ESA, inheritance, responsibilities between claims, moving home.

edited 25 January at 10:47AM in Benefits & tax credits
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ReigncoteReigncote Forumite
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edited 25 January at 10:47AM in Benefits & tax credits

Hi,
I'm currently receiving income based ESA, and I am due to receive an inheritance of approx £40k. I understand the amount will end my entitlement to benefits, and I will need to use the money for living expenses. But, my mental health condition will probably mean that I am likely to need benefits after the inheritance is exhausted. However, I need to move from my current home, and I would like to use some of the money for achieving this goal.

But, I would also like to avoid excluding myself from any later qualification for benefits due to moving home. I assume there could be a measure of reasonable spending of the inheritance, or a period of expiration - in which spent capital is no longer weighed against a new claim. I'm also aware of capital in the form of property (occupied as the home) being disregarded from a claim; as is the case for my current home.

In simple terms, how much, if any, of the inheritance is reasonable for moving, without excluding myself from any future benefit claims? or, should I expect a deprivation of capital investigation (regardless of how the inheritance is used) following any future claim?

Also, I assume the DWP will not advise me before I act, but should I decide to use some of the funds for a new home, later make a claim, and subsequently the DWP decide against my use of the money for a property - would I be denied a claim until the capital was released from the property?

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  • Spoonie_TurtleSpoonie_Turtle Forumite
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    If your current ESA claim is fully income-based, none of it contributions-based, you would not be able to reclaim ESA.  You would have to claim Universal Credit once you no longer have savings above £16,000.

    There is no definition for time or amounts.  The key is 'reasonable expenditure' in the specific situation, AND a motivating factor to increase/enable entitlement to benefits.

    If you use a chunk of your inheritance towards moving house, it will come down to why you're moving and whether the expenses occurred are reasonable - it will help if you have evidence that you *need* to move, not just for the sake of it or to a house bigger than you reasonably need.  Also if you needed to replace furniture, appliances, etc., document the condition of the old ones (to show replacement was reasonable) and as long as you're not replacing with unnecessarily expensive, top-of-the-line with bells and whistles* versions you should be fine.  Same with any decorating or refurbishment needed, document the before so you have proof.  And keep receipts to show ecactly how it was spent.

    (*Although if there is a feature you need on an appliance or piece of furniture that makes it more expensive, needing it makes it a reasonable expense.  Thinking here particularly of features that make things more accessible that nondisabled people - including most Decision Makers - might not normally think of as accessibility features.)

    If you were refused a claim on the basis of having deprived yourself of that capital and thus still being considered to have it, you would have to apply at a later date when it would be considered reasonable to have used it for general living expenses.  I'm not sure how they work that out. 

    Making you release capital from the property would not make any sense, because then you'd actually have the capital and still be over the threshold to claim.

    [I'm not sure if that helps or whether there's bits I've missed, sorry, brain's gone now.  Others here will be able to help too.]
  • ReigncoteReigncote Forumite
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    Thanks for the comprehensive reply. Providing evidence for my actions is particularly interesting, and specifically providing a "need" to move. I have been trying to move for 7 years because of problem neighbours, but there has been delays and interruptions for many reasons. The DWP was informed about this 5 years ago, so it is on record, but how I provide evidence of my "need" is a difficult one... or to put it another way - how I present an argument against the presumption that I'm moving to a slightly more expensive home and therefore depriving myself of capital - in order to claim benefits earlier than necessary.
  • edited 24 January at 10:47PM
    MuttleythefrogMuttleythefrog Forumite
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    edited 24 January at 10:47PM
    I think if you sold your property and used the proceeds along with excess savings (inheritance) to buy a more expensive property then that would not be considered deprivation and your new home would then be disregarded as per normal.

    Can anyone clarify or correct me?
    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
  • edited 24 January at 11:13PM
    Spoonie_TurtleSpoonie_Turtle Forumite
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    edited 24 January at 11:13PM
    Reigncote said:
    Thanks for the comprehensive reply. Providing evidence for my actions is particularly interesting, and specifically providing a "need" to move. I have been trying to move for 7 years because of problem neighbours, but there has been delays and interruptions for many reasons. The DWP was informed about this 5 years ago, so it is on record, but how I provide evidence of my "need" is a difficult one... or to put it another way - how I present an argument against the presumption that I'm moving to a slightly more expensive home and therefore depriving myself of capital - in order to claim benefits earlier than necessary.
    Any evidence of your continued attempts to move over the years should definitely prove you're not just using your inheritance for the sake of it :)  

    Ultimately the onus is on DWP to prove that a motivating factor in using the capital is to increase/enable benefit entitlement.  So use what you need to be able to move house, evidence where it's gone, and as long as it's not excessive for your situation (like hiring a chauffeur-driven limousine for shuttle runs to move your stuff rather than just a moving van!  An outlandish example, but you get the idea) you should be fine.

    Edit: and specifically re: needing to move, again it comes down to what's reasonable.  Having awful neighbours is a very common reason for moving, it would be a harsh decision maker to decide that someone claiming benefits shouldn't be allowed to do that.  And, which I forgot to mention before, if the decision were to go against you it is a decision that can be appealed.
  • ReigncoteReigncote Forumite
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    I think if you sold your property and used the proceeds along with excess savings (inheritance) to buy a more expensive property then that would not be considered deprivation and your new home would then be disregarded as per normal.

    Can anyone clarify or correct me?

    Thanks for the reply. That gives me hope that it's a realistic possibility.
  • edited 25 January at 4:56PM
    MuttleythefrogMuttleythefrog Forumite
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    edited 25 January at 4:56PM
    Reigncote said:
    I think if you sold your property and used the proceeds along with excess savings (inheritance) to buy a more expensive property then that would not be considered deprivation and your new home would then be disregarded as per normal.

    Can anyone clarify or correct me?

    Thanks for the reply. That gives me hope that it's a realistic possibility.
    With any luck someone will clarify... something I may consider myself in future if it is an option for disposing of capital without them considering it deprivation. I'm trying to locate a thread which dealt with the matter not so long ago but no success so far. Until clarified I would take the view it could be considered deprivation and fall along the lines of advice regarding DM discretion above discussed by Spoonie. 
    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
  • ReigncoteReigncote Forumite
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    Reigncote said:
    Thanks for the comprehensive reply. Providing evidence for my actions is particularly interesting, and specifically providing a "need" to move. I have been trying to move for 7 years because of problem neighbours, but there has been delays and interruptions for many reasons. The DWP was informed about this 5 years ago, so it is on record, but how I provide evidence of my "need" is a difficult one... or to put it another way - how I present an argument against the presumption that I'm moving to a slightly more expensive home and therefore depriving myself of capital - in order to claim benefits earlier than necessary.
    Any evidence of your continued attempts to move over the years should definitely prove you're not just using your inheritance for the sake of it :)  

    Ultimately the onus is on DWP to prove that a motivating factor in using the capital is to increase/enable benefit entitlement.  So use what you need to be able to move house, evidence where it's gone, and as long as it's not excessive for your situation (like hiring a chauffeur-driven limousine for shuttle runs to move your stuff rather than just a moving van!  An outlandish example, but you get the idea) you should be fine.

    Edit: and specifically re: needing to move, again it comes down to what's reasonable.  Having awful neighbours is a very common reason for moving, it would be a harsh decision maker to decide that someone claiming benefits shouldn't be allowed to do that.  And, which I forgot to mention before, if the decision were to go against you it is a decision that can be appealed.

    Thanks, you are reminding me that the DWP is (in principle) benevolent and reasonable. And there are as you say appeals and tribunals. I suppose the issue is in some respect a matter of confidence and perseverance... and clear evidence or argument.

    The DWP already knows about the inheritance and have loosely disregarded the trust in which it is held. However, my direct receipt of the funds could overrule this. I suppose it is reasonable for them to consider my intended use/need, rather than be informed of the receipt of an arbitrary lump sum with an expectation on my part to continue receiving benefits. The resulting requests would be the same - capital and potential benefits, but the context would differ. It is an open question, as to their perspective on context.


  • GhibliFanGhibliFan Forumite
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    Is your GP aware that nuisance neighbours are potentially affecting your mental health? If they are, they could provide a letter in the event of the DWP making enquiries in the future. If not, make them aware asap.

    Best of luck.
  • ReigncoteReigncote Forumite
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    Reigncote said:
    I think if you sold your property and used the proceeds along with excess savings (inheritance) to buy a more expensive property then that would not be considered deprivation and your new home would then be disregarded as per normal.

    Can anyone clarify or correct me?

    Thanks for the reply. That gives me hope that it's a realistic possibility.
    With any luck someone will clarify... something I may consider myself in future if it is an option for disposing of capital without them considering it deprivation. I'm trying to locate a thread which dealt with the matter not so long ago but no success so far. Until clarified I would take the view it could be considered deprivation and fall along the lines of advice regarding DM discretion above discussed by Spoonie. 

    I've just checked the capital rules in the DWP's Decision maker's guide, and should deprivation be an issue then the rule of diminishing capital would also apply. This would mean that for every x amount of pounds spent and considered as deprivation, the same amount would eventually diminish to zero (in relation to a claim) - by subtracting every week (from the capital) the amount of benefit a claimant would be entitled to every week had they not deprived themselves of capital. Therefore it's possible to calculate the living costs needed to offset a deprivation decision. For example, if a claimant illegitimately spent £1k of capital and was otherwise entitled to £100 a week in benefits, the capital spent would be disregarded after 10 weeks.

    To avoid deprivation, the decision on reasonable expenditure becomes relevant again. I think the DWP doesn't advise claimants in advance, so it's difficult to known how to proceed.



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