Inheritance whilst on benefits - what is 'reasonable' spending?

Spoonie_Turtle

peteuk said:

So she now has £30K in her bank…

She is over the threshold of £16K for UC, unless she spends £14K reasonably before the end of her assessment period then her UC will stop.

Is her HB part of her UC? If it is separate then the question is is it means tested, if so then again above the £16K in savings/capital then it will stop.

As you know PIP is not means tested and so will not stop.

…

Question for the wider audience, does the disability effect the saving threshold?

Housing Benefit is always means-tested.  But unless someone lives in supported or temporary accommodation (OP says the friend lives in a council house) then it'll be UC anyway.

Disability makes no difference to the savings threshold.


To the OP: your friend's background certainly makes it sound like she'll use the money wisely.  She should not be terrified to live comfortably though!  And it's unlikely her idea of 'comfortable' will be anything extravagant.

Also if she has any debts she can pay those off without any benefits repercussions.

sheramber

I would expect a holiday is reasonable as long as it is not a luxury cruise.

Once her benefits are stopped would anybody  be interested in her spending until  her savings have dropped low enough that she needs to claim UC again?

Once she is claiming again her spending  would again be liable to scrutiny.

Kim_13

It’s fairly standard for 6 months of bank statements to be asked for, isn’t it? So if any spending were to be closely scrutinised, it would likely be in the 6 months leading up to a new claim for UC. Once she has any one off purchases out of the way, she’ll be able to estimate how much the capital is decreasing by month and when it is likely she’d need to submit a new claim.

 

Jyana

Kim_13 said:

It’s fairly standard for 6 months of bank statements to be asked for, isn’t it? So if any spending were to be closely scrutinised, it would likely be in the 6 months leading up to a new claim for UC. Once she has any one off purchases out of the way, she’ll be able to estimate how much the capital is decreasing by month and when it is likely she’d need to submit a new claim.

 

It would depend on what they have done with the claim. During my inheritence a few years back they didn't close my claim down, just kept it at a nil payment so that NI credits were still paid. Then once my savings were down to around £10k I had to provide bank statements for the whole period, and receipts for large purchases.

Tuesday

Jyana said:

Kim_13 said:

It’s fairly standard for 6 months of bank statements to be asked for, isn’t it? So if any spending were to be closely scrutinised, it would likely be in the 6 months leading up to a new claim for UC. Once she has any one off purchases out of the way, she’ll be able to estimate how much the capital is decreasing by month and when it is likely she’d need to submit a new claim.

 

It would depend on what they have done with the claim. During my inheritence a few years back they didn't close my claim down, just kept it at a nil payment so that NI credits were still paid. Then once my savings were down to around £10k I had to provide bank statements for the whole period, and receipts for large purchases.

Thanks. That's what she needs to know. I will suggest to her that she asks the question about NI credits. She's set to lose £1,200 a month in UC, Housing Benefit and Council Tax Credit so it won't take long for her capital to diminish.

Jyana

Tuesday said:

Jyana said:

Kim_13 said:

It’s fairly standard for 6 months of bank statements to be asked for, isn’t it? So if any spending were to be closely scrutinised, it would likely be in the 6 months leading up to a new claim for UC. Once she has any one off purchases out of the way, she’ll be able to estimate how much the capital is decreasing by month and when it is likely she’d need to submit a new claim.

 

It would depend on what they have done with the claim. During my inheritence a few years back they didn't close my claim down, just kept it at a nil payment so that NI credits were still paid. Then once my savings were down to around £10k I had to provide bank statements for the whole period, and receipts for large purchases.

Thanks. That's what she needs to know. I will suggest to her that she asks the question about NI credits. She's set to lose £1,200 a month in UC, Housing Benefit and Council Tax Credit so it won't take long for her capital to diminish.

I am on ESA, so they may do it differently for UC, but I definitely would enquire due to the NI credit angle. It's something that needs covering still. 

I kept a little exel chart with my totals to make it easy for them (and me) to see where money went, with running totals for rent, council tax, holiday, phone line rental and other bills, etc. Then sent that along with my statements and receipts.

Things I bought were an oven, as I had gone without owning one for several years in my current home, a fridge because I had a third-hand one which leaked, and carpets as again my council place didn't have any and I had been doing without for a few years. I spent about £300 on a holiday I think, and also bought myself a new, cheapish, computer as a treat. None of those things were questioned, though my Housing Association did confirm the first three for me and I had to provide receipts for all.

Spoonie_Turtle

On UC they keep claims open for up to six months if it's a nil award due to earnings.  But I would think being definitively ineligible would close the award straight away - however as she should be getting NI credits if not paying NI contributions through work anyway (NI credits if wages are above £123 per week, paying contributions if wages above £242 per week) then it shouldn't matter.

sheramber

How old is her child?  She will get NI credits until the child is 12.

Tuesday

Thanks to everyone who has responded. She's now had a meeting with the DWP and been told that her UC has been terminated and she should reapply when she has £16,000 left. He said she should keep receipts for any large purchases and they could investigate if it was thought she'd got through the money too quickly. She earns enough to receive NI credits anyway so she doesn't need to worry about that.