Universal Credit & inheritance

mOunsNN6KL

I wonder if someone could help me. 

I will soon inherit over £20,000 from my grandad passing away and am uncertain about the best approach to managing it with regards to Universal Credit.

What are my options? the money will be likely to one day buying a house however i'm not sure i'll be able to afford this at the moment. I do owe quite a large of amount of money to my familyfriends who've helped me in the past. But i've seen online that UC doesn't always look too fondly about moving the money on quickly? I can see the limit for Universal Credit is £16,000 and if you have more than this in your accounts it will affect the amount of Universal Credit I receive.

What is the best way of having ths money but not impact my unverisal credit? - I want to get off UC but at the moment financially I don't think i'll be able to do it without using up my inheritance very quickly.

I would ideally like to pay off my debts which I owe to my family and friends a keep an amount for a deposit in the future? Is this okay or will they not like this?

Thank you in advance

Jenny

NedS

Firstly, you must declare the capital on your online UC account as soon as you receive it.

You can use capital to repay debts on UC, and that is allowable. Do you have evidence of the debts to family and friends, otherwise it may look to a decision maker that you have simply given the money away to family and friends, which is not allowed.

If you have capital over £16k after repaying any debts, your claim for UC will close and you will be expected to support yourself using this money until you are entitled to claim UC again (the capital can diminish at the rate of the UC award you would otherwise have been entitled to receive).

mOunsNN6KL

Thank you for your reply, I will declare it once I get it.

In terms of evidence, would a letter from the family member suffice? or do they need to see past monies being transferred?

Presumably if I have under 16k then my UC will continue as normal or is it a % of the amount of savings I have?

Alice_Holt

mOunsNN6KL said:

Presumably if I have under 16k then my UC will continue as normal or is it a % of the amount of savings I have?

     If you have £6,000 or less in savings, this won’t affect your claim for these benefits.

  If you have £16,000 or more in savings, you won’t be entitled to Universal Credit.

  If you have any savings or capital of between £6,000 and £16,000, the first £6,000 is ignored. The rest is treated as if it gives you a monthly income of £4.35 for each £250, or part of £250.

mOunsNN6KL

ah thank you very much, so if i can prove that i've had a loan/debts from my family then i should be safe that my UC will be unaffected.

TELLIT01

mOunsNN6KL said:

ah thank you very much, so if i can prove that i've had a loan/debts from my family then i should be safe that my UC will be unaffected.

Once you have less than £16k your entitlement to UC will continue.  If you have more than £16k in your account, even if it is intended to repay debt, it will still end entitlement until such time as the debt is repaid. 

Alice_Holt

TELLIT01 said:

mOunsNN6KL said:

ah thank you very much, so if i can prove that i've had a loan/debts from my family then i should be safe that my UC will be unaffected.

Once you have less than £16k your entitlement to UC will continue.  If you have more than £16k in your account, even if it is intended to repay debt, it will still end entitlement until such time as the debt is repaid. 

       To clarify. 

       It's the amount of savings at the end of the assessment period that's crucial.

   If you have more than £16k at any time, but this reduces to below £16k at the end of the assessment period, then UC can still be paid for that assessment period. 
Assuming, of course, that the reason for the reduction in savings is allowable for UC purposes (e.g  repayment of a documented loan).

NedS

Alice_Holt said:

TELLIT01 said:

mOunsNN6KL said:

ah thank you very much, so if i can prove that i've had a loan/debts from my family then i should be safe that my UC will be unaffected.

Once you have less than £16k your entitlement to UC will continue.  If you have more than £16k in your account, even if it is intended to repay debt, it will still end entitlement until such time as the debt is repaid. 

       To clarify. 

       It's the amount of savings at the end of the assessment period that's crucial.

   If you have more than £16k at any time, but this reduces to below £16k at the end of the assessment period, then UC can still be paid for that assessment period. 
Assuming, of course, that the reason for the reduction in savings is allowable for UC purposes (e.g  repayment of a documented loan).

Maybe, but where a claimant declares (and has verified) more than £16,000 during an assessment period, the claim would close immediately and they would not make it to the end of their assessment period to find out how much capital they may then have. UC would not defer claim closure action until the end of the AP once capital over £16k has been verified.

Your statement implies they should not declare their capital immediately? (I'm looking for a devil's advocate emoji)

Yamor

NedS said:

Alice_Holt said:

TELLIT01 said:

mOunsNN6KL said:

ah thank you very much, so if i can prove that i've had a loan/debts from my family then i should be safe that my UC will be unaffected.

Once you have less than £16k your entitlement to UC will continue.  If you have more than £16k in your account, even if it is intended to repay debt, it will still end entitlement until such time as the debt is repaid. 

       To clarify. 

       It's the amount of savings at the end of the assessment period that's crucial.

   If you have more than £16k at any time, but this reduces to below £16k at the end of the assessment period, then UC can still be paid for that assessment period. 
Assuming, of course, that the reason for the reduction in savings is allowable for UC purposes (e.g  repayment of a documented loan).

Maybe, but where a claimant declares (and has verified) more than £16,000 during an assessment period, the claim would close immediately and they would not make it to the end of their assessment period to find out how much capital they may then have. UC would not defer claim closure action until the end of the AP once capital over £16k has been verified.

Your statement implies they should not declare their capital immediately? (I'm looking for a devil's advocate emoji)

I agree that the award would be terminated immediately, but the claimant could make a new claim immediately when their capital reduces, and the new award would have the same AP dates, so effectively there would be no break in entitlement.

Newcad

NedS said:

Maybe, but where a claimant declares (and has verified) more than £16,000 during an assessment period, the claim would close immediately and they would not make it to the end of their assessment period...

Do you have a supporting reference for that? I'd be interested to know if that is actually the case in legislation.

Technically in such circumstances the claimant should declare as soon as the savings go over £16k, and declare again once the savings go below £16k again.
Both are changes of circumstance, and so both take effect from the start of the AP in which they happened.

As far as I am aware though the decision to end the claim because of savings in excess of £16k should not be taken until the end of the AP in which the savings increased. (Thus allowing the subsequent decrease to also be reported).
At that time if the savings are still over £16k then a 'No Entitlement' decision should be made, applying from the start of the AP.

Consider in such circumstances if the decision to close a claim were made before the end of the AP.
An MR/Appeal could/would argue (rightly AFAIK) that it should not have been made at that time because it's the situation at the AP end that counts and not the snapshot situation at some time during the AP.

Yamor

Newcad said:

NedS said:

Maybe, but where a claimant declares (and has verified) more than £16,000 during an assessment period, the claim would close immediately and they would not make it to the end of their assessment period...

Do you have a supporting reference for that? I'd be interested to know if that is actually the case in legislation.

Technically in such circumstances the claimant should declare as soon as the savings go over £16k, and declare again once the savings go below £16k again.
Both are changes of circumstance, and so both take effect from the start of the AP in which they happened.

As far as I am aware though the decision to end the claim because of savings in excess of £16k should not be taken until the end of the AP in which the savings increased. (Thus allowing the subsequent decrease to also be reported).
At that time if the savings are still over £16k then a 'No Entitlement' decision should be made, applying from the start of the AP.

Consider in such circumstances if the decision to close a claim were made before the end of the AP.
An MR/Appeal could/would argue (rightly AFAIK) that it should not have been made at that time because it's the situation at the AP end that counts and not the snapshot situation at some time during the AP.

I do not think there is any impediment to a decision being made immediately to terminate the award. There is nothing to say a DM has to wait until the end of the AP to see if a further change of circumstances occurs.

The issue with getting that decision revised later is that none of the 'specific grounds' revisions seem to apply, and the 'any grounds' revision power cannot take into account any changes of circumstances which "occurred" after the original decision had effect. (Reg. 5(2)(a), UC(D&A) Regs 2013)

Similarly, an appeal wouldn't succeed, as again the Tribunal cannot take into account circumstances not "obtaining" at the time the original decision was made. (S. 12(8)(b), SSA 1998)

Remember, technically, it is not simply that only the circumstances at the end of the AP which matter for UC.
It is because the effective date of all changes of circumstances is the start of the AP.

However, as per my earlier post, I think a new claim made before what would have been the end of the AP in which the award terminates would mean no gap in entitlement.