Inheritance money

hilz47

My friend is due to inherit approximately £16,000 from her late mothers estate. They are in a warden controlled council house and they receive a reduction in council tax as they only have their married pension coming in. When they receive this money will it affect their entitlement to the reduced council tax as they are worried that all the inheritance money will have to be used for their normally living expenses.

xylophone

It might - they should check the information on their council's web site concerning capital and council tax reduction.

elsien

What else would they be spending it on?
That's a genuine question because as long as they are not spending ridiculous amounts to get rid of it as quickly as possible,  if they wanted new furniture or a holiday (for example) they could still do that without anyone querying where the money had gone .
However in my area there is a 16K savings limit for council tax support anyway.

calcotti

If they are both state pension age then they will not be entitled to Council Tax Reduction if they have more than £16,000 of capital. Once it drops below £16,000 they may have some entitlement but it will be reduced by £1/week for every £500 over £10,000.

If they are getting guarantee Pension Credit then any capital over £10,000 will affect Pension Credit in the same way as described above but if some guarantee Pension Credit remained payable then they would remain entitled to full CTR.

These are standard rules for pensioners. For working age claimants the rules differ between local authorities.

KatrinaWaves

hilz47 said:

they are worried that all the inheritance money will have to be used for their normally living expenses.

You do realise that’s what people usually spend their money on?  What is worrying about paying their normal living expenses? 

Spoonie_Turtle

KatrinaWaves said:

hilz47 said:

they are worried that all the inheritance money will have to be used for their normally living expenses.

You do realise that’s what people usually spend their money on?  What is worrying about paying their normal living expenses? 

When my Dad received a lump sum of pension money, my parents were looking forward to being able to use it for a nice holiday (like staying in a cottage in Cornwall, instead of the cheapest caravan they can find in the middle of Wales), decorating the house (new carpet in the living room for the first time in 20 years, maybe decorating their bedroom which hasn't been decorated since we moved in 25 years ago, even *gasp* laminate flooring in the dining room to replace 15-year old lino). Not lavish living by any means, but a little something extra than the normal daily slog. [As it happens they didn't get to do any of that, but that's irrelevant to the point.] For people who've never had money left over to treat themselves, the idea of a windfall such as an inheritance is generally looked forward to as a chance to do that, so it is gutting *if they then* have to use it *only* on the same mundane stuff as ever before.

But at the same time, there has to be balance and there has to be a cut off point for support from the state.

elsien said:

What else would they be spending it on?
That's a genuine question because as long as they are not spending ridiculous amounts to get rid of it as quickly as possible,  if they wanted new furniture or a holiday (for example) they could still do that without anyone querying where the money had gone .
However in my area there is a 16K savings limit for council tax support anyway.

Indeed. 

(Edited slightly for clarity)

KatrinaWaves

I agree it is nice to be able to have money to spend as you please, but to worry about having to spend a windfall on boring bills. No it’s nothing to worry about, and it annoys me when people who aren’t paying the mundane things ‘worry’ or get annoyed that their fun money is having to be spent on the things that someone else paid for them previously.

I understand being ‘gutted’ but it’s tough, sorry! 

calcotti

Spoonie_Turtle said:....  Not lavish living by any means, but a little something extra than the normal daily slog.....For people who've never had money left over to treat themselves, the idea of a windfall such as an inheritance is generally looked forward to as a chance to do that, so it is gutting to them have to use it on the same mundane stuff as ever before. 

But all of the things you describe would likely be considered as reasonable expenditures and not deprivation of capital so would not affect benefits (other than for a short period between receiving the money and spending it).

Spoonie_Turtle

calcotti said:

Spoonie_Turtle said:....  Not lavish living by any means, but a little something extra than the normal daily slog.....For people who've never had money left over to treat themselves, the idea of a windfall such as an inheritance is generally looked forward to as a chance to do that, so it is gutting to them have to use it on the same mundane stuff as ever before. 

But all of the things you describe would likely be considered as reasonable expenditures and not deprivation of capital so would not affect benefits (other than for a short period between receiving the money and spending it).

I quite agree, but the point was that's the kind of reasonable desire to use the money for other than daily living expenses.

The attitude the poster took seemed to me to imply that people shouldn't expect to be able to use it for anything other daily living expenses, which is thankfully not the view taken in legislation when dealing with savings!

oh_really

hilz47 said:

they are worried that all the inheritance money will have to be used for their normally living expenses.

Would they prefer taxpayers to fund their living expenses? I'll keep them in mind when I'm dragging my carcass out of bed on a cold Feb morning to travel across the UK to a meeting I cant be @rsed about, I'll rest easy knowing they still have that 16 grand and their bills paid for them.

haz25a

Can the solicitor that dealt with the inheritence help at all? They might be clued up on deprivation of capital. Failing that, contact money advice centres, CAB or somewhere like that. They should be able to advise on deprivation of capital as it can be quite complicated.

Good luck.