Inheritance/mortgage pay off affect UC?

howlets

I currently receive UC and high level DLA for my daughter who suffers with severe mental health issues, and unfortunately lost my Dad very recently.  My sister and I are due to receive approx £100k each in inheritance once probate is sorted and his house sold.

I am going to use mine to pay off £15k of credit card debt and the remainder off my mortgage.  

We are receiving the money into a joint executor account.

If I am paying my debts directly from the executor account, and the money doesn't touch my owm personal account at all, do I still need to declare it?  If my UC was to stop, I wouldn't be any better off financially with the inheritance as my mortgage payments would drop by a similar amount to the UC that I currently receive.

Not really sure what to do.  I had heard something about if you spend the money within a year of receiving it, it won't affect your UC?

Any help would be appreciated.

Thanks

marcia_

howlets said:

I currently receive UC and high level DLA for my daughter who suffers with severe mental health issues, and unfortunately lost my Dad very recently.  My sister and I are due to receive approx £100k each in inheritance once probate is sorted and his house sold.

I am going to use mine to pay off £15k of credit card debt and the remainder off my mortgage.  

We are receiving the money into a joint executor account.

If I am paying my debts directly from the executor account, and the money doesn't touch my owm personal account at all, do I still need to declare it?  If my UC was to stop, I wouldn't be any better off financially with the inheritance as my mortgage payments would drop by a similar amount to the UC that I currently receive.

Not really sure what to do.  I had heard something about if you spend the money within a year of receiving it, it won't affect your UC?

Any help would be appreciated.

Thanks

 You heard wrong, that is related to back pay of benefits.

 Paying off debts is allowed under universal credit. As I understand it you need to declare it if it is in your account at the end of your assessment period. If you get the money then immediately pay off your debts by the next day so there is nothing in your account other than normal you should be ok. 

Muttleythefrog

Agree with the above advice. Paying off debts is allowed under Universal Credit including mortgages. I would aim to try to ensure the inheritance (distributed)/monies are moved during as single UC assessment period (regardless of account) to avoid possible complications.

I would keep good records in case of later query and yes the 'spend within a year' does not relate to inheritances.

peteuk

Someone please correct my understanding.
If you have over £16K in your account on the last day of your assessment period, it will zero your payment, it wont stop your UC.  You can have a period of £0 (I want to say 6 months) before your UC claim is closed. 

So If I’m correct dont panic about spending it quickly, equally I would check you mortgage details because although overpayment is good, there may be a limit or penalties (or both) for doing so. 

Spoonie_Turtle

peteuk said:

Someone please correct my understanding.
If you have over £16K in your account on the last day of your assessment period, it will zero your payment, it wont stop your UC.  You can have a period of £0 (I want to say 6 months) before your UC claim is closed. 

So If I’m correct dont panic about spending it quickly, equally I would check you mortgage details because although overpayment is good, there may be a limit or penalties (or both) for doing so. 

No that's not correct, unfortunately.  You're thinking of when wages make UC nil.  Having over £16k means ineligibility for UC at all so the claim closes.

I believe - although I could be wrong here too - that if they were to use the savings to pay off debt and reclaim within 6 months then the assessment period would be the same dates, because it's treated as linked to the original claim, but anything like having LCWRA would require a new assessment and new 3-month waiting period.


For the OP, the key time frame to know is you're okay if the money goes into and back out of your possession* within the same assessment period as Muttley has said.  You should then tell them what's happened so that when data matching flags the fact you briefly had a lot of money, it's not suspicious because you've already told them about it and they know where it went.

*I truly don't know whether being in a joint executor account means it's your money or not for UC purposes, or if it only counts once it's in your account.  Some other members who know.