On Benefits and Going to Inheritance Share of a House

Enquiryme

Hi everyone,

I'm hoping to find anyone with info / guidance. My grandmother recently died and has left an inheritance to her four sons including my father (even though they were estranged.)
My father is in his early 60s, lives on benefits and gets confused very easily and hasn't a clue on this will impact on him. He has a miriad of health problems.
He is receiving ESA, DLA, Housing benefit and Council Tax benefit. He has no savings.

He is likely to inherit some cash, between 10 - 20k and I already know that this will impact on his benefits and the 6k - 16k threshold. This will be declared the moment he gets the money however as soon as he starts to pay his own rent, council tax, etc, this will quickly go even without going mad and he'll quickly (within a couple of years even with best estimates) go under 6k savings and can get his benefits back.

However, he is also going to inherit 25% of the house belonging to his mother. The house is in a state of disrepair and worth around 100k. One of his brothers still lives in the house and the will states he gets to live there until he dies, rent free. Does this house have any impact on a benefits claim? It's 25% of a house that cannot be sold and will not bring him any financial benefit, possibly never as the brother living there is considerably younger than my father.

I cannot find out any information in this regard whatsoever. Thank you in advance.

calcotti

The value of the house is the current market value. If the house cannot be marketed because your uncle has a right to live in it and does not wish to move then it arguably has no market value but I don’t know if that is how the DWP will treat it.

It may depend on the exact terms of the will. If the will prohibits the sale of the property without your uncle’s consent then it cannot be sold and clearly has no value. If your brother simply has the right to live in it then it might be possible to sell the property with him as a sitting tenant in which case the property could be said to have some vale. However I suspect such a sale could, again, only be made with the consent of your uncle which means that if he withholds it the property again has no value. However we are now in the realm of property law which is way outside my knowledge.

Dad will of course keep his DLA and any contribution based part of his ESA.

He doesn’t have to go below £6,0000 to get other benefits back, needs to be below £16,000 but benefits will be reduced by capital over £6,000. Reading between the lines I think you probably know that already but thought it worth stating anyway.

xylophone

Has your father obtained a state pension forecast?

https://www.gov.uk/check-state-pension

pmlindyloo

Enquiryme wrote: »

Hi everyone,

I'm hoping to find anyone with info / guidance. My grandmother recently died and has left an inheritance to her four sons including my father (even though they were estranged.)
My father is in his early 60s, lives on benefits and gets confused very easily and hasn't a clue on this will impact on him. He has a miriad of health problems.
He is receiving ESA, DLA, Housing benefit and Council Tax benefit. He has no savings.

He is likely to inherit some cash, between 10 - 20k and I already know that this will impact on his benefits and the 6k - 16k threshold. This will be declared the moment he gets the money however as soon as he starts to pay his own rent, council tax, etc, this will quickly go even without going mad and he'll quickly (within a couple of years even with best estimates) go under 6k savings and can get his benefits back.

However, he is also going to inherit 25% of the house belonging to his mother. The house is in a state of disrepair and worth around 100k. One of his brothers still lives in the house and the will states he gets to live there until he dies, rent free. Does this house have any impact on a benefits claim? It's 25% of a house that cannot be sold and will not bring him any financial benefit, possibly never as the brother living there is considerably younger than my father.

I cannot find out any information in this regard whatsoever. Thank you in advance.

Is any part of your father's ESA award contribution based? Check his award letter. Contribution based ESA is not affected by savings or capital so he would retain this part.

His DLA would not be affected as it is not means tested either.

As you know any income based ESA, HB and CTR would be affected by savings over £6000. Any savings between £6K and £I6 would reduce his income based ESA by £1 for every £250 (or part of) over the £6K.

So as soon as he drops below £16K he should notify the DWP as regards his ESA. Depending on his award he may even be entitled to some income based ESA at just under £16K especially if he is receiving the Severe Disability Premium with his ESA. Any award of income based ESA would give him entitlement to HB.

CTR would depend on his local council so you need to look up what their savings limit is and their 'rules'.

As regards the 25% inheritance then he should notify the DWP about this. It may depend on the wording of the will so make sure there is a copy to hand as the DWP is likely to want to see it. If your dad cannot access the capital because of the wording in the will then it is probable that this is disregarded.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/689995/dmgch52.pdf

Scroll down to 52035.

Is the brother incapacitated in any way?

Enquiryme

Thank you all for your replies.
I dont know the exact wording on the will, neither does my father. The brother living in the house states he has no intention of moving out and the other two have stated they will not sell either, in fact they're using some of their inheritance to bring it upto full value as an investment for their kids.
The brother living in the house has health problems including using an oxygen tank but that's all I know, the family werent close and are never likely to be. That also means any consent to sell would be refused also.

My father did do a pension forecast a while ago and he gets a state pension from 67 years old (I think, this is from memory.) I cannot remember the amount.

The ESA is income based, he's been on benefits for decades so this will be means tested.

I understand the rules of the 6k to 16k for benefits and even with a 20k lump sum, once hes paying rent this will drop fast so I know about this and am prepared for it, with the plan of keeping full records, etc.

The house has been valued for tax purposes, but the dwp don't seem to be clear on how this is or isnt capital when he physically cant monetise his share.

calcotti

It may be sensible for your father to request a copy of the will from the executors in case he needs it.

Tabbytabitha

Enquiryme wrote: »

Thank you all for your replies.
I dont know the exact wording on the will, neither does my father. The brother living in the house states he has no intention of moving out and the other two have stated they will not sell either, in fact they're using some of their inheritance to bring it upto full value as an investment for their kids.
The brother living in the house has health problems including using an oxygen tank but that's all I know, the family werent close and are never likely to be. That also means any consent to sell would be refused also.

My father did do a pension forecast a while ago and he gets a state pension from 67 years old (I think, this is from memory.) I cannot remember the amount.

The ESA is income based, he's been on benefits for decades so this will be means tested.

I understand the rules of the 6k to 16k for benefits and even with a 20k lump sum, once hes paying rent this will drop fast so I know about this and am prepared for it, with the plan of keeping full records, etc.

The house has been valued for tax purposes, but the dwp don't seem to be clear on how this is or isnt capital when he physically cant monetise his share.

Perhaps it might be possible for them to buy your father's share from him now while the property is so low in value, particularly as they're seeing it as an investment. Otherwise, when they've done the improvements, he's going to have a quarter share in a much more valuable asset with a much greater effect on his means tested benefits.

pmlindyloo

ESA hasn't been around for decades so it is perfectly possible that he was transferred from Incapacity Benefit or another benefit. Worth a check.

pmlindyloo

Once probate has been granted then a copy of the will can be obtained.

https://theprobatedepartment.co.uk/copy-will-after-death-how-to-get-one/

What is contained in the will is going to be very important as the DWP will do an investigation to make sure that there is no way that your father can assess the money - this would include court action by your father.

calcotti

pmlindyloo wrote: »

ESA hasn't been around for decades so it is perfectly possible that he was transferred from Incapacity Benefit or another benefit. Worth a check.

Just to add - the significance of this is that if transferred from IB the ESA will include a contribution based element. Apologies to pmlindyloo, I know this is why you raised it but significance may not be clear to OP.

dippy3103

I think there are exemptions if the property is occupied by an elderly relative.