Terminal Illness Future Benefits

blahboy

Hi all. First of all I would like to say a big hello and wow to the advice that I have seen been given to members here. Keep it up.


Here’s my story.


I have recently been given approx 6 months to live after recurrence this time, incurable. I would appreciate some advice regarding my wife claiming future benefits.


I am thinking of making a claim on my life insurance under terminal illness. We are awaiting decisions on a few benefits at the moment. If the claim for the terminal insurance was successful I have full intentions of notifying the relevant bodies and also understand that I will be over the 16000 threshold and will not be claiming any benefits .


I was looking to clear all my credit cards off, pay for both of our funeral plans, double grave and headstone, and maybe a second hand car for my wife. This would leave her with a little bit to live off before she needed to claim any benefits.


Would she have any problems claiming future benefits if I spent this insurance money before I pass or would she better off waiting to clear debts from my estate?


Any help appreciated
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TELLIT01

If you are not claiming benefits, you are free to spend the money in any way you wish. To ensure there could not be any question of deprivation of capital, put the money into an account in your name only until the major spending is done. Then transfer to a joint account to ensure your wife will have access to funds when the time comes.
There should not be any problem even if the money is in a joint account from Day1 but the above would eliminate any risk.

blahboy

Thank you for the reply.


When would be the best time to inform the benefit bodies, before the insurance claim or after? Also would it be best to let the current benefit claim go ahead in-case of insurance claim refusal of any sort?
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huckster

MacMillan charity can offer very good advice in these circumstances.

Without knowing all of your financial and personal information, it is very difficult for anyone on an internet forum to advise you properly.

What you don't want to do, is act of bits of advice, when information not known, has not been considered.

Are you still employed ?

If not employed, when you last worked, did you have any pension or employment benefits, that might help you.

Would your wife be entitled to receive any pensions you have, after your passing ?

Do you own a house ? Any mortgage left ?

Or do you rent ? If so is this through council/housing association or Private rent ?

Are the debts in your sole name or joint with your wife ? Are any of the debts secured against property you own ?

Does your wife work ? Is she disabled ?

Do either yourself or wife claim any benefits, tax credits ?

There would be a long list of questions, which is why I would suggest you obtain professional help from people who deal with such issues everyday,

blahboy

Thanks for the reply Huckster,


I was self employed a few weeks back but packed up because of the illness. When I was working I was claiming tax credits but notified them to stop the claim when I packed up working. I have no pensions. My wife is not of pension age yet.


We are renting council housing.


Debts are all unsecured and all in my name.


My wife does not work nor is she disabled.


We are at the moment claiming housing and council tax benefits. Also PIP and awaiting Universal Credit claim.
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badmemory

Make sure ALL your debts are in your name & all the money/future income is in her's. She can not be held responsible for your debts. So no joint accounts, credit cards, any (insurance) payments due should have her nominated as the recipient, not your estate. If there is no money in your estate then your cremation could be paid for by either the NHS or LA.


Have you both had state pension forecasts? It MAY be possible that she will inherit some of your state pension when she reaches SPA.

huckster

Under Universal Credit, if your Doctors have issued a DS1500, because of your terminal condition, then they will add Limited Capability for Work and Work Related Activity (LCWRA)to your claim without any assessment being required. If no DS1500, then you would need a health questionnaire completed and there would be assessment ( probably paper based and not face to face). The assessment would be fast tracked and if LCWRA awarded, you would get this as soon as possible.

So your UC claim would be

Couple rate approx £498
LCWRA rate approx £328
Housing rent £your rent amount.

As you are on PIP, if you advise what you use any spare room for, then there would be no deduction for one extra room.

If your wife cares for you for 35 hour + per week, she could look at claiming for Carers Element under UC. Also I wonder whether she could also claim Carers Allowance, which is a separate benefit ?

PIP is a separate benefit and does not affect UC award.

On your passing, your wife would then continue with the UC claim and if there is a capital between £6k and £15999, then there would be a deduction based on interest that could be earned on the money. The rate used is approx 1.9%.

If you have capital available under your joint UC claim, if it is a life Insurance/terminal illness payout, then provide all information at the Job Centre and they will refer to a Decision Maker. In some situations, capital can be disregarded. If you are going to be spending it on things you want it to be used for, it might then not be a concern of UC.

blahboy

Thank you for your reply's,
Have now informed DWP that I will be claiming on my Insurance and that if successful I will be stopping the current claim when money gets paid.


Thanks again

TELLIT01

Do you have entitlement to the new style ESA? If so you should certainly be claiming it as savings / capital is ignored on Contribution based benefit.

blahboy

Thanks for the info TELLIT01,


Will keep that in mind for the future

calcotti

huckster wrote: »

If your wife cares for you for 35 hour + per week, she could look at claiming for Carers Element under UC. Also I wonder whether she could also claim Carers Allowance, which is a separate benefit ?

If OP and wife are receiving UC there is no financial benefit if wife claims Carer’s Allowance because it is deducted in full from any UC award. However if UC claim may end due to capital over £16,000 then wife should claim Carer’s Allowance because it is not means tested, only restriction is that she must not earn more than £120/week from employment, which she does not, and provides 35 hours of care.