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ESA: Spending inheritance on disability related needs?

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  • Mojisola
    Mojisola Posts: 35,571 Forumite
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    I'm just concerned about rocking the boat early, and that they will say "no way" before he even knows for sure how much he's going to get.

    He doesn't need to tell anyone at this stage.

    He can wait until the money is in his account before informing the DWP of his change of circumstances - depending on how much the inheritance is, most means tested benefits will be affected/stopped.

    Once his capital drops back down to £16k, he can then reapply.
  • calcotti
    calcotti Posts: 15,696 Forumite
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    edited 28 July 2018 at 11:12AM
    In your original post you said "... gets ESA. According to the DWP, he's partly contribution based and partly income based, but they classify it as income based for some unexplained reason."

    Whenever an award includes an income based part the DWP will describe the award as income based which means that your father gets 'passported' benefits such as free prescriptions (of course, if he's over 60 he gets these anyway) and free dental care. If his capital goes over £16,000 he will lose only the income based part. You should check his award letters carefully or confirm with the DWP that he has the contribution based part. Unless he gets the Severe Disability Premium he will only be losing the Enhanced disability premium of £16.40/week. He will also lose the passported benefits. If he does get the Severe Disability Premium he will lose this also. He will continue to get the contribution based award which is £110.75/week.

    Regardless of what your father wants to spend the money on he is going to have to receive it first and it may take some time to organise building work, adaptions etc. If he has the money sitting in his account, or available to him, he is supposed to report it. When he has spent some money so that his capital drops again he can report this and ask to be reassessed for an income based award. At that time he can evidence what the money has been spent on and why.

    Any capital above £6,000 will reduce the income based ESA award (by £1 for every £250 or part). If he has capital of more than £10,000 this will cancel out the Enhanced Disability Premium.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • pmlindyloo
    pmlindyloo Posts: 13,091 Forumite
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    edited 28 July 2018 at 9:13AM
    calcotti wrote: »
    In your original post you said "... gets ESA. According to the DWP, he's partly contribution based and partly income based, but they classify it as income based for some unexplained reason."

    Whenever an award includes an income based part the DWP will describe the award as income based which means that your father gets 'passported' benefits such as free prescriptions (of course, if he's over 60 he gets these anyway) and free dental care. If his capital goes over £16,000 he will lose only the income based part. You should check his award letters carefully or confirm with the DWP that he has the contribution based part. Unless he gets the Severe Disability Premium he will only be losing the Enhanced disability premium of £16.40/week. He will also lose the passported benefits. If he does get the Severe Disability Premium he will lose this also. He will continue to get the contribution based award which is £110.75/week.

    Regardless of what your father wants to spend the money on he is going to have to receive it first and it may take some time to organise building work, adaptions etc. If he has the money sitting in his account, or available to him, he is supposed to report it. When he has spent some money so that his capital drops again he can report this and ask to be reassessed for an income based award.

    Any capital above £6,000 will reduce the income based ESA award (by £1 for every £250 or part). If he has capital of more than £10,000 this will cancel out the Enhanced Disability Premium.

    I had forgotten that the OP's dad was on contribution based ESA with an income based 'top up' - will correct my post to reflect this. I put it down to the heat!!

    Good post!
  • calcotti
    calcotti Posts: 15,696 Forumite
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    edited 28 July 2018 at 11:10AM

    4) Would using any (remaining) inheritance to pay off some small unsecured debts and/or the rest of his mortgage be classified as "deprivation of capital" and thus stop his ESA payments too?.

    Be cautious on this point. If the debts are repayable on demand then paying them off now money if available could be reasonable. If however they are loans with agreed scheduled repayment over a fixed term then paying them off early is likely to be be seen as unnecessary and therefore as deprivation of capital. Paying off the mortgage early will almost certainly be treated as deprivation of capital (see below).

    Advice to Decision Maker's contains this:

    "52825 Onus of proof
    DMs have to show the claimant'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 predominant purpose but it must be a significant one. So when claimants give a way 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. !!!8232;

    What the DM decides
    52826 DMs have to decide if the claimant's or partner's significant purpose was to get benefit or more benefit. The DM has to make such a decision each time claimants deprive themselves of capital. So if claimants have spent their capital on several things the DM has to decide the claimant's purpose for each act of deprivation.

    Did claimants have a choice when they deprived themselves of capital
    52832 The DM has to decide why claimants chose to deprive themselves of capital when they did if they had a choice in the matter. The fact that claimants had a choice does not mean their purpose was to get benefit or more benefit. It is a fact which the DM should take into account when deciding the claimant's or partner's purpose.

    52833 Claimants have no choice if they use their capital to pay
    1. for the necessities of life, such as food and fuel or
    2. debts which are
    . 2.1 !immediately repayable and
    . 2.2 !legal debts capable of enforcement or
    3. the Department to repay an overpayment.
    Claimants who had no choice have not deprived themselves of capital to get benefit or more benefit.

    52834 Claimants have a choice if they
    1. give their capital away
    2. spend their capital extravagantly or imprudently even if they say they have used it to pay for the necessities of life
    3. 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
    4. 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 D M decides it was reasonable fort he claimant to act in the way that they did. !!!8232;
    5. pay back a debt which is not a legal debt capable of enforcement !!!8232;
    6. make payments to a flexible current account mortgage which reduce the outstanding balance on the mortgage."

    If you want to read all the guidance it is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/689995/dmgch52.pdf. Deprivation of capital is covered from paragraph 52805 onwards (through to 52847).
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • pmlindyloo wrote: »
    People are telling you of their experiences but only a Decision Maker will make the decision. There is no central system for this. It varies from area to area. I cannot see why you would be afraid of 'stirring the pot' if you wrote to them. (How old is he, by the way?) .... As regards the Disabled Facilities Grant you need to ask your local council if he would be entitled again (you might also mention the current wet room situation) .....Good luck with it all and I hope you won't think I am being less than sympathetic to your dad's situation.

    I appreciate that, but it doesn't hurt to hear that people have been successful in using their inheritance as a lot of what I'd read prior seemed very doom and gloom without any follow up on how things turned out for the claimant.

    Well, past experience has made me very wary of the DWP with ESA in particular. A few years ago my dad had a massive drama with them (through legitimately no fault of his own it was misunderstanding and failure to file things correctly their end) which left him without money for almost three months and caused him to have a breakdown as a result. He has yet to recover financially from it too. So I'm feeling very apprehensive about having to deal with them over this and I don't want there to be any more misunderstandings before the cash is actually secured. At this point in time, I feel like it could finish him off to have his income cut prematurely because someone didn't tick the right box again.

    His well into his sixties, I know community housing would be an option for him, but his father died as a result of negligence from care workers at a housing community place, he is absolutely adamant he's not going into any kind of care home.

    With regards to the wet room - last night while my brother (his carer) was helping him shower, something gave up the ghost, flooded everywhere, sending the ceiling into partial collapsed and flooding about 30% of the downstairs, damaging his household electrics and furniture in the process. So I've got no idea how we navigate between the council funding repairs to the wetroom and repairing damages accordingly or handling household insurance for the damages to his kitchen, but that's another (undoubtedly long) battle. 2018 has not been a good year.

    I understand where you're coming from, and I know no amount of other people's stories will guarantee my father's outcome but like I said, it helps to hear that people have been successful because most posts I've read online ask questions early and maintain updates during the drama but rarely follow up with any outcomes, positive or negative. So I've been none the wiser to how it may pan out until people here have given me some hope that he might actually be able to legitimately use his dad's money to do some good in his life.
    Mojisola wrote: »
    He doesn't need to tell anyone at this stage. He can wait until the money is in his account before informing the DWP of his change of circumstances......... Once his capital drops back down to £16k, he can then reapply.
    Do you know if there is any kind of rule/regulation or penalization for how quickly a person goes between having over 16k and going under 6k? I know there are likely to be some people out there who would just wildly spend to get rid of it so they could get back on ESA, so I'm sure they must take it into consideration and check in some way?

    My concern is, if they frown upon spending the money quickly there will be all kinds of swings and roundabouts involved with reapplying. Would my dad need to prove spending at the point of reapplication, or is it something they'd flag up during the process? Or would it make no difference at all?
    calcotti wrote: »
    You should check his award letters carefully or confirm with the DWP that he has the contribution based part. Unless he gets the Severe Disability Premium he will only be losing the Enhanced disability premium of £16.40/week. He will also lose the passported benefits. If he does get the Severe Disability Premium he will lose this also. He will continue to get the contribution based award which is £110.75/week........Regardless of what your father wants to spend the money on he is going to have to receive it first and it may take some time to organise building work, adaptions etc. If he has the money sitting in his account, or available to him, he is supposed to report it. When he has spent some money so that his capital drops again he can report this and ask to be reassessed for an income based award.....If he has capital of more than £10,000 this will cancel out the Enhanced Disability Premium.
    Thank you so much for the advice. I need to call up and try to get him some current benefits information, because the only things I can find don't seem to mention the contribution parts, but I have been told that is part of his benefit over the phone a couple of times.

    He does get the Severe Disability Premium, will he be able to hang onto that regardless, or does inheritance affect that differently?

    We don't know a thing about how probate works in regard distributing the estate, like if they give you an update to say probate is complete, expect the cheque in the post or something haha! I know it can take up to a year, but my Grandfather's estate/will is pretty much cut and dry. I get the feeling it could all happen rather quickly once in progress, so I was intending to get three quotes lined up while probate is happening. So, I'm hoping the quotes will at least be valid for a few months. Would it be frowned upon to receive the cheque but not cash it until the works are ready to proceed? I feel like that might be a bit shady....

    Do you know, if on reapplying, there'd be any kind of stumbling blocks for having spent the money quickly? Would the DWP want explanations for where the money went to bring him back under the threshold, or would it not really matter to accepting his application as long as there wasn't 6-16K in his bank account there and then?
    calcotti wrote: »
    Be cautious on this point. If the debts are repayable on demand then paying them off now money if available could be reasonable. If however they are loans with agreed scheduled repayment over a fixed term then paying them off early is likely to be be seen as unnecessary and therefore as deprivation of capital. Paying off the mortgage early will almost certainly be treated as deprivation of capital (see below).
    Thank you for the information, I will give it a look over.
  • pmlindyloo
    pmlindyloo Posts: 13,091 Forumite
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    How old is your dad - exactly - date of birth please?
  • calcotti
    calcotti Posts: 15,696 Forumite
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    edited 28 July 2018 at 1:31PM
    . .there will be all kinds of swings and roundabouts involved with reapplying. Would my dad need to prove spending at the point of reapplication, or is it something they'd flag up during the process? Or would it make no difference at all

    To be clear - if he has a contribution based element his ESA is never going to stop (he will get a minimum of £110.75/week as a contribution based award in the Support Group) but it does have to be reassessed to make sure he is not overpaid.
    . .the only things I can find don't seem to mention the contribution parts, but I have been told that is part of his benefit over the phone a couple of times.

    ESA award letters are notoriously difficult to understand and quite often they don't make sense. If you are willing to post the breakdown of the award (without any identifiable information of course) someone may be able to interpret it for you. Otherwise next time you speak to ESA ask them to send a confirmation of award letter to your father and ask them explicitly to make clear whether part of the award is contribution based.
    He does get the Severe Disability Premium, will he be able to hang onto that regardless, or does inheritance affect that differently?
    The SDP is part of the income based award. If he goes over £16,000 of capital he will lose the SDP until he drops below the threshold again.
    Would it be frowned upon to receive the cheque but not cash it until the works are ready to proceed? I feel like that might be a bit shady....
    Once he's got the cheque he has access to the money and it counts so delaying cashing it makes no difference.
    Do you know, if on reapplying, there'd be any kind of stumbling blocks for having spent the money quickly? Would the DWP want explanations for where the money went to bring him back under the threshold,
    He will have to explain how the money was spent with evidence to show this. The speed with which it is spent is not the issue, what it is spent on is.

    If you are willing to respond to pmlindyloo question about your father's date of birth that would help. If your father is close to getting his State Pension the issues around ESA become less important because his ESA will end when he gets to pension age anyway. Depending on his age now there is a slim chance he could claim Pension Credit instead of ESA (I say slim because this depends on the difference in state pension age for men and women and the equalisation process is almost complete).
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Mojisola
    Mojisola Posts: 35,571 Forumite
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    calcotti wrote: »
    If you are willing to respond to pmlindyloo question about your father's date of birth that would help. If your father is close to getting his State Pension the issues around ESA become less important because his ESA will end when he gets to pension age anyway.

    tannedtoast - you can check when your father will reach pension age here - https://www.gov.uk/state-pension-age
  • xylophone
    xylophone Posts: 45,604 Forumite
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    Your father will need to advise DWP as soon as the money becomes available to him, see above.

    I don't think he should panic because even if all benefits were immediately suspended, he would have around eighteen thousand pounds available to meet his expenses until such time as recalculations were done?


    With regard to the extensive accidental damage to his bathroom and the rooms underneath it, his household insurance should cover it?

    It is distressing to have all the mess but he might take the optimistic view that this was a happy accident since it appears that prior to the incident, work was required?

    I remember many years ago I arrived home from the office to find water seeping through the kitchen ceiling from the flat above - it turned out that there was a leak from the roof.

    It was necessary to redecorate the kitchen completely which I didn't mind at all as I hadn't been that keen on the previous colour and as the insurer (same for common parts as for the individual flats) met the bill, it was professionally done -" it's an ill wind" etc...
  • Mappamundi
    Mappamundi Posts: 1 Newbie
    edited 30 May 2019 at 11:05PM
    Hi
    I’m about to come into some inheritance. I have a little boy who is on Dla and I’m on Pip.
    My inheritance Is from a Trust so a property is being divided by three and is being sold. My brother is buying us out, well buying two of us out.
    I’m on benefits and have been for ten years. I’m in the ESA support group and I have a
    Full NI profile. So my award is divided between income and contribution based. I get housing benefit and the council tax paid. I get carers as my son is on Dla and CTC. I get the SDP thing as well.
    I feel a bit scared to be honest with you.
    So as I understand it I was told today that I could buy what I wanted and once I was under the 16k threshold my income based benefits would start again. I asked if I had to reapply they said no...but I guess you would need to keep them informed of where one was on the scale once you entered below the 16k mark.
    I have PIP as I said and wanted to buy a camper van. The reason being is that I can only drive so long and need a nap. It’s happening more and more. I have osteoarthritis and lower back issues. Ankles, knees and back are terrible so I was going to get this van because it’s higher and easier to get into than a car. I was also looking at getting an automatic vehicle for obvious reasons.
    My question is would they accept a new one being purchased or does it have to be a second hand one?
    I was going to put some money into a trust fund for my son as he has some disabilities. He is my only child and I’m 52.
    I was going to put money away into a scheme for my funeral....
    Are these valid areas to spend money in this situation I have outlined?

    I have some debts all of them I can pay off when I want...a car which I can pay off earlier two club type books...all three I pay off monthly. I can make extra payments if I want same as the car.

    Any advice would be welcome. I just do not want to get this wrong....
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