I'm having a panic My Inheritance and Benefits

TashPot

Sadly we lost both my Aunt and my Nan in the last year. Amazingly I was given £3000 from my nan, which is sitting in my savings account and i have just had work that my Aunts estate is ready to be distributed and it could be around £10,000 (although I dont have a final figure).

My panic is that I get Working Tax Credits and Child Tax Credits, Child Benefit and Local Housing Allowance. My wages are £1200 per month roughly and my son has £1700 in a savings account which I know is tied to me in name until he is an adult. I am a single person.

I'm panicking because I think the money from my aunts estate will surely affect either my tax credits or my LHA somehow but I don't know how! I don't want to get into trouble by not declaring it.
My aunt and my nan would want me to use the money wisely and I'd hate it to be eaten up by my living costs (i live from payslip to payslip as most single parents do). Id happily let it sit in my account until I was ready to use it, but if I have it, then my benefits surely change?

My plan would be to put some of it towards a new car and earmark some of it for a holiday once the world has calmed down.

I'd really appreciate your help to decide what to do with it or how it will affect my income.  One option would be to have it paid to my parents to hold, but is this legal?
Thank you

DiggerUK

This issue might get better suggestions on the benefits board. For now I'll raise your hopes that all looks fine for you.
Double check, but last time I looked you could have £6K in savings without any problems, it has a tapered reduction up to £16K.

There are a number of safe ways to spend the money. Clearing debts, home improvements, replacement car and the like. Some siren voices will come and post, screaming about "deliberate deprivation of assets".....ignore them, you can just spend some of it.

Legacies are a bittersweet experience, but you can at least  look forward to a well provisioned  xmas. Best of fortune..._

Sailtheworld

I think the first £6k worth of savings are ignored. Every £250 beyond that are treated as £4.35 of income.

In your case you'll have £13k in savings so minus £6k = £7k which is 28 lots of £250 and therefore equivalent to £121.80. That's the amount that will be taken off your universal credit.

Paying the inheritance to your parents could be viewed as benefit fraud and using it to buy a car could be seen as deprivation of assets. 

How do savings and lump sum pay-outs affect benefits? - Money Advice Service

theoretica

If you need the car for transport (rather than blowing it all because you want something snazzy) that is an allowable expense.

Your son's savings should not count - assuming they are in an account in his name and aren't your savings that you just passed over to try and hide.  So you can't give him this inheritance, but the long standing account will be fine.

strawb_shortcake

Your WTC & CTC won't be affected, you only need to let them know if your interest comes to over £300 per year which probably isn't achievable on the inheritance. 
The housing allowance will be I think but not sure how

Alice_Holt

As above WTC & CTC do not have capital limits.
https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/capital-rules/

Your Housing benefit will be affected (as will any Council Tax support you get).  Over £16k of savings will end HB - between £6k to £16k a tariff income will be applied and will reduce it.
I would suggest you look at your council web page on HB and savings for more info. You would need to notify the council of savings over £6k.
Spending on reasonable items would be unlikely to be considered deprivation of capital.   The test is whether you are deliberately spending money with the intention of increasing / getting benefits. 
https://medium.com/adviser/a-guide-to-deprivation-of-capital-income-3209a4b50720
 
However, if your parents "hold" the money for you, then this action would be seen as deliberately giving money away with the clear intention of maintaining your benefits.  
I would suggest that when you get the first tranche of inheritance money you could perhaps use it for essential items. Keep all receipts and a rationale for the expenditure.


One word of caution, if the savings do cause your HB claim to end - then you cannot reapply for HB in future to help with rental costs. You would need to claim Universal Credit, and this would end the Tax Credits claim. 
https://www.citizensadvice.org.uk/benefits/universal-credit/

Since you are currently receiving Tax Credits, then I take it that you are not in receipt of Universal Credit, and the help with housing rental costs is through Housing Benefit (based on your LHA).