Divorce settlement on universal credit

lexa344

Hi,
looking for advice please, I’m on universal credit and carer to a disabled child. I work part time.
Im due to receive a divorce settlement next month, of £58,000. £40,000 will be going on debt.
i need to replace my car as my child needs it. Am I able to use the remaining £18,000 for this?
thanls 

sammyjammy

I think you would have to be able to prove why you need to spend £18k on a car.  Do you currently own a car?  You can have up to £6000 in savings before it has any impact on your UC

kaMelo

Spending £18000 on a car is a lot of money for anyone, let alone someone on a means tested benefit. In doing so you would maintain entitlement to UC when otherwise, with £18000, this would cease.

Almost inevitably the DWP would want to know why you required something so expensive rather than a cheaper car, at which point you can make your case and a decision maker would decide whether it was reasonable or not.

There should be no problem paying off any documented debts as this is expressly allowed with UC.

Grumpy_chap

lexa344 said:

Hi,
looking for advice please, I’m on universal credit and carer to a disabled child. I work part time.
Im due to receive a divorce settlement next month, of £58,000. £40,000 will be going on debt.
i need to replace my car as my child needs it. Am I able to use the remaining £18,000 for this?
thanls 

Others have commented as to how a DM might view the £18k car.
You have mentioned that your child is disabled.  Dies this impose restrictions on the selection of car, or require a car with adaptations that might make the £18k look less extravagant?
Does the child qualify for any disability-related financial support in addition to your eligibility under UC?  

fatbelly

You will not be able to give 40k to your parents and retain UC. You will be assessed as having notional capital

https://forums.moneysavingexpert.com/discussion/6518722/universal-credit-paying-off-debts#latest

https://www.entitledto.co.uk/help/Deprivation-of-savings-and-other-capital-Universal-Credit

HampshireH

Debt to be paid to the parents. Reads like the parents funded it on the understanding the OP would pay them back

TELLIT01

I would expect DWP to require solid evidence of the debt, even if it is to family.

kaMelo

The reason I mentioned documented proof was to cover this kind of scenario.

In all honesty I suspect you're going to have a problem trying to claim you owe your parents money for building an extension on their house from which they will benefit with the extra space and increased value.

What evidence do you have to counter the view that there is no debt and this is just you giving them the money to look after for you?

peteuk

Disabled child - have you looked at a mobility car?  If your entitled then £18K on a car wont float…

huckster

I cannot see a Decision Maker agreeing to disregard £40k paid to a relative as a debt settlement, unless there is a legal agreement signed and witnessed at the time the debt was entered into.  And even then they might not a accept any legal agreement that existed, as it may be seen as a contrived way of a family trying to maintain benefit claims at the point any inheritance monies were received.

The inheritance will have to be disclosed to UC when it is received and I think it will be a struggle to gain any decision to keep benefit entitlements.  

tomtom256

peteuk said:

Disabled child - have you looked at a mobility car?  If your entitled then £18K on a car wont float…

They cannot force you to use the Motability Scheme, so potentially if they could justify the spend on a car a DM might accept it.