Benefit Fraud and my sister, im worried please help! 29 May 2020 at 8:25AM in Benefits & tax credits 13 replies 1K views

SambukA991

Hi, can someone please help as im worried about me and my sister being accused for benefit fraud.
She is single, does not work and has received full benefits for over a year now. September last year she got her full pension paid to her, 27.5k. The same day she received this she 'loaned' 21.5k to her friend, leaving her with 6k savings which is within the allowance.

Her friend is now leaving the country, therefore will be sending the money back to her in the next 2 weeks. Shes asked me to receive this money as a loan.

My question is, should she of been claiming full benefits when she had loaned all this money to her friend, should she have told the benefits office the full amount she received of her pension and not just 6k in savings?

Also if I receive this money as money as a loan, is this involving me in any sort of fraud? 

I dont want anyone to be in trouble, but also at the same time I need to do the right thing if she has committed fraud.

Please help

poppy12345

Without knowing exactly what benefits she's claiming then it's impossible to give any advice.

Alter_ego

You already know the answer I'm sure.

tomtom256

In short no, from what you statem the money was hidden with her friend and not loaned, as it would be unlikley the friend would be able to fined the money to pay her back.

She should have lived on this money until below £16k at which point she claim at a reduced rate until her capital went below £6k.

It's highly likely that this will get flagged at some point, via one of the various data matches the government runs on a regular basis.

poppy12345

tomtom256 said:

In short no, from what you statem the money was hidden with her friend and not loaned, as it would be unlikley the friend would be able to fined the money to pay her back.

She should have lived on this money until below £16k at which point she claim at a reduced rate until her capital went below £6k.

It's highly likely that this will get flagged at some point, via one of the various data matches the government runs on a regular basis.

Without knowing exactly what benefits she's claiming we can't judge. She may not be claiming any means tested benefits.

TELLIT01

poppy12345 said:

tomtom256 said:

In short no, from what you statem the money was hidden with her friend and not loaned, as it would be unlikley the friend would be able to fined the money to pay her back.

She should have lived on this money until below £16k at which point she claim at a reduced rate until her capital went below £6k.

It's highly likely that this will get flagged at some point, via one of the various data matches the government runs on a regular basis.

Without knowing exactly what benefits she's claiming we can't judge. She may not be claiming any means tested benefits.

Agreed, but the wording from the OP would lead to an assumption that the sister is in receipt of income related benefit.  If that is the case, then benefit fraud has potentially been committed from the day she received the £27.5k. Giving the money to another person is almost certainly going to be viewed as Deprivation of Capital, and she clearly thought she knew the rules given the comment about a £6k limit.

SambukA991

Im not 100% sure on which benefits she receives without asking, but she does not work, she rents a room which she receives benefits for and also receives benefits to live on.
I wasnt sure if as she did not have the money herself (in her own bank)  to be able to use and spend, if this would be need to be claimed, but knowing she kept exactly 6k for herself makes me think it did.
Thank you all for you comments, I really appreciate it

poppy12345

If she claims Universal Credit and council tax reduction then these are both means tested benefits. As well as housing benefit, Income Related ESA/JSA etc etc.

As has been advised, giving the money away is classed as deprivation of capital and she'll still be classed as having all the money.

It does seem like she knew what she was doing when she "loaned" the money to a friend and also now wants to do the same to you. If DWP/her local council found out about the money then it will be benefit fraud and they will eventually find out.

If she's claiming New style ESA/JSA or Contributions based benefits then these are not means tested.

Pollycat

SambukA991 said:

Im not 100% sure on which benefits she receives without asking, but she does not work, she rents a room which she receives benefits for and also receives benefits to live on.
I wasnt sure if as she did not have the money herself (in her own bank)  to be able to use and spend, if this would be need to be claimed, but knowing she kept exactly 6k for herself makes me think it did.
Thank you all for you comments, I really appreciate it

But wouldn't the pension money she received have to be paid into her account?

It would show as a deposit then a debit to her friend.

poppy12345 said:

If she claims Universal Credit and council tax reduction then these are both means tested benefits. As well as housing benefit, Income Related ESA/JSA etc etc.

As has been advised, giving the money away is classed as deprivation of capital and she'll still be classed as having all the money.

It does seem like she knew what she was doing when she "loaned" the money to a friend and also now wants to do the same to you. If DWP/her local council found out about the money then it will be benefit fraud and they will eventually find out.

If she's claiming New style ESA/JSA or Contributions based benefits then these are not means tested.

I think this too.

I'd refuse to collude with your sister.

Galloglass

Isn't the penalty for fraud, if it is fraud, less if the issue is flagged up before they find it out?

Sounds as if the sister should raise the issue rather than hide it and hope it is not fraud.

Sea_Shell

Regardless of any possible benefit fraud, I'd not be allowing any money to pass through, or be held in my account, that was not genuinely mine.

The last thing you need is to have your account blocked for suspected money laundering!!