants to help, not the capital.

I gave an example where I specifically referred to Capital of £5500 and an income of £600, with the money being spent coming from that £600 with the capital remaining untouched.

I know there would be arguments for and against these points,

Yes. I don't think the thread title helps matters, referring as it does to spending and gifting savings, but the first post says "As long as my total savings always remains below £6000" so the money 'disappearing' is only income. Income becomes capital only when accrued and it's not being accrued.

I can agree that using each fortnights payment for whatever they want is probably going to be OK. but if say they gave all of it to his brother, they would then dip into the savings to live on themselves, I would say the dipping into the savings would be seen as just giving that to the brother rather than the income to the brother IYSWIM.

Yes I see that, (I even worked out IYSWIM without looking it up :rotfl:) but I would still see it as not an issue providing the capital was under £6000 at the time because they would then be dipping into capital that wasn't of an amount to have reduced their benefit.

In my example, if they had £5500 capital and gave away the whole £600 income, leading them to take £600 from the capital, one might argue they had deprived themselves of capital (first, perhaps? ) and the net result could then be treating them as still having £5500 which makes no difference.

missapril75

baza52 wrote: »

...do what you want with the cash. You can spend it all down the bookies...

and on birds and booze...and squander the rest. :rotfl:

With appropriate acknowledgement to Georg Best.:rotfl:

baza52

missapril75 wrote: »

and on birds and booze...and squander the rest. :rotfl:

With appropriate acknowledgement to Georg Best.:rotfl:

its true that income can be spent in any way you want.
feel free to quote anything different.

ev8

epitome wrote: »

You are correct, it does not matter what the money is spent on, it matters only WHY the money was spent or gifted.

If the primary reason was to reduce savings so that the savings would not impact on your benefits then that is deprivation of capital, and you will be deemed to still have the money.

You can Mandatory Reconsider any deprivation of capital decision and appeal to tribunal if you like. You would have to show that you did not spend it for benefit purposes. A court would look at it based on the balance of probability, they would listen to your reasons for spending it and determine if they think you did it for benefit purposes or not.

But then how would you know if the money was being spent for pleasure or to keep the amount down? It would be impossible.

Take my example of buying winter coats, how could they prove you are doing that for want/need of them or to keep the money below 6k?

epitome

As far as I am aware a court would listen to your reasons, and the judge would then determine essentially if you are lying or if you reaaly did spend it because you wanted more coats.

This idea of spending extravagantly or spending reasonably, could have an impact on how much the judge is willing to believe you.

It cannot be proven one way or the other, but the judge has to make a determination.


One problem with this, is that if you ask DWP, Can I spend £xxx on y?
A) I doubt you will get an answer
The very fact that you have asked the question puts you in an awkward position, because the decision maker could infer from your asking, that you then went ahead with the purchase knowing that it will be beneficial to your benefits.

24418507

I sometimes play the lottery and have often wondered what would happen if I won an amount that took me over the allowed savings but not enough to live on until pension age. Or maybe inherited some money. Could I use it to pay of debt without being penalized? What is the official definition of savings. I would have thought that it was money that you had squirrelled away for a rainy day - but from these posts it looks as though the minute any windfall hits your bank account you have to tread carefully.

annandale

Are you seriously saying that the dwp should treat squirreled away funds and a windfall differently?

[Deleted User]

24418507 wrote: »

I sometimes play the lottery and have often wondered what would happen if I won an amount that took me over the allowed savings but not enough to live on until pension age. Or maybe inherited some money. Could I use it to pay of debt without being penalized? What is the official definition of savings. I would have thought that it was money that you had squirrelled away for a rainy day - but from these posts it looks as though the minute any windfall hits your bank account you have to tread carefully.

Money is money, it doesn’t matter where it came from or how long you’ve been sitting on it.

24418507

nope but some of the posters had less than 6k and then inherited some amount that took them over-limit. Whoever left them some money presumably wanted to help them - to say, pay down their mortgage or have a few luxuries they wouldn't otherwise be able to afford. It doesn't seem right that the spirit of the bequest is ignored.
I wonder if maybe the testator could specify that their executors pay the amount straight to the mortgage company so it never actually gets into the hands of the person on benefits?
My Mum has left money to her niece's children and one of them is disabled. Her intention is that her great-niece's get a little help. I will have to enquire about the situation and maybe suggest that the money is left instead to her mother who can buy for her the things that she needs.

TELLIT01

As shel has said, broadly speaking money is money when it comes to its effect on Income Related benefits. Yes, if the testator stated that the executors were to use money to pay down a mortgage it would not affect a recipients benefits because they were never in receipt of the money, the mortgage company was.
There is no leeway for 'the spirit of the bequest' to be taken into account.