Receiving an unexpected lump sum, and what to do to save my current claim?

[Deleted User]

Last year one of my sisters sadly died. Initially she had no money, no will and me and my other sister had to arrange the funeral and everything between us -- I claimed expenses, and my surviving sister paid the rest.

My late sister was unwell, an on PIP and various other benefits.

Because of a change in the PIP rules regarding social support, she has been posthumously awarded a substantial back payment -- I have been told this will be paid straight into my bank account, as I was the named point of contact. 

I plan to share this money equally with my other sibling, as this seems like the fair thing to do.


So, here's the dilemma -- this payment will take me over the savings threshold for ESA -- I am in receipt of ESA and PIP for mental health, and as such I value the security it gives me.


Even if I give half the money to my other sister -- as there was no will, my fear is that this will not be accepted, and that the capital will be regarded as mine regardless.

Even if it does not, the remaining money will still reduce my benefits for a while -- which is more acceptable.

So, my questions..

What happens if the money is spent immediately, but not on frivolities? For example, payment of debts, much need home repairs and a private medical procedure for myself, that the NHS won't cover?

Like, how long do they expect you to make the money last for?


While I'm grateful for this windfall -- my biggest fear is that my claim gets closed and I need to start the entire process again with a new claim in the future. 


Any advice will be appreciated thank you.

calcotti

What type of ESA do you get? New style ESA, contribution based ESA, income based ESA or a mix of contribution based and income based ESA?

UncertainTea said:

Even if I give half the money to my other sister -- as there was no will, my fear is that this will not be accepted, and that the capital will be regarded as mine regardless.

I don't think DWP can argue with you splitting the money with your sister. There are rules about the division of an estate in the absence of a will. You can check the rules here
https://www.gov.uk/inherits-someone-dies-without-will
If your sister had no surviving spouse, civil partner, children or parents then I think the estate falls to be split between her siblings. If that is correct you are therefore required by law to split the funds.

In respect of spending the money you retain each case is considered by Decision Maker so there are no hard and fast answers, however to be deprivation of capital the DWP have to believe that retention of benefits was significant part of the decision to spend money. Paying for medical procedures you cannot get on the NHS would, to me, seem a good reason to spend money.

poppy12345

Backdated money is disregarded for 1 year for means tested benefits so if your sister was still here then this would apply to her. Sadly, she is no longer here and because you're point of contact then the money goes to you, then i would think that the same rules apply. After all, if the law had been applied correctly then she would have been awarded the correct amount of PIP and the money would have likely been spent to make her life even easier.

When money is disregarded it's entirely up to you what you spend the money on and this includes sharing it with your sibling/s.

The decision letter may tell you if it's disregarded and for how long. If it's over £5,000 and an offical error then it can be disregarded for longer.

I'm sure others will comment and give their opinions too.

[Deleted User]

calcotti said:

What type of ESA do you get? New style ESA, contribution based ESA, income based ESA or a mix of contribution based and income based ESA?

UncertainTea said:

Even if I give half the money to my other sister -- as there was no will, my fear is that this will not be accepted, and that the capital will be regarded as mine regardless.

I get the older type. I think I'm in the support group as I don't need to attend any interviews.

calcotti

poppy12345 said:..Sadly, she is no longer here and because you're point of contact then the money goes to you, then i would think that the same rules apply. 

I don't think so. I can't see how a benefit disregard can apply to inherited money.

calcotti

UncertainTea said:

calcotti said:

What type of ESA do you get? New style ESA, contribution based ESA, income based ESA or a mix of contribution based and income based ESA?

UncertainTea said:

Even if I give half the money to my other sister -- as there was no will, my fear is that this will not be accepted, and that the capital will be regarded as mine regardless.

I get the older type. I think I'm in the support group as I don't need to attend any interviews.

The older type can be contribution based ESA, income based ESA or a mix of contribution based and income based ESA. The possible impact on your ESA depends on how your ESA is made up. Only an income based part can be affected by capital.

poppy12345

calcotti said:

poppy12345 said:..Sadly, she is no longer here and because you're point of contact then the money goes to you, then i would think that the same rules apply. 

I don't think so. I can't see how a benefit disregard can apply to inherited money.

Thanks. It's a sad situation because if the sister had benefited from this money there may not have been anything left to inherit.

[Deleted User]

calcotti said:

UncertainTea said:

calcotti said:

What type of ESA do you get? New style ESA, contribution based ESA, income based ESA or a mix of contribution based and income based ESA?

UncertainTea said:

Even if I give half the money to my other sister -- as there was no will, my fear is that this will not be accepted, and that the capital will be regarded as mine regardless.

I get the older type. I think I'm in the support group as I don't need to attend any interviews.

The older type can be contribution based ESA, income based ESA or a mix of contribution based and income based ESA. The possible impact on your ESA depends on how your ESA is made up. Only an income based part can be affected by capital.

Ah OK, it's income based. Nothing to do with previous tax contributions

TELLIT01

Contact ESA as soon as possible and provide as much information as possible to enable the Decision Maker to make a ruling.  I agree with calcotti that this money should be divided equally between you and your sister as there was no will and you two are therefore the beneficiaries.  That said, I'm not the DM but any I worked with did tend to use logic and common sense in coming to their decision.  You cannot simple clear all debts on ESA so be careful there. 

[Deleted User]

poppy12345 said:

it's entirely up to you what you spend the money on and this includes sharing it with your sibling/s.

This is where I'm uncertain.

I'm sure that, come interview time, if I tell them I cleared debts it'll be more favourable than telling them it all went on a holiday.

There doesn't seem to be a clear rule on how long money is supposed to last -- like, if you have £16001 in your account for an hour, and spend £2 to take you below the threshold -- will they tell you it's time for a new claim?

In my case, after paying my other sister, I'll end up with about £8500 -- I could theoretically take it below £6000 in an afternoon, just by clearing some nagging debts, so I'll only be over the threshold for a couple of hours. 🤔

calcotti

To be clear I don't think you are sharing your money with your sister.

You have received the money but, under the rules of intestacy, it appears that you are required to divide the money between you and your sister. Although the money is legally yours while in your account you are not the beneficial owner of that part of the money that belongs to your sister. As such that money does not fall to be counted as yours for benefits purposes.

I would pass the money to your sister asap and report everything to DWP so that they are fully informed.

UncertainTea said: There doesn't seem to be a clear rule on how long money is supposed to last -- like, if you have £16001 in your account for an hour, and spend £2 to take you below the threshold -- will they tell you it's time for a new claim?

In my case, after paying my other sister, I'll end up with about £8500 -- I could theoretically take it below £6000 in an afternoon, just by clearing some nagging debts, so I'll only be over the threshold for a couple of hours. 🤔

In that situation I would pay down the debt anyway. You would say to DWP that you have taken the opportunity to pay down debt which you know you will not otherwise be able to do. You'll likely be better off not having to service the debt even if DWP end up treating you as if you still have the £2,500. (£2,500 would result in a deduction of £10/week from your ESA.)