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Rate of spending inheritance when on benefits

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Rate of spending inheritance when on benefits

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Hello all, I'm after some advice regarding my little dilemma. My family have recieved some inheritance and we claim benefits for disability, not only pip but obviously what else comes with universal credit. As per the rules we have informed the DWP and are currently living off the money, I'd like to discuss what I can only describe as a grey area after hours of research. We have 22k and we are aware the sum must be spent at a reasonable rate, but what is described as a 'reasonable rate. I ask in relation to buying a car in the main, we are a family of 6 and need something to support our needs. We are not replacing our old car for fun, but for necessity. I have found something ideal for around the 4-5 thousand pound mark, so my question is does anyone know or have any experience in this? I know replacing essential items is allowed under this rule, but is this classed as reasonable? After contacting the DWP even they themselves informed me that my situation is somewhat of a grey area. Any information  would be fantastic, I don't want any BS like 'oh just soend it all you will be fine and all that jazz, I am fully aware of the law and rules attached to my situation and want everything to be above board. Thank you in advance.
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Replies

  • Se7en7Se7en7 Forumite
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    Name Dropper First Post
    One quick addition sorry, I have a small amount of debt (£2000) would it be reasonable to pay this off without facing any future issues? 
  • hucksterhuckster Forumite
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    You are not going to have available any black/white clear guidance on this, because peoples circumstances can be very different. If you have family of 6, do not have another suitable reliable vehicle to use and buying a reasonably priced car for say £6k is going to enable you get to important appointments, commute to possible workplaces if relevant etc, then it would be a reasonable use of the capital you have available. On the other hand, if you bought a 2 seater sports car, when you already had a family car to use to travel to anything important, then it could be argued that this was not reasonable.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • hucksterhuckster Forumite
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    Yes you can pay off debt, but keep paperwork just in case needed.
    The comments I post are personal opinion. Always refer to official information sources before relying on internet forums. If you have a problem with any organisation, enter into their official complaints process at the earliest opportunity, as sometimes complaints have to be started within a certain time frame.
  • calcotticalcotti Forumite
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    It isn't about the rate at which you spend it, it's about what you spend it on. Was the expenditure reasonable in the circumstances?
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • Se7en7Se7en7 Forumite
    8 posts
    Name Dropper First Post
    I havent spent anything yet. My intentions are to buy a new (used) family 7 seater car, and pay off the 2k debt
  • Se7en7Se7en7 Forumite
    8 posts
    Name Dropper First Post
    Thank you all for your help thus far... Any further information  is always appreciated 
  • KatrinaWavesKatrinaWaves Forumite
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    Se7en7 said:
    Thank you all for your help thus far... Any further information  is always appreciated 
    What further information do you require? Huckster and Calcotti have said all that can be said on this matter. 
  • Se7en7Se7en7 Forumite
    8 posts
    Name Dropper First Post
    Reassurance to be honest, people who have prior experience with his. I am still apprehensive to spend, i have heard some horror stories. For example... Huckster has a disclaimer at the bottom saying all his replies are opinion... Now Calcotti then, info they post is for England, i am from Wales.
  • KatrinaWavesKatrinaWaves Forumite
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    Buying a used car for the price your stated and paying off debt is highly unlikely to be considered deprivation. No one can give you a concrete answer. Even if someone came along and said ‘I bought X car and it was fine’ doesn’t mean it will be fine for you.

    The things you have stated would be fine. Issues come when people start spending money in ways that people on low incomes cannot do, or to do it purely to get back into benefits. From what you have described that is now what you are doing.

    But as Huckster said, ONLY the decision maker can make that decision. 100 people on here could say it was fine and they did the same as you and we’re fine, and the decision maker may still for some reason decide that it’s not reasonable. 
  • pmlindyloopmlindyloo Forumite
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    Have you read this?
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/890315/admh1.pdf
    H1795 onwards
    This will help you understand why it is a grey area.
    Paying a debt is allowed but buying the car is the grey area.  What is wrong with your current car?  If there is nothing major wrong with it then you could keep it, pay for any necessary repairs and not replace it until later.
    You could write formally to the DWP about buying the car and see what they say.
    People may have experiences of deprivation of capital but any decision is made by a decision maker and, of course, these will have different opinions.
    Note that deprivation of capital can only occur when capital is spent to get Universal Credit or more UC.
    Based on what you have said, paying off the debt and buying a car for the price you mention now would take you below the £16000 cut off point.
    Hence my suggestion to wait a while.  Your normal outgoings will reduce the capital fairly quickly if you have rent/mortgage to pay.
    I can imagine how difficult it is to get an inheritance and not be able to spend it as you wish but it is what it is.
    Is there any chance of increasing your income yourself?  (Sorry, don't know your circumstances)
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