ESA Support Group: About to inherit money over £16000 limit.

ChrisGn

I am currently in receipt of ESA and in the Support Group and as such also receive Housing Benefit, Full Council Tax benefit and free prescriptions etc.

I have just been left ~£40000 in a will, which I will be receiving next week.  This will obviously take my savings well above the £16000 threshold.

Are there any options for me to continue to receive ESA, Housing benefit etc..  I have a pension scheme that was started back in the 1980's, that only had funds put in for about a year.  Could the money be placed in there?  Or are there any other legal options?

When I do contact the DWP, what should happen?  Will my ESA claim be kept open with £0.00 payments so that they still pay NI contributions, or will they try to close my claim.  Will they use the change of financial circumstances as a method of forcing me onto Universal Credit with £0.00 payments?

TELLIT01

Continuing ESA entitlement will depend on whether you are in receipt of Contributions Based, Income Related or a combination of the two.  If there is a Contributions based element that will continue but you will lose entitlement to Housing Benefit, free dental treatment etc.

ChrisGn

I am in reciept of Income Related only, so what happens with entitlements with that?

calcotti

You will need to advise DWP and your local authority as soon as you receive the money. All your means-tested benefits will stop and the claims will be closed. When your capital falls below £16,000 you will be able to claim again but it will be a Universal Credit and Council Tax Reduction rather than your existing benefits.

if you have any debts I suggest you use the money to pay these off.

If you have no earnings the maximum amount you can pay into a pension scheme in a tax year is £2,880 (the government will top this up to £3,600). 

ChrisGn

So what happens to the National Insurance contributions that I was receiving, or do I have to pay these voluntarily?

If I paid £2880 each year into my pension scheme (If the money lasts that long), would the DWP class this as purpously reducing my savings so as to be able to claim benefits again earlier than if I didn't.

How much money could I spend each year before the DWP sees this as purpously reducing capital in order to claim benefits again?

[Deleted User]

How many years N.I cont have you made, if its 35 or more it should be enough for a full pension at 66. If you are planning on cont. to your pension remember pension investments can go up as well as down, the best thing you can do is live normally on the 40k for as long as possible.

calcotti

venison said:

How many years N.I cont have you made, if its 35 or more it should be enough for a full pension at 66. 

That would depend on whether or not OP has ever been ‘contracted out’ and paid reduced NI as a result. OP, you can get a State Pension forecast by contacting the Future Pension Service https://www.gov.uk/future-pension-centre

ChrisGn said:

So what happens to the National Insurance contributions that I was receiving, or do I have to pay these voluntarily?

Because you have Limited Capability for Work you are entitled to continue to receive NI credits even though not entitled to ESA. Make clear to DWP that you want this to happen.

ChrisGn said: If I paid £2880 each year into my pension scheme (If the money lasts that long), would the DWP class this as purposely reducing my savings so as to be able to claim benefits again earlier than if I didn't.

No definite answer to that, it’s agree area.

ChrisGn said: How much money could I spend each year before the DWP sees this as purposely reducing capital in order to claim benefits again?

Again no definite answer to that. It depends what you spend it on and whether it is considered reasonable in the circumstance. It will be prudent to keep good records of how you spend the money so that if asked in the future you have evidence available.

venison said:.. the best thing you can do is live normally on the 40k for as long as possible.

Once OP has spent £24,000 they will be eligible for means tested benefits again.

ChrisGn

No, there are gaps in my NI contributions when I was self employed and wasn't earning enough to have to pay them.

The point I am making about how much can I spend, is that I believe you can't buy things as investments, as this reduces your savings.  Also what is living normally?  My current normal for the past 20+ years where every penny has to be accounted for, or a normal working persons normal?  What I don't want to do is find out that when I re-claim for benefits (Universal Credit), that the DWP reduces my payments or rejects my claim because I've spent my money too fast?

calcotti

ChrisGn said: The point I am making about how much can I spend, is that I believe you can't buy things as investments, as this reduces your savings.  

Investments are still capital assets the value of which is counted towards the capital limit.

ChrisGn said: Also what is living normally?  My current normal for the past 20+ years where every penny has to be accounted for, or a normal working persons normal?  What I don't want to do is find out that when I re-claim for benefits (Universal Credit), that the DWP reduces my payments or rejects my claim because I've spent my money too fast?

There is no definite answer. If you have never had the opportunity to replace an old sofa or bed, for example, and now choose to do so that would not be unreasonable (unless you chose top of the range most expensive items). Going on a round the world cruise (current circumstances aside) would be unlikely to be considered reasonable.

poppy12345

Just to also point out that giving the money away is also classed as deprivation of capital and you'll be classed as still having the money if you do this.

ChrisGn

Thank you for that about Limited Capability for Work and still being able to receive NI contributions.  I guess then that I will still have to go to Work Capability Assessments just to prove my eligability!!!!  Your right about the 'Contracted Out' w.r.t. pension.  I need to check into that.

Many thanks for your help.