Carer on benefit

Troublewithmoney69

Hi
I’m a carer for my mum and dad and am on income support and careers allowance. I don’t claim any other benefits such as housing benefit and have no savings. I’m in debt approx 6k as I had to give my job up 6 years ago to look after them. Today I have been given a cheque of 10k from an uncle, it’s a gift as he’s hated seeing me go without and struggle financially so much in the last 6 years. I intend paying off my debts straight away and notifying the benefits people. But before I cash the cheque I am just wondering if my benefits will be stopped? It would literally be in my account and debts paid off on the same day. (If it means my benefits are stopped I’d rather give the money back to him.)
I can see on the government website it’s between 6k and 16k savings before things get messed about with?
I think I’ll make an appointment and go up and see them before I cash it. I will be 100% up front with them but just wondering if anyone knows off the top of their head if this will affect my benefits because of having the money one day in my cheque account?

Thanks in advance...

Dullville

Troublewithmoney69 wrote: »

Hi
I’m a carer for my mum and dad and am on income support and careers allowance. I don’t claim any other benefits such as housing benefit and have no savings. I’m in debt approx 6k as I had to give my job up 6 years ago to look after them. Today I have been given a cheque of 10k from an uncle, it’s a gift as he’s hated seeing me go without and struggle financially so much in the last 6 years. I intend paying off my debts straight away and notifying the benefits people. But before I cash the cheque I am just wondering if my benefits will be stopped? It would literally be in my account and debts paid off on the same day. (If it means my benefits are stopped I’d rather give the money back to him.)
I can see on the government website it’s between 6k and 16k savings before things get messed about with?
I think I’ll make an appointment and go up and see them before I cash it. I will be 100% up front with them but just wondering if anyone knows off the top of their head if this will affect my benefits because of having the money one day in my cheque account?

Thanks in advance...

Why don’t you just get your Uncle to pay your debts off directly through his account?
Would of thought that the easiest solution.

poppy12345

Troublewithmoney69 wrote: »

Hi
I’m a carer for my mum and dad and am on income support and careers allowance. I don’t claim any other benefits such as housing benefit and have no savings. I’m in debt approx 6k as I had to give my job up 6 years ago to look after them. Today I have been given a cheque of 10k from an uncle, it’s a gift as he’s hated seeing me go without and struggle financially so much in the last 6 years. I intend paying off my debts straight away and notifying the benefits people. But before I cash the cheque I am just wondering if my benefits will be stopped? It would literally be in my account and debts paid off on the same day. (If it means my benefits are stopped I’d rather give the money back to him.)
I can see on the government website it’s between 6k and 16k savings before things get messed about with?
I think I’ll make an appointment and go up and see them before I cash it. I will be 100% up front with them but just wondering if anyone knows off the top of their head if this will affect my benefits because of having the money one day in my cheque account?

Thanks in advance...

This will affect your Income Support £1 for every £250 over £6000. Paying off your debts could be classed as deprivation of capital.

xylophone

Paying off your debts could be classed as deprivation of capital.

But if the Uncle paid off the debts and just gave the OP £4000?

[Deleted User]

OP you are only allowed to pay off certain debts, the info when I search google is a few years old so may not be relevant, but basically if the debts are not overdue i.e. you are not behind with payments then paying them off may be DPC. You may want to get help from CAB on this.

Troublewithmoney69

I barely make the payments for the interest on the debt, let alone the full amount every month. The debt has been going on for years. Was even thinking of going bankrupt. I might just sign off, pay my debts off and start again. That’s what this will leave me with, no debts and a bit of spare cash. Thanks for all your replies though. I will pop along to local CAB.

kingfisherblue

What a lovely gesture from your uncle - it wilol make a big difference to your peace of mind if you have no debts. Instead of signing off benefits and then signing back on (because you may still be considered to have the money even if you pay off your debts - and they can check!), so you would be better off asking your uncle if he can pay the money directly to those to whom you owe money. That way, you won't have the cash go into your account, and so won't be investigated for Deprivation of Capital. I'm sure that your uncle would want the best option for you.

Ames

What type of debt is it? Loans can be considered deprivation of capital because there are scheduled repayments that you agreed to. Overdrafts can be called in at any time so paying those off would be fine. I'm not sure about credit cards.

There have been some changes about how paying off debt is viewed, but I think it might just be for UC.

As others have said, if your uncle paid off the debts directly there wouldn't be a problem.

As an aside, if you've run up debts because of struggling with a low income due to benefits are you sure you won't just find yourself in the same position later? It often happens (speaking from experience here), so maybe posting on the debt free wannabe board would help, and getting a benefit check to make sure you're getting everything you're entitled to might help.

Alice_Holt

I have posted info on deprivation of capital and debts on another thread (hopefully it may be use to the OP here):

"The DWP class deprivation of capital as the act of depriving youself of capital in order to be eligible for an award, or a higher award of benefits. It is a grey area, with the final decision down to the DWP decision maker (but this decision can be challenged at tribunal).

The DWP Decision makers guide (google DMG vol5 chapter29) says the following on debt repayments:

"Decision makers should decide if a debt paid by claimants or partners is a legal debt capable of enforcement. Some of the things which the decision maker will need to take into account when making the decision is
1. the size and importance of the debt
2. the circumstances under which the loan was made
3. any written or other contemporaneous evidence
4. the relationship of the parties involved."

and

"Claimants have a choice if they pay back a debt before the agreed date, such as when they pay off their mortgage and the agreement says it is not due to be paid back for another 15 years;
- pay more than the amount due on a debt, such as when they pay more than the minimum payment on a credit card debt unless the payment has been made to remove the threat of high interest payments and the decision maker decides it was reasonable for the claimant to act in the way that they did;
- pay back a debt which is not a legal debt capable of enforcement;
- make payments to a flexible current account mortgage which reduce the outstanding balance on the mortgage."

However the DM's decision is subject to the overriding principle that:
"Decision makers have to show the claimant’s or partner’s purpose was to get benefit or more benefit if they decide claimants or partners have deprived themselves of capital.
Getting benefit or more benefit may not be the claimant’s or partner’s predominant purpose but it must be a significant one. So when claimants give away all their capital to a relative just before claiming benefit their
1. main, or predominant, purpose may be to benefit the relative and
2. intention, or significant purpose, may be to reduce their capital so they can get benefit or more benefit."

Other spending is allowed as long as it is not classed as "spending the capital extravagantly or imprudently", so for instance replacing an ageing car with a more reliable version should be fine but the purchase of a new luxury vehicle would be likely to be viewed as deprivation of capital."

https://forums.moneysavingexpert.com/discussion/5759095

I second the suggestion of getting a benefit check.

Good luck.

Troublewithmoney69

No it’s just credit card debts I just paid off minimum. I was for Things my parents have needed eg wheelchair, things I’ve had to pay for and didn’t have money for eg car insurance/repairs, house repairs. I was on a career break and hoping to go back to work, but it hasn’t worked out like that and after 5 years I lost my job completely. The debts were just from day to day living, nothing extravagant, I haven’t been on holiday for over 10 years and my car is 14 years old. I lived off my savings for a couple of years before signing on at all.

Troublewithmoney69

there is no mortgage or rent. The house is paid off.