Gifting money while on UC

peteuk

HillStreetBlues said:

tomtom256 said:

As a one off it wouldn't be an issue, but if was regularly done to stay below £6,000 then it could become a problem and may get flagged via datamatching.

A person can do it as many times as  they want, there is nothing in law that would prevent this.
It is possible that the DWP could ask where the money has gone, just in case a person is hiding it under their floorboards, but if the DWP believe that, the onus is on the to proof it.

The question is how far back do they look? So for instance if someone gave away £4K in 2019 and then £3K in 2023 would they then say well actually had you not gifted those amounts then you'd have £7K.

Totally different from having £7K and gift £2K to get back under the £6K limit…

HillStreetBlues

peteuk said:

HillStreetBlues said:

tomtom256 said:

As a one off it wouldn't be an issue, but if was regularly done to stay below £6,000 then it could become a problem and may get flagged via datamatching.

A person can do it as many times as  they want, there is nothing in law that would prevent this.
It is possible that the DWP could ask where the money has gone, just in case a person is hiding it under their floorboards, but if the DWP believe that, the onus is on the to proof it.

The question is how far back do they look? So for instance if someone gave away £4K in 2019 and then £3K in 2023 would they then say well actually had you not gifted those amounts then you'd have £7K.

It's never about what you would have had, it's only about what you do/did have.

Kim_13

Wouldn’t they also consider whether it was reasonably foreseeable that you would otherwise soon go above £6K when you made the gift? If you give the gift and then win £5,000 on the Premium Bonds (I imagine that many in receipt of benefits might well have a small amount in in the hope of winning big and no longer needing to be dependent upon the state; I know someone on PC who does) that’s very different to giving the gift and knowing that you will soon inherit £5,000 because it was left in trust for you until the age of x. 

If there’s any chance you’d soon hit £6K, it might be worthwhile getting a loan agreement. At least then you’d be able to argue that you hadn’t deprived yourself of the capital. If you didn’t need to collect the payments that would be up to you but at least something would be in place to protect you.

HillStreetBlues

Kim_13 said:

Wouldn’t they also consider whether it was reasonably foreseeable that you would otherwise soon go above £6K when you made the gift?

There is no basis in law as yet on what might happen. A person can do whatever they want to money if under £6k. There will be people who will just spend or give away money to keep under £6k.
AFAIK it's the same with inheritance, the money isn't yours till it's paid so same principle.
I think a trust is different, as the money in the trust has been paid. The money belongs to that person but is disregarded, so it they had £5k and another £5K in trust the person has £10K, but £5k disregarded, Disregarded money can still to liable for DoC. So it's possible it that person gave away £5k when entitled to the  trust, would be treated as having £10k 
 

KB32

So it has been over a week and still no reply from them on my journal, now I'm worried they might be investigating something before they get back to me 

HillStreetBlues

KB32 said:

So it has been over a week and still no reply from them on my journal, now I'm worried they might be investigating something before they get back to me 

What wording did you use? a wondering if they don't think it needs a reply.

tomtom256

Shelter sum it up quite nicely and although it reference UC, it would be hte same for all means tested benefits https://england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules

Deprivation of capital and notional capital

Claimants can be treated as having capital that they have deprived themselves of with the intention of becoming entitled to universal credit or increasing entitlement.

Deprivation can mean that someone has purposely spent or given away their capital, or failed to acquire it. The DWP must show that the claimant's significant purpose was to become entitled to universal credit or increase their entitlement, even if it was not their main purpose. For example, the main purpose of someone giving their capital away to a relative might be to benefit the relative, but a significant purpose could also be to reduce their capital so that they are entitled to universal credit.

Claimants have not deprived themselves of capital when it has been used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

HillStreetBlues

tomtom256 said:

Shelter sum it up quite nicely and although it reference UC, it would be hte same for all means tested benefits https://england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules

Deprivation of capital and notional capital

Claimants can be treated as having capital that they have deprived themselves of with the intention of becoming entitled to universal credit or increasing entitlement.

Deprivation can mean that someone has purposely spent or given away their capital, or failed to acquire it. The DWP must show that the claimant's significant purpose was to become entitled to universal credit or increase their entitlement, even if it was not their main purpose. For example, the main purpose of someone giving their capital away to a relative might be to benefit the relative, but a significant purpose could also be to reduce their capital so that they are entitled to universal credit.

Claimants have not deprived themselves of capital when it has been used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

There are different rules when it comes to paying off a debt, where it applies to UC it might not apply to  ESA.

KB32

tomtom256 said:

Shelter sum it up quite nicely and although it reference UC, it would be hte same for all means tested benefits https://england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules

Deprivation of capital and notional capital

Claimants can be treated as having capital that they have deprived themselves of with the intention of becoming entitled to universal credit or increasing entitlement.

Deprivation can mean that someone has purposely spent or given away their capital, or failed to acquire it. The DWP must show that the claimant's significant purpose was to become entitled to universal credit or increase their entitlement, even if it was not their main purpose. For example, the main purpose of someone giving their capital away to a relative might be to benefit the relative, but a significant purpose could also be to reduce their capital so that they are entitled to universal credit.

Claimants have not deprived themselves of capital when it has been used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

Hmm so it could be an issue in my case, it really is as clear as mud. I bet some people get away with it and others don't 

KB32

HillStreetBlues said:

KB32 said:

So it has been over a week and still no reply from them on my journal, now I'm worried they might be investigating something before they get back to me 

What wording did you use? a wondering if they don't think it needs a reply.

I basically just said I have gifted this money to a relative and since it was such a large amount I was advised I need to inform them, also asked if it had any effect on my UC payments. No response at all so far over a week on.