ESA & Inheritance Question

RedWorry

I am aware if you have savings over £16,000 ESA stops.

I have been in receipt of Incapacity Benefit then onto ESA for more than 15 years and my current savings are less than £3000.

However, I am going to be left £15,000 in life insurance from a parent, whose currently unwell, alongside around £5000 from their bank, so this will be declared to the DWP, when it happens. 

Will the DWP close my ESA claim completely when I come into this money, or leave the claim open for when the money is used and goes to less than £16,000, as whilst I have no issue of losing ESA when I have savings I am worried about having to reapply for ESA again or rather Universal Credit. I am also aware Housing Benefit and Council Tax Benefit will stop with over £16,000 in savings.

I would like to replace my bathroom and kitchen, alternately I could pay off my car PCP, and some will probably go towards funeral costs for my parent, and I would very much like to pay for my own funeral as well as plan it as I have no family to do this.

Does anyone know how the DWP deal with things like this.

I am aware of the deprivation of capital rule but feel replacing my bathroom for a more accessible one as well as my kitchen is not deprivation of capital.

sammyjammy

You need to check what ESA you receive, as you were previously on Incapacity benefit it would imply your ESA is contribution based not income based, if this is the case then the monies you receive will not impact your benefits at all, check your most recent letter that states what you receive and how it is made up.

TELLIT01

It's possible that the OP has an Income Related element to their ESA.  If so that would stop but it wouldn't affect the base Contributions based element.

Jyana

Antidotal experience. I had been in the WRAG for over 12 months when I received an inheritance several years ago, so was fully income based at the time. My claim didn't end, the payment just went to nil payment as NI Credits are still claimable in most cases like this.

When my savings dropped down I went to reclaim, which is when they decided it had been too long since my last assessment and I got moved to the SG. Before payments restarted they wanted to see receipts for all big purchases (some white goods, laptop, holiday were all not questioned), though some stuff was second hand or bargain hunted and I had to rely on things like my Housing Association confirming that some rooms in my house were previously uncarpeted and now were, etc. They also wanted copies of all bank statements.

I asked them a couple of times if certain things would be allowed - the laptop and giving some of the money away to other family who were missed out the will being old/out of date - they refused to answer and said only a Decision Maker can answer that and they won't look at the case until you reapply after the savings drop down. Frustrating lol. I risked the laptop and it was okay, and we worked out other stuff for the rest of the family instead as I'm certain it would be depreciation. 

RedWorry

sammyjammy said:

You need to check what ESA you receive, as you were previously on Incapacity benefit it would imply your ESA is contribution based not income based, if this is the case then the monies you receive will not impact your benefits at all, check your most recent letter that states what you receive and how it is made up.

I believe I am in receipt of both income and contribution based, but the the contribution based is very small now, the letters they send do not actually break it down.

RedWorry

@ Jyana 

Thanks for sharing your experiences. I believe replacing my bathroom for a wet room would be justified as I’ve been waiting to move to somewhere more suitable for a long time and am now in the process of applying for a wet room through the DFG process which is just taking forever, the same with my kitchen it’s just no longer practical for my disability needs with inaccessible cupboards etc. Of course I am aware of the importance of keeping all the receipts etc.

poppy12345

RedWorry said:

sammyjammy said:

You need to check what ESA you receive, as you were previously on Incapacity benefit it would imply your ESA is contribution based not income based, if this is the case then the monies you receive will not impact your benefits at all, check your most recent letter that states what you receive and how it is made up.

I believe I am in receipt of both income and contribution based, but the the contribution based is very small now, 

That doesn't make sense. If part of it is contributions based then that should make up the majority of your ESA amount. ESA Support Group contributions based is £129.50/week. Anything over that would be the income related top up, if part of it is CB. 

I agree that ESA letters are extremely difficult to understand and most of the time they make no sense at all. 

The best thing to do is contact ESA and ask them if any part of it is contributions based, if it is they will tell you. If part of it is income related you will need to report the changes once the money goes into your bank and if it takes your capital to more than £16,000 then all means tested benefits will end. 

Do also be aware that if you're claiming council tax reduction then some local Authorities have a maximum savings limit of £6,000 before entitlement ends. Changes need to be reported to them too. 

8dayweek

The issue is more likely going to be Housing Benefit - this will end with Capital over 16k and cannot be reignited if and when you drop below again (even though you could get the income-related top up back on the ESA). 

RedWorry

8dayweek said:

The issue is more likely going to be Housing Benefit - this will end with Capital over 16k and cannot be reignited if and when you drop below again (even though you could get the income-related top up back on the ESA). 

So, I can’t claim Housing Benefit when I have less than. £16,000. I understand it stops with over £16,000 but surely you can reclaim when you have less than £16,000.

My recent updating letter for 2024 says the following:

Your Living Expenses £84.80

Extra Money Because You Are Severely Disabled £76.40

Extra Money Because You Are A Carer £42.75

Extra Money Because Of The Disability Income Guarantee £19:55

Extra Money Support Group £44.70

Total Income Related Amount £268.20

Therefore I assume I am only in receipt of Income Related ESA

Probably the best thing I can do is pay off my car PCP finance so I owe the vehicle as I am unlikely to be able to afford the payments in full when my relative is not here as they pay for half the cost. I do not think that can be classed as deprivation of capital.

kaMelo

RedWorry said:

8dayweek said:

The issue is more likely going to be Housing Benefit - this will end with Capital over 16k and cannot be reignited if and when you drop below again (even though you could get the income-related top up back on the ESA). 

So, I can’t claim Housing Benefit when I have less than. £16,000. I understand it stops with over £16,000 but surely you can reclaim when you have less than £16,000.

Bar limited exceptions (living in supported housing or being of pension age) once a housing benefit claim closes you cannot reclaim. Any help with housing would need to be claimed through UC.

RedWorry said:

8dayweek said:

The issue is more likely going to be Housing Benefit - this will end with Capital over 16k and cannot be reignited if and when you drop below again (even though you could get the income-related top up back on the ESA). 

Probably the best thing I can do is pay off my car PCP finance so I owe the vehicle as I am unlikely to be able to afford the payments in full when my relative is not here as they pay for half the cost. I do not think that can be classed as deprivation of capital.

Unfortunately paying off a debt that is not immediately due can be classed as deprivation of capital under legacy benefit rules.  Replacing a kitchen and/or bathroom it's impossible to say how that would be viewed but paying for a funeral plan for yourself should be okay.  In all circumstances though it would be down to a decision maker.

poppy12345

RedWorry said:

8dayweek said:

The issue is more likely going to be Housing Benefit - this will end with Capital over 16k and cannot be reignited if and when you drop below again (even though you could get the income-related top up back on the ESA). 

So, I can’t claim Housing Benefit when I have less than. £16,000. I understand it stops with over £16,000 but surely you can reclaim when you have less than £16,000.

My recent updating letter for 2024 says the following:

Your Living Expenses £84.80

Extra Money Because You Are Severely Disabled £76.40

Extra Money Because You Are A Carer £42.75

Extra Money Because Of The Disability Income Guarantee £19:55

Extra Money Support Group £44.70

Total Income Related Amount £268.20

Therefore I assume I am only in receipt of Income Related ESA

Probably the best thing I can do is pay off my car PCP finance so I owe the vehicle as I am unlikely to be able to afford the payments in full when my relative is not here as they pay for half the cost. I do not think that can be classed as deprivation of capital.

Yes, housing benefit can continue if you have capital of less than £16,000 but there will be a deduction of £1/week for every £250 or part thereof over £6,000. As your capital will be more than £16,000 then entitlement to all means tested benefits will end. 

Once the money goes into your bank you will need to report the changes to your local Authority and ESA. If part of your ESA is contributions based then this will continue. (£129.50/week) I suspect it is because I note that you're a carer because of the carers premium. You have an underlying entitlement to carers allowance because of your CB ESA but you're not actually receiving carers allowance because it's an over lapping benefit. 

Once your money goes below £16,000 I'd advise you to ring ESA to ask to be reassessed for the Income Related top up before you claim UC. If your circumstances haven't changed at that point then your ESA will include the SDP again but you will need to reclaim it. 

Once the SDP is in payment you can then claim UC and your UC will include the SDP Transitional element. Once you claim it your Income Related ESA will end after 2 weeks.