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Inheritance and benefits

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Hi all. Bit of a longish post but really hoping someone can advise.

Me and my family lost my mother and as a result there will be some money due by inheritance. Now I work and am not worried about any affect it may have for me, however, 2 of my siblings are both disabled and both receive universal credit, housing benefit and council tax benefit as part of that and both receive PIP.

Now as I understand it their PIP would not be affected, but their universal credit, housing and council tax may be.

My other concern too is that they each have a child from a former relationship and I wondered if it could affect anything to do with child maintenance too.

Now, both previously worked but due to progressive illnesses they are now unable to work so this is not a case of they are on benefits because they won't work but it's a necessity to keeping them comfortable and I oversee their bills and assist with budgeting etc so I'm concerned as to how it can affect their living situation long term.

The money of course is bitter sweet in nature as it is a result of our mothers passing, and will make some things possible for each of us, but how much affects their benefits and would they have robin effect live of this money until it runs out then reclaim? They are each looking to inherit £16k each.

So of course it will be declared bug I need to prepare them both mentally that this windfall intended to make things easier for them may in actual fact just be used to live off.

Any advice or figures as to what may happen would be greatly appreciated. Thank you.
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Replies

  • KatrinaWavesKatrinaWaves Forumite
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    At 16k, assuming they have no other money, then their benefits will be affected at a tapering level until their benefits reach 6k. If they have other savings so this inheritance takes them above 16k then their entitlement to UC will stop, and most councils have a similar level for HB and CT support (I am assuming one is one housing benefits and one is on UC as you cannot claim both unless in quite specific circumstances I don’t think they would fit into)

    they can use the money to buy things but they cannot buy things simply to reduce their money to claim more benefits, as that would be seen as deprivation of capital. Reasonable spending is fine.

    i do not believe this will effect child maintenance. 
  • TELLIT01TELLIT01 Forumite
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    What is the current situation with UC if you cease to qualify, as would be the case with savings in excess of £16k.  When UC came in it was stated that UC doesn't actually close, but stays dormant to speed up any subsequent claims.  Since then I have read at various times that it closes completely after 6 months, and at other times that it closes immediately and a new claim would need to be made. 
    Any clarification would be helpful.
  • calcotticalcotti Forumite
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    TELLIT01 said:
    What is the current situation with UC if you cease to qualify, as would be the case with savings in excess of £16k.  When UC came in it was stated that UC doesn't actually close, but stays dormant to speed up any subsequent claims.  Since then I have read at various times that it closes completely after 6 months, and at other times that it closes immediately and a new claim would need to be made. 
    Any clarification would be helpful.
    Normally I would expect the claim to be closed as soon as there is no UC payable in a month. However the UC journal remains accessible for six months and a rapid reclaim can be made through the journal. After six months access to the journal disappears and any reclaim is a complete new claim process.
    Currently claims can be kept open for six months even if there is nil entitlement as part of the coronavirus response.
    In any case it is my understanding that the closing of the claim is not automatically done by the software and requires manual intervention so even in normal times closure is not necessarily immediate. This is to allow human discretion to keep the claim open if it appears sensible to do so.

    I don't know if breaching the savings threshold would be treated differently as in that case the claimant would no longer be eligible for UC (as opposed to have a nil amount payable).
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
  • TELLIT01TELLIT01 Forumite
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    Thanks calcotti.  It doesn't affect me but may help clarify the situation for others.
  • NedSNedS Forumite
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    Once a claim is closed (for whatever reason), if the claimant makes a new claim using the same account (same login details) within 6 months (or within 6 APs to be more accurate) then it is treated as a rapid reclaim. This means the claimant retains the same AP end date and same pay date. It also means the claimant only needs to confirm any changes in circumstance since the original claim and doesn't need to verify their identity again. This makes it relatively straight forward for claims to open and close if, for example, earnings vary or someone is in and out of work.
    In the case of capital from an inheritance, if the claim was closed due to capital exceeding £16,000, and the claimant later reclaimed within 6 APs based on a change of circumstances in that their capital had now dropped below the £16,000 limit, they would need to verify that change by providing evidence, but other aspects of the claim would remain the same.
  • LucyNorthernLucyNorthern Forumite
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    NedS said:
    Once a claim is closed (for whatever reason), if the claimant makes a new claim using the same account (same login details) within 6 months (or within 6 APs to be more accurate) then it is treated as a rapid reclaim. This means the claimant retains the same AP end date and same pay date. It also means the claimant only needs to confirm any changes in circumstance since the original claim and doesn't need to verify their identity again. This makes it relatively straight forward for claims to open and close if, for example, earnings vary or someone is in and out of work.
    In the case of capital from an inheritance, if the claim was closed due to capital exceeding £16,000, and the claimant later reclaimed within 6 APs based on a change of circumstances in that their capital had now dropped below the £16,000 limit, they would need to verify that change by providing evidence, but other aspects of the claim would remain the same.
    Hi
    Is there information anywhere as to how various amount affect benefits? Im struggling to find out any clear information, for example, how 16k would affect things, how 15k would affect things, a scale almost so to speak. I need to try and prepare him mentally for what might happen, and then of course explain to them that the money may have to in effect be their income and to help them treat it as such.

    I rang the Universal Credit helpline and asked but they actually stated "we need to know the figure before we can give any information" so couldnt even tell me if they would lose benefits or if they would lose partial.

    We have found that the costs before inheritance may be more as the existing mortgage that needed to be settled and solicitor fees etc were higher than expected so it could even now be more like £14k...

    So stressful.....
  • KatrinaWavesKatrinaWaves Forumite
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    A quick google will give you guides on which benefits are affected and how. Here’s one I found:

    https://www.google.co.uk/amp/s/www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits/amp

    benefits services can only give you advice with specific amounts, they can’t run through every single version of events. You tell then what you have, they tell you the situation. I appreciate you are trying to prepare for this inheritance but that is not the job of the benefits advisors on the phone. They are there to give advice based on what is happening, not predictions and estimates. 

    I truly wouldn’t stress. They are getting a windfall, which they can use sensibly to improve their live and pay their bills until it falls to a level where full benefits will come back. It is not stressful. No matter what they will be in a better position than they were before, or the same! Why are you stressed? 
  • LucyNorthernLucyNorthern Forumite
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    A quick google will give you guides on which benefits are affected and how. Here’s one I found:

    https://www.google.co.uk/amp/s/www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits/amp

    benefits services can only give you advice with specific amounts, they can’t run through every single version of events. You tell then what you have, they tell you the situation. I appreciate you are trying to prepare for this inheritance but that is not the job of the benefits advisors on the phone. They are there to give advice based on what is happening, not predictions and estimates. 

    I truly wouldn’t stress. They are getting a windfall, which they can use sensibly to improve their live and pay their bills until it falls to a level where full benefits will come back. It is not stressful. No matter what they will be in a better position than they were before, or the same! Why are you stressed? 
    Its more the trying to communicate this to one brother who is autistic, and another who has schyzophenia, they feel the need to be prepared and know anything possible. That's the stressful part. xx
  • Spoonie_TurtleSpoonie_Turtle Forumite
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    For UC the deduction is £4.35 for every £250 or part thereof over £6000, so the maximum deduction for savings between £15975.01-£15999.99 would be (£10000÷250 = 40)x£4.35 = £174 per month. I believe for legacy benefits e.g. ESA it's £1 per week for every £250 or part thereof (but I'm not overly familiar with legacy benefits so please someone correct me if I'm wrong!)

    Council tax and HB I don't know - councils all seem have slightly different rules anyway for amounts of support as far as I understand.
  • KatrinaWavesKatrinaWaves Forumite
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    A quick google will give you guides on which benefits are affected and how. Here’s one I found:

    https://www.google.co.uk/amp/s/www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits/amp

    benefits services can only give you advice with specific amounts, they can’t run through every single version of events. You tell then what you have, they tell you the situation. I appreciate you are trying to prepare for this inheritance but that is not the job of the benefits advisors on the phone. They are there to give advice based on what is happening, not predictions and estimates. 

    I truly wouldn’t stress. They are getting a windfall, which they can use sensibly to improve their live and pay their bills until it falls to a level where full benefits will come back. It is not stressful. No matter what they will be in a better position than they were before, or the same! Why are you stressed? 
    Its more the trying to communicate this to one brother who is autistic, and another who has schyzophenia, they feel the need to be prepared and know anything possible. That's the stressful part. xx
    Who is in control of their money? Them or you?

    if it’s you, continue giving them the same amount they would normally get as their benefits and tell them if they think they need anything new or want something, to ask you if there’s enough money for that. 
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