Will parents paying off my mortgage affect my benefits.

BradBourbon

Hi, due to illness of my partner, my parents will be paying off our mortgage. Will this affect our means tested Universal Credit? I understand PIP will not be effected.

marcia_

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

BradBourbon

marcia_ said:

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

Hi, they are giving the lump sum to us to pay off the total outstanding mortgage

marcia_

BradBourbon said:

marcia_ said:

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

Hi, they are giving the lump sum to us to pay off the total outstanding mortgage

 Then yes it might affect your benefits. It will need to be declared but I believe paying debts with savings are not penalised like with older benefits. So once paid your uc will be in payment 

NedS

marcia_ said:

BradBourbon said:

marcia_ said:

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

Hi, they are giving the lump sum to us to pay off the total outstanding mortgage

 Then yes it might affect your benefits. It will need to be declared but I believe paying debts with savings are not penalised like with older benefits. So once paid your uc will be in payment 

It will only affect UC if you have combined capital in your account(s) of over £6000 on the last day of your UC assessment period. If you receive the money from your parents, and use that money immediately to pay off your mortgage debt (which is allowed under UC regulations), and have less than £6000 in capital on the last day of your assessment period then there will be no affect on your UC.

Bigwheels1111

My dad paid 3k off my mortgage every year as part of my inheritance.
Did not affect my tax or anything else, As I never had the money in my hand or account.
Just get a cheque and pay it to your mortgage.

poppy12345

Bigwheels1111 said:

My dad paid 3k off my mortgage every year as part of my inheritance.
Did not affect my tax or anything else, As I never had the money in my hand or account.
Just get a cheque and pay it to your mortgage.

No need to do that for UC purposes because what counts is what savings you have on the last day of your assessment period.

xxxxxxxx

NedS said:

marcia_ said:

BradBourbon said:

marcia_ said:

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

Hi, they are giving the lump sum to us to pay off the total outstanding mortgage

 Then yes it might affect your benefits. It will need to be declared but I believe paying debts with savings are not penalised like with older benefits. So once paid your uc will be in payment 

It will only affect UC if you have combined capital in your account(s) of over £6000 on the last day of your UC assessment period. If you receive the money from your parents, and use that money immediately to pay off your mortgage debt (which is allowed under UC regulations), and have less than £6000 in capital on the last day of your assessment period then there will be no affect on your UC.

Do you know the specific regulation?  

As far as I know the rules on deprivation of capital have not changed. It depends what your reason for spending the money is. if you spend it so as not to lose any benefit or to gain more benefit then it is deprivation.    If that is not your motive then it is not deprivation.  

OP,  to be on the safe side, if you just ask your mortgage lender will they accept a cheque or debit card payment directly from your parent's account.  Then do it that way and the money does not have to go into your account at all.

Robbie64

The above suggestion - getting your parents to pay the money directly to the mortgage lender - is by far the best idea as there will be no worries about what to declare as there won't be anything to declare and no record of a large sum of cash going in and out of your bank account, even if it is just for a few hours.

KxMx

xxxxxxxx said:

NedS said:

marcia_ said:

BradBourbon said:

marcia_ said:

 Are they paying directly? Giving you the monthly payment or giving you a lump sum to pay it all? 

Hi, they are giving the lump sum to us to pay off the total outstanding mortgage

 Then yes it might affect your benefits. It will need to be declared but I believe paying debts with savings are not penalised like with older benefits. So once paid your uc will be in payment 

It will only affect UC if you have combined capital in your account(s) of over £6000 on the last day of your UC assessment period. If you receive the money from your parents, and use that money immediately to pay off your mortgage debt (which is allowed under UC regulations), and have less than £6000 in capital on the last day of your assessment period then there will be no affect on your UC.

Do you know the specific regulation?  

As far as I know the rules on deprivation of capital have not changed. It depends what your reason for spending the money is. if you spend it so as not to lose any benefit or to gain more benefit then it is deprivation.    If that is not your motive then it is not deprivation.  

OP,  to be on the safe side, if you just ask your mortgage lender will they accept a cheque or debit card payment directly from your parent's account.  Then do it that way and the money does not have to go into your account at all.

UC has different rules compared to legacy means tested benefits, using money to pay off debt is in general allowed under UC and the claimant not penalised as they would likely be on legacy benefits. 

calcotti

xxxxxxxx said:

As far as I know the rules on deprivation of capital have not changed. It depends what your reason for spending the money is. if you spend it so as not to lose any benefit or to gain more benefit then it is deprivation.   

UC Regulations 2013 regulation 50(2)
https://www.legislation.gov.uk/uksi/2013/376/regulation/50
Paying off debt is never treated as deprivation of capital.