Payout from death policy.

glitter58

Brief outline regarding my nieces death policy payout.
While watching tv recently we saw a story on the news about a lady who was on benefits & had a windfall of money from a relative who passed away & went on a spending spree.
The lady was sent to jail because she wasn’t entitled to benefits after this windfall.
Now my niece has recently been widowed & has had her husbands insurance payout on his death policy.
She is currently on income based Esa in the support group.
She’s now worrying sick that she didn’t tell the benefits agency that she had this money because she didn’t know insurance money counted.
What is the situation regarding income based benefits etc.
Thanks in advance.

molerat

https://www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits
Unlikely to be considered as income but will be counted as savings - how much was it ? In any case she needs to contact them, prison is only likely in very serious cases for deliberately withholding information when asked over a long period.

calcotti

If she has more than £16,000 in savings she is no longer entitled to income based ESA. This will also affect any Housing Benefit and Council Tax Reduction. If less than £6,000 it is ignored. Between £6,000 and £16,000 it will reduce the amount of benefit payable.

glitter58

Thank you everybody for your help, I’m not sure of the exact amount but I do know it was more than £16000 as she paid off debts amounting to £30000.
I think she needs to ring them today.

glitter58

Oops apologies I’ve just text her & she’s actually on contributions based Esa sorry!!
I suppose the same applies so I’ve suggested she rings them anyway.

calcotti

glitter58 wrote: »

Oops apologies I’ve just text her & she’s actually on contributions based Esa sorry!!
I suppose the same applies so I’ve suggested she rings them anyway.

Contribution based ESA is not affected because it is not means tested. Does she get any other benefits?

glitter58

She gets pip but not sure which one.

glitter58

She has mobility at high rate & low rate care.
She’s only 10 years younger than me bless her & was only married 4 years, no children, her husband was killed on his motorbike last year.
She’s supposed to be getting her hip replacement in a weeks time but she will need a lot of looking after post op.
She has accepted my offer to stay here with me until she’s more mobile.

glitter58

🤣🤣sorry for the life story x

calcotti

glitter58 wrote: »

She gets pip but not sure which one.

PIP is not means tested either so the insurance makes no difference to that.


The only thing that would impact her ESA is if she started getting an occupational pension of more than £85/week. This would reduce her contribution based ESA entitlement - but not if it is an inherited pension.

TELLIT01

She should speak to ESA in case there is any Income Related top up to her basic Conts based payment. If there is, that top up will have resulted in an over payment and will need to be recovered from her.