Mother's New Pension and Deprivation of Capital

OkieDoke7

My mother has been receiving PIP and ESA for some time due to poor mental and physical health, and on top of this, been receiving divorce payments from my father. As part of their divorce arrangements though, his payments have this month come to a stop, meaning she will lose £1000 a month. Beforehand she was fairly comfortable but frugal with money, she didn't have lots of savings, but also didn't worry about necessities really, but now her circumstances are changing, there is a lot for her to consider and she has been concerned about it.

She has taken her teacher's pension which provides her with a lump sum and a monthly amount. Between her PIP and pension, she will receive around £1200 per month which is quite a bit less than before with my father's contribution, and she will lose her ESA payments. She doesn't want to have to eat in to her lump sum too much.

I advised her to seek advise and her adviser suggested moving a portion of her lump sum to either a credit union or to me in order to keep her savings below £16000 and keep her ESA, but also said 'don't tell anyone I said this' to her as if it's best to keep it hush hush.

To me it sounds a bit fishy and I don't want to deprive other people or anything, but I am also keen that my mum is comfortable and doesn't have to rely on her lump sum (which isn't that much overall) to live and then it's gone without her being able to really enjoy it. After all, she worked hard as essentially a single parent to earn it.

That said, I have a few questions:

1) If mum was to move savings to stay under the threshhold, would this be considered Deprivation of Capital?
2) If so, is this illegal?
3) If so, what are the likely consequences for both her and me (in the scenario that I held some of her savings for her?

Basically, I want to know if it's something you probably shouldn't do, but can, or if it's a serious event with consequences.

Thanks for any advise you can give.

Alice_Holt

Q's -
1) Yes
2) Yes
3) Consequences range from Criminal Fraud to repayment of the monies received.

Ames

Whoever advised that needs reporting - it's fraud. Yes it would be considered deprivation of capital. At best she'd be treated as still having the money. At worst she'd be prosecuted for fraud.

Please don't even consider this course.

xylophone

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626778/dmgch52.pdf

From 52805 onwards


52805 [See memo DMG 12/15] The law says people are treated as having capital they do not have if they deprive themselves of their capital for the purpose of getting
1. ESA or IS or JSA or
2. more ESA or IS or JSA

TELLIT01

Was the £1000 per month your mother previously received from your father declared to ESA?

just_trying

TELLIT01 wrote: »

Was the £1000 per month your mother previously received from your father declared to ESA?

Probably a case of oke dokie.

TELLIT01

Entirely possible but the OP hasn't made that clear yet.

Alice_Holt

" to keep her savings below £16000 and keep her ESA,"

But, ESA could not be claimed when the claimant is receiving a £1,200 pm pension. That income would end both IB & CB ESA, regardless of capital levels.

And that's aside from the £1,000 received from the ex-partner. Whereas, child maintenance monies can be disregarded for IB ESA - I'm not sure this arrangement would (unless, perhaps, it took the form of directly paying mortgage / CT / household bills / car bills / etc and wasn't received as cash).

FBaby

What's her housing situation? £1,200 a month after housing is a good income to live on for one person, especially if she also got the lump sum to spend.

TELLIT01

Alice_Holt wrote: »

" to keep her savings below £16000 and keep her ESA,"

But, ESA could not be claimed when the claimant is receiving a £1,200 pm pension. That income would end both IB & CB ESA, regardless of capital levels.

And that's aside from the £1,000 received from the ex-partner. Whereas, child maintenance monies can be disregarded for IB ESA - I'm not sure this arrangement would (unless, perhaps, it took the form of directly paying mortgage / CT / household bills / car bills / etc and wasn't received as cash).

It's not £1200 per month pension, it's £1200 including PIP. If the mother is in receipt of higher rate for both PIP elements there would still be an entitlement to ESA, as the pension would be around £136 per week. It's all supposition until the OP says how much PIP is.
Also, as has been said, if the mother was on Conts ESA in the Support Group, any money from her ex wouldn't be taken into account.

OkieDoke7

Hi all, thanks for your replies.

A lot of this confirms what I was thinking.

To answer the questions that I can that have been raised.

I believe her rent is fairly average (I suppose that's somewhat subjective) at around £420 p/m It includes the cost of extra services as she is in sheltered accommodation

The money from my father was declared and it meant she didn't qualify for certain things such as housing support.

I can't remember the exact amount she gets for PIP but it's around £575 p/m.

The only reason I even had a question about this is she went to a advice service and got the advice listed above so it left me with questions. My initial reaction was similar to most of you. Thanks for yor help and for helping to clarify.