Is this fraud?

penniejane

Sorry if this is wrong place to post.
My daughter had a head-on collision in July 2016 and was encouraged by the hospital to take the person to court on a no win, no fee case. She is due to get her money soon. Her father is pressuring her into opening a fake business account to out her money in and he says she can then still claim benefits. 
I am sure this is fraud but I need to get proof so I can show my daughter. She thinks it is fraud too but I want solid proof.
He has done this already with his girlfriend's inheritance while they live together and claim benefits. 
By law, as she is currently claiming benefits, once her payment from this case arrives, she must declare it to the benefits system and then live on her payment until it has been spent.  His idea of creating a fake business account would mean that she would still claim benefits, including Housing Benefit, Council Tax Benefit and PIP(I need to ask her what else she gets in terms of benefits).  So in essence, she will have her £xxx,xxx.xx in another account AS WELL as her benefits.  Which in my eyes is fraud and if she is caught could potentially be an imprisonable offence.  (We both have ASD so we are very, very honest and this does not sit well with either of us).  I don't think she will do this but I want proof that this is illegal so I can show her.

[Deleted User]

Google deprivation of assets 

penniejane

_shel said:

Google deprivation of assets 

Thank you for the legal term - I have Googled and this is what I am sure is illegal.  I need to know what could happen if she is caught.  I want to make sure she knows the reality of his suggestion.
Thank you x

TELLIT01

You and your daughter are correct that hiding assets in order to claim income related benefits is fraud.  As your ex has a history of this it's certainly not a good idea to listen to advice from them.  I'm sure others will be along who can provide links to the relevant bits of law.

poppy12345

Yes, fraud for all means tested benefits which includes, housing benefit, CTR, Income Related ESA/JSA, Universal Credit. PIP won't be affected because it's not means tested. Savings of less than £6,000 are ignored. For every £250 (or part there of) over that amount there's a £1 deduction. Savings over £16,000 and all means tested benefits end.

It would also be fraud if she opened the "fake" business account.

tomtom256

I thought certain personal injury payments where disregarded, so may worth looking into that.
If it doesn't fall under any disregard rules, then yes, hiding assets in order to claim means tested benefits is fraud.

Grumpy_chap

Is this fraud?  
Here are some pointers:

PinkPJs said:

fake business account 
I am sure this is fraud
She thinks it is fraud too
His idea of creating a fake business account would mean that she would still claim benefits
in my eyes is fraud
and if she is caught could potentially be an imprisonable offence.  

The OP knows the answer to her own question.

In terms of this idea, it is also (as I understand it) not as simple as suggested either:
UC can ignore the "working capital" of a business, but at the time the income is received into the business, UC will "look through the veil" of the business to assess the individual's income as including the income to the business.  The business owner will need to report payments into the business at the time they are received as though they were payments to the individual (but the business receipts can then have expenses deducted).  There are others that can explain this better and more completely than I can, but the following link gives some information:
https://www.gov.uk/self-employment-and-universal-credit

Once the fake business account exists, there is an ongoing need to prepare accounts for the business and complete tax returns declaring self-employment etc.

Oh, it's getting difficult to track where this could go.  That's the trouble with "bending" one rule, you then need to "bend" the next rule to make the first "rule bend" stack up.

The following is also incorrect and should really be reported:

PinkPJs said:

He has done this already with his girlfriend's inheritance while they live together and claim benefits. 

The core benefits system is there to support those that truly have no other financial means.  It is not there to support those who simply feel entitled.  There are exceptions to this, "universal" benefits plus those benefits that go towards "equalisation", so for example disability benefits providing support with the additional costs incurred that the average person does not incur.

pbartlett

Jail for £96,000 benefit cheat Helen Ryan, who had £184,000 in savings - BBC News

calcotti

The proposed action would be fraud. In this case attempting to circumvent the rules may not be necessary anyway.

If it is an injury compensation payment it can be disregarded for 12 months and if placed in trust during that time will be disregarded indefinitely.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932331/admh2.pdf
Paragraph H2028 deals with the indefinite disregard if put in trust
Paragraph H2094 deals with the initial 12 month disregard.

This document is the guidance for Universal Credit. There is similar guidance for legacy benefits. OP doesn't state which DWP means tested benefit is being claimed so I can't reference the specific guidance.

The lawyer helping with the compensation claim should be able to help with setting up an appropriate trust.

Of course whether any of this matters depends on the size of the payment. If her total capital is below £6000 after the payment it is disregarded anyway.

GHolmesAdmin

I can never understand why someone with plenty of money would put themselves to hassle and risk to gain a pittance more. My main concern from this is why is he handling his girlfriends finances? I wouldn't let a transient boyfriend near mine.

Pollycat

The OP originally posted on the Marriages board and was advised to post here.

https://forums.moneysavingexpert.com/discussion/6245815/is-this-fraud#latest

calcotti said:

The proposed action would be fraud. In this case attempting to circumvent the rules may not be necessary anyway.

If it is an injury compensation payment it can be disregarded for 12 months and if placed in trust during that time will be disregarded indefinitely.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932331/admh2.pdf
Paragraph H2028 deals with the indefinite disregard if put in trust
Paragraph H2094 deals with the initial 12 month disregard.

This document is the guidance for Universal Credit. There is similar guidance for legacy benefits. OP doesn't state which DWP means tested benefit is being claimed so I can't reference the specific guidance.

The lawyer helping with the compensation claim should be able to help with setting up an appropriate trust.

Of course whether any of this matters depends on the size of the payment. If her total capital is below £6000 after the payment it is disregarded anyway.

I did mention this to the OP, glad you've confirmed this and expanded on the information.