Cash Gift to adult child who is claiming Universal Credit

TCGdragon

Hi all. I hope someone can suggest an answer to this please? My wife and I are retired and would like to make a large cash gift (£20,000) to one of our adult children to enable a car to be purchased. Our adult child may be made redundant shortly and we are concerned the large cash gift may impact on any benefits claimed, being regarded whilst in that person's bank as savings. Any help, guidance, referral to regulations covering this point would be greatly appreciated.

NedS

If they have savings of more than £16,000 then they will not be able to claim means tested benefits.

To avoid any potential issues here, the simplest method is for you to hold onto the cash and pay for the car once it is chosen. If you give them the cash, it becomes their capital and will then be taken into account should they need to claim benefits. If they then choose to spend a large amount of capital on a car, that could be seen as deprivation of capital, even though that is what you intended the gift to be used for (a decision maker would make a determination if spending £20,000 on a car was reasonable when they had no other means to support themselves. A £3,000 could likely serve the same purpose). Personally I would not be spending £20,000 on a car having just been made redundant and having no means to support myself.

poppy12345

Do you claim any means tested benefits yourself? If you do then giving your money away like this will also be seen as deprivation of capital for you and will affect any means tested benefits you maybe claiming. £20,000 gift to buy a car is a huge amount of money.

TCGdragon

poppy12345, thanks for taking the time to view and respond. We do not claim any benefits.

TCGdragon

NedS, thanks for viewing and responding. Understood.

Grumpy_chap

Does you adult child currently claim UC?
Will they receive any redundancy pay?  That may affect UC eligibility also.