17K inheritance while on benefits

MrsFujiwara

Hi, this is my background: I am a lone parent in my 40s with a disabled son. I live in private rented accomodation and receive legacy benefits (IS, HB, CTC, CB) CA and DA for my 9 year old child. 
I will be inheriting around £17K from a French relative (in France). I would very much appreciate some guidance about what to do when this happens as I believe that most of my benefits will be gone. 
What would be the wisest way to manage this amount of money? It is a lot in a lump sum, yet at the same time it won't last for very long if I have to come off most of the benefits. 
Apologies if I am incorrect. I would appreciate any advice you have. 

poppy12345

MrsFujiwara said:

Hi, this is my background: I am a lone parent in my 40s with a disabled son. I live in private rented accomodation and receive legacy benefits (IS, HB, CTC, CB) CA and DA for my 9 year old child. 
I will be inheriting around £17K from a French relative (in France). I would very much appreciate some guidance about what to do when this happens as I believe that most of my benefits will be gone. 
What would be the wisest way to manage this amount of money? It is a lot in a lump sum, yet at the same time it won't last for very long if I have to come off most of the benefits. 
Apologies if I am incorrect. I would appreciate any advice you have. 

When the money goes into your bank your Income Support, Housing benefit and council tax reduction will end because you will have savings of more than £16,000. Your CTC, CA and DLA will continue because they are not means tested. You will need to report the changes to DWP and your local council.

Once your savings go under £16,000 you can reclaim means tested benefits but you will have to claim Universal Credit. When you claim UC then your tax credits will end. You will have a deduction of £4.35 per month for every £250 (or part there of) over £6,000.

pmlindyloo

It is worth knowing that debts can be repaid under Universal Credit so if you have any then it would be worth paying these from your inheritance. 

You can also buy household items that need replacing, go on holiday (when you can) and even buy a small car.  All purchases should be reasonable and not extravagant. 

You may be asked for proof of purchases so do keep receipts.

Of course you will have to pay your rent and council tax (don't forget to inform your local council of your increased savings) so it would not be long before you reach below £16000.

You can then notify UC each time your savings dip another £250.

You can put different scenarios into a benefits calculator to see how much Universal Credit you would be entitled to once your savings dip below £16K.  You can use www.entitledto.co.uk.

MrsFujiwara

Thank you for your replies so far. 
I do not have any debts and I already own a reliable car. 
Fortunately my lovely landlord keeps good maintenance of the house and its appliances. 
Having a disabled child has made me more money conscious so I am careful about how I use what I have. 

I have heard Martin Lewis advising those on legacy benefits not to switch to UC if they can avoid it as in many cases there's been a loss of income. 
This is also something that worries me when the 17K runs out. 

Alice_Holt

MrsFujiwara said:

This is also something that worries me when the 17K runs out. 

     Just to be clear, and as the other forumites have advised. 
     You can claim UC when your savings dip below £16k.
    Do not wait until "the 17k runs out"
   
   Check separately with your council to find out at what level of savings you can reclaim Council Tax Support, each LA scheme is individual. 
     

poppy12345

MrsFujiwara said:

I have heard Martin Lewis advising those on legacy benefits not to switch to UC if they can avoid it as in many cases there's been a loss of income. 
This is also something that worries me when the 17K runs out. 

Not everyone is worse off when claiming UC. Once your IS and HB end then you won't be able to reclaim them anytime in the future. So, if you decide not to claim UC then your tax credit will of course continue but then you will have to pay the rent yourself from your tax credits, so it seems rather odd not to claim UC once your savings go below £16,000. Of course you need to take into consideration the reduction you'll have because of your savings when you claim UC. Use a benefits calculator to check entitlement when the time comes and then you'll have some idea what you'll be entitled to.

calcotti

MrsFujiwara said: I have heard Martin Lewis advising those on legacy benefits not to switch to UC if they can avoid it as in many cases there's been a loss of income.

In some cases there is, in many there is an increase. I think the advice is that, where there is a choice, people should check carefully before choosing to switch. 

HouseTargaryen

Contact the executor of the will and ask for half of the inheritance one month and half the month after. Surely that's not a big ask. That will give you one month to spend over £1,000. Surely there's something you can spend it on. Summer 2022 holiday? Then be clever to get your savings down to under 6k over the next year or two. 

Mojisola

MrsFujiwara said:

I do not have any debts and I already own a reliable car. 
Fortunately my lovely landlord keeps good maintenance of the house and its appliances. 
Having a disabled child has made me more money conscious so I am careful about how I use what I have.

Is there anything that would help your child - aids not provided by the NHS, private treatments, holiday at a suitable location?

birdofafeather

Just suck it up and go off benefits for a while.

The benefits cap is £16,000 - however you will be penalised by £4.35 for everyone £250 above that so that's £174 pound out of your UC for the £16,000, £169.70 for the £15,750 etc, so you'll need to become accustomed to using the savings to subside your benefits for the foreseeable future. Based on your OP your UC rate would be 235.89 for the £16,000 so you'll need to use the savings to cover your excess expenses when you get below that level. It seems harsh but other people are paying for this, so why should they be subsidising your living costs if you've got £17k in the bank? 

With respect, benefits are there to help people who are in need of support, with 17k of savings you are no longer in need of support. Use the savings to support your lifestyle at the same level it was and then either claim UC/return to work once you can, like the hundreds of thousands of others who find themselves in similar situations every year. What makes you think you're any more entitled to benefits than all the other people in similar situations with large savings? You're inheriting your money, your thoughts should be on how lucky you are to inherit a incredibly generous sum of money, not how you can game the system to keep the same amount of benefits.  Be glad you are now at least for a little while rich enough not to have to deal with the inhumane, horrible system that is the universal credit/jobcentre 

To be clear some of the suggestions above are fraudulent and could land you in a lot more trouble. Spend the money on the same expenses you would have spent it on anyway, or reasonable expenses beyond that - UC will check and can count any money you spent on frivolous things are part of your savings for calculating your benefit (i.e if you buy a £5,000 telly you could be assessed as having 17k in savings rather than 12k once you've bought it if they want to be by the book).  Giving the money to some else so you can continue to claim benefits is much more straight forwardly fraudulent, especially if they give it back to you in cash. 

With the greatest respect, you're being frozen out of benefits due to luck rather than due to working your !!!!!! off for your entire life and putting a bit aside like many many others have found themselves during a pandemic, so you don't have much to complain about.

If you really want to get yourself below threshold, paying a few months rent upfront might be your best bet with the money as housing is an essential cost but confirm that with the benefits office before you do it.