Benefit entitlement when receiveing 20k frim house sale.

Mrspigott

Hi - i'm desperate for an answer to my query; i will very soon be receiving 20k in my bank account, due to me and my siblings, grievously, having to sell my Mum's house due to her traumatic self inflicted death. I'm on benefits, currently, and finding it hard to get a job, and i don't want to needlessly waste this unfortunate/fortunate inheritance - What are the rules and limits on savings when your already claiming JSA and Housing benefit, as oppose to processing a claim with initial savings - please don't see my as a scrounger, because if you knew the situation, you'd understand, otherwise!!! Thank you, anyone......

pmlindyloo

If you are on income based JSA then the maximum limit on savings s £16000.

Anything over £6000 to £16000 is deducted from your JSA at a rate of £1 for every £250 over the £6000.

Savings over £16000 would mean that you would not be entitled to any means tested benefits until your savings reached below £16000.

So when the money hits your bank you will lose income related JSA, HB and CTR.

TELLIT01

pmlindyloo is absolutely correct. There is no flexibility in application of the rules about entitlement. Until the savings drop back below £16000 you will have no entitlement to income related benefits. Also, do not even think about giving some of the money away as that would be classed as deprivation of capital, and for benefit purposes you would be deemed still to have it.

dippy3103

You can use it to support you whilst you take stock and work out where you are going in life. That's not s waste. The rules are the same for everyone

Mersey_2

TELLIT01 wrote: »

pmlindyloo is absolutely correct. There is no flexibility in application of the rules about entitlement. Until the savings drop back below £16000 you will have no entitlement to income related benefits.

It depends what you mean by that statement.


Whilst it's true that a new claimant would not be entitled to means-tested benefits if they had capital in excess of £16k, it does not mean that a temporary influx of funds negates a current live claim.


If you are planning to buy another property your capital could be disregarded, but this is not forever.



Plus also remember the Tribunal ruling means that it's effectively net assets of £16k which is the upper limit, eg if a claimant had £18k in the bank and an overdraft of £3k, they would be deemed to have capital of £15k for benefit purposes, as the overdraft is repayable on demand.


In the same way if a claimant won £20k on the Lottery or horses, that would not of itself negate any live claim.

TELLIT01

Mersey wrote: »

If you are planning to buy another property your capital could be disregarded, but this is not forever.

To the best of my knowledge that only applies if the claimant has sold one property and is planning to purchase another. The proceeds from the house sale can be disregarded, initially for 6 months. In this instance the claimant is in receipt of a legacy, they have not sold their own property.
I'm fairly sure that the disregard would not apply in this instance.
From my reading of the OP, the claimant lives in rented accommodation (in receipt of HB), and is unlikely to be in a position to purchase their own property even if a potential disregard period did exist.

Cheeky_Monkey

Mrspigott wrote: »

Hi - i'm desperate for an answer to my query; i will very soon be receiving 20k in my bank account, due to me and my siblings, grievously, having to sell my Mum's house due to her traumatic self inflicted death. I'm on benefits, currently, and finding it hard to get a job, and i don't want to needlessly waste this unfortunate/fortunate inheritance - What are the rules and limits on savings when your already claiming JSA and Housing benefit, as oppose to processing a claim with initial savings - please don't see my as a scrounger, because if you knew the situation, you'd understand, otherwise!!! Thank you, anyone......

The underlying tone of your post suggests, to me at least, that you are indeed wanting to keep the £20k and all your benefits.

Apologies if that's not the case but that's how it comes across to me.

Carrieanne

The OP must be aware that it is critical to declare the £20K the instant it lands in their bank account and close any claims for means-tested benefits. For as long as they have above £16K they will have no recourse to means-tested benefits, and having between £6K and £16K payments will be reduced by £4 per thousand for every thousand above £6K. Unless their position changes for the better it's conceivable that within two or three years until the savings is reduced to below £6K that in effect the inheritance windfall will replace £14K's worth of means-tested benefit payments.

The OP should also be aware that if/when they make a new means-tested claim attention will be paid to their spending to determine whether it was reasonable. They might wish to acquire and retain receipts for goods and services they make from cash withdrawn from their account.

kingfisherblue

Mrspigott wrote: »

Hi - i'm desperate for an answer to my query; i will very soon be receiving 20k in my bank account, due to me and my siblings, grievously, having to sell my Mum's house due to her traumatic self inflicted death. I'm on benefits, currently, and finding it hard to get a job, and i don't want to needlessly waste this unfortunate/fortunate inheritance - What are the rules and limits on savings when your already claiming JSA and Housing benefit, as oppose to processing a claim with initial savings - please don't see my as a scrounger, because if you knew the situation, you'd understand, otherwise!!! Thank you, anyone......

You won't be wasting it, you'll be using it for living costs. I'm not sure why you think that you should continue to receive means tested benefits when you have £20,000 in the bank.

Whatever your situation, the rules are the same. It's not whether anybody sees you as a scrounger or not, it's simply a case of following the rules - and to do this, you will have to declare the money and give up your means tested benefits for a period of time.

Mersey_2

TELLIT01 wrote: »

To the best of my knowledge that only applies if the claimant has sold one property and is planning to purchase another. The proceeds from the house sale can be disregarded, initially for 6 months. In this instance the claimant is in receipt of a legacy, they have not sold their own property.
I'm fairly sure that the disregard would not apply in this instance.
From my reading of the OP, the claimant lives in rented accommodation (in receipt of HB), and is unlikely to be in a position to purchase their own property even if a potential disregard period did exist.

That may well be the case - I (also) took the OP to mean they are due to inherit c £20k which was a portion of the estate.


I was merely explaining to readers why your claim ("there is no flexibility in the application of the rules about entitlement") was false.


Indeed inheriting - or winning - a lump sum of £ is one of the very exceptions Tribunals have upheld (although it's usually if eg £50k is received and then shared with relatives or an overdraft cleared).


I take your point (there were only 2,000 properties you could purchase for £20k last year - although the beneficiaries could between them and the disregard also applies to deposits for a property).




Whilst it's always advisable to notify the DWP and/or council of any large windfall, the sum of £20k will probably only take half of claimants over the effective £16k of net assets which is the upper threshold (as clearly only £4k of debts repayable on demand would be needed, or eg £3k and £1k of essential spending). But I agree with your presupposition for windfalls greater than £20k.

Owain_Moneysaver

Carrieanne wrote: »

The OP should also be aware that if/when they make a new means-tested claim attention will be paid to their spending to determine whether it was reasonable. They might wish to acquire and retain receipts for goods and services they make from cash withdrawn from their account.

And even some major expenditure on goods and services may be regarded as not deprivation of capital.

Using the money to learn to drive and buy a small car may be reasonable, especially if it improves employment prospects.