Gift received from mother

Concerned22

Hi everyone,

My mother sold the family house and moved to a retirement flat earlier this year. As a result she gifted each of us three children £70,000. This would be straightforward but for the fact that my sister has asked for the money not to be paid directly to her as she has told us she receives benefits including working tax credit, child tax credits, council tax benefit and exemption from prescription and dental charges. Last September, when we found out that we were going to benefit from this windfall she rang me up and asked me to hold the money on trust for her, drip feeding the money to her year after year. Immediately I knew this sounded dodgy so I did my research and found out that this is known as deprivation of assets. I also discovered that working tax credits and child tax credits are not affected by savings so she could receive the money directly and take a very small financial hit on her council tax benefit. She seemed accepting of that. The next thing I know she has asked my mother to do exactly the same thing and hold her money because she doesn’t want it to affect her benefits. I now became very concerned that if she was trying to commit benefit fraud she was drawing myself and my mother into the frame. I wondered who was giving her advice. The next thing I know she tells me that a friend who works for the local citizen advice bureau has been advising her and that I should speak to him as I was in the way of my elderly and vulnerable mother of participating in her preferred arrangement. I spoke to him and he seemed like a very nice chap but he could tell that I had already done my research. He agreed with me that holding the money on trust was a clear example of deprivation of assets and that the way forward would be for mum not to give the gift at all to my sister but to wait until she has passed away and receive it then. The danger with this is that if mum went into care my sister would get nothing as the assets would be used to pay for this. I was really beginning to find the whole thing unsettling. The matter lay in abeyance until we met with the financial advisor a few months later to discuss what to do with the assets. It was agreed that my mother would pay for my sister’s spendings. This included £20,000 for a new second hand car, house renovations and other purchases. I really didn’t think much about this at the time. A couple of weeks ago my mother lost £10,000 in a push notification scam. I work as a fast food delivery driver and only found out about this when I paid one of my visits to mum after work to check up on her. As well as spending a number of hours trying to sort this out my mum was expressing concern about the payments she was making to my sister and the legitimacy of them. I contacted my sister to tell her that, because of the fraud, I was no longer happy with her trying to get my mum to make these large payments for items she had purchased. My mother was in a terrible state after the scam and I said it would be better if the gift was paid directly into my sister’s account. She suggested paying the remaining £40,000 into her husband’s account who she is separated from (!) I was now really concerned that if she was committing benefit fraud, we, as members of her family could be prosecuted for knowingly assisting her. I suggested that I could draft letters for her to send to the relevant agencies outlining the various gifts that she has received as per the requirement to inform of a change of circumstances. She seemed accepting of this. However, a couple of days later she texted me saying that her CAB friend had said that receiving gifts like this is acceptable and to inform the authorities of receiving them is would invite an investigation. She values his opinion as he is a senior member of the team. I am completely at my wits end. This has caused me no end of anxiety from the moment my sister mentioned it to me last year. I am worried about the criminal implications this might have on me and have said I no longer want anything more to do with it. My brother has told me to concentrate on my own life now and let my sister and mother deal with it as adults. However my mother is frail and distressed by the whole affair. Any advice gratefully received.

poppy12345

I found this rather difficult to read because of lack of paragraphs but i'll try to advise.

You were correct that the only benefit that's means tested here is Council tax reduction. Although for your mum if she ever needs to go into a care home then there could potentially be issues with her giving away such large amounts of money, not just to your sister but the whole family and it could be classed as deprivation of capital.

Is your mum state pension age? If so does she claim pension credit, Housing benefit or council tax reduction? If she does then these are means tested benefit. Savings of up to £10,000 are disregarded. There's a reduction in her means tested benefits for savings over that amount.

tacpot12

Your sister is intent on committing benefit fraud, and if she involves your mother there could be serious implications for your mother, yet your sister is prepared deal with this as an adult, so I suggest you report what you know to the DWP, explain your mother's frailty and the background of the scam, and hope that they take it easy on your mother. 

It might ruin your relationship with your sister, your brother and possibly your mother, but you have to decide if you want a relationship with people who are prepared to act dishonestly. If you do want a relationship with them, then I would suggest that you tell them now that you have changed your mind and won't do anything if they continue with their plans. I can't see that doing so will have any dire effects on you as there is no duty to report fraud to the DWP.

Concerned22

Thanks Poppy for your reply. You’ve made me realise it reads like a stream of consciousness! Apologies for that.

The issue of care was a hypothetical one as there is no indication at present that she would need to. However, I take your point that handing over large sums when that is on the horizon is deprivation of capital.

My mum is 80 and the only benefit she receives is attendance allowance.

poppy12345

Concerned22 said:

My mum is 80 and the only benefit she receives is attendance allowance.

Which isn't means tested. Is your sister actually claiming Council tax reduction or is she the only adult in the house and therefore is claiming just the single person discount? If it's just this then savings do not affect this and she would still be entitled to this discount regardless of savings/capital.

Concerned22

tacpot12 said:

Your sister is intent on committing benefit fraud, and if she involves your mother there could be serious implications for your mother, yet your sister is prepared deal with this as an adult, so I suggest you report what you know to the DWP, explain your mother's frailty and the background of the scam, and hope that they take it easy on your mother. 

It might ruin your relationship with your sister, your brother and possibly your mother, but you have to decide if you want a relationship with people who are prepared to act dishonestly. If you do want a relationship with them, then I would suggest that you tell them now that you have changed your mind and won't do anything if they continue with their plans. I can't see that doing so will have any dire effects on you as there is no duty to report fraud to the DWP.

Thanks for your reply Tacpot. I have already decided that I want nothing more to do with this. It is my mother who I am most concerned about.

If there is anyone out there who works for the DWP I’d be grateful for any input because, as Tacpot points out, this could rip our family apart.

poppy12345

Concerned22 said:

tacpot12 said:

Your sister is intent on committing benefit fraud, and if she involves your mother there could be serious implications for your mother, yet your sister is prepared deal with this as an adult, so I suggest you report what you know to the DWP, explain your mother's frailty and the background of the scam, and hope that they take it easy on your mother. 

It might ruin your relationship with your sister, your brother and possibly your mother, but you have to decide if you want a relationship with people who are prepared to act dishonestly. If you do want a relationship with them, then I would suggest that you tell them now that you have changed your mind and won't do anything if they continue with their plans. I can't see that doing so will have any dire effects on you as there is no duty to report fraud to the DWP.

If there is anyone out there who works for the DWP I’d be grateful for any input because, as Tacpot points out, this could rip our family apart.

Council tax reduction is claimed from a Local Authority, not from DWP. If benefit fraud is being commited then you should report this.

Concerned22

poppy12345 said:

Concerned22 said:

My mum is 80 and the only benefit she receives is attendance allowance.

Which isn't means tested. Is your sister actually claiming Council tax reduction or is she the only adult in the house and therefore is claiming just the single person discount? If it's just this then savings do not affect this and she would still be entitled to this discount regardless of savings/capital.

My mother lives in a retirement flat by herself. My sister lives elsewhere with her two teenage children who are under 16.

Concerned22

Concerned22 said:

poppy12345 said:

Concerned22 said:

My mum is 80 and the only benefit she receives is attendance allowance.

Which isn't means tested. Is your sister actually claiming Council tax reduction or is she the only adult in the house and therefore is claiming just the single person discount? If it's just this then savings do not affect this and she would still be entitled to this discount regardless of savings/capital.

My mother lives in a retirement flat by herself. My sister lives elsewhere with her two teenage daughters who are under 16.

My sister receives council tax reduction because of her income. I understand there is a savings threshold so she needs to declare it to the local council.

poppy12345

Then she could just be claiming the single person discount for council tax, which isn't means tested. Does she claim for any help with the rent? This would be means tested.

Concerned22

poppy12345 said:

Then she could just be claiming the single person discount for council tax, which isn't means tested. Does she claim for any help with the rent? This would be means tested.

My sister owns her house on which she pays a mortgage. She receives something called Council Tax Reduction (it used to be called Council Tax Benefit at one time). It is different from the Single Person Discount. There is a savings threshold of £8,000 in her local authority.

Yes, the DWP isn’t responsible for this. I have to ask myself though why she is going through all the trouble of diverting the funds when the only benefit she will lose is the Council Tax Reduction which only gives her a small discount in any case?