On benefits and soon to receive an inheritance, what next?

kitkat_kitten

Our father died intestate, (divorced and never remarried) so each of his children will receive equal share of estate, roughly £40k each. One of my siblings is in receipt of means tested benefits, currently living with our mother in a council house. Our Mum is only person on tenancy and has never done a right to buy despite living there in same property for over 50 years. Trying to find out what DWP class as acceptable spending of the inheritance (and not deliberate depletion of assets) is proving impossible.  
1. Can anyone point me to information without at this stage engaging an expensive solictor.
2. Does anyone know if my sibling could jointly buy the council house they both live in under the right to buy scheme. My sibling has lived there for 40 years.
Any guidance will be appreciated. My sibling just wants to secure a better future since currently, when Mum passes she will effectively become homeless. 
A point to consider that as no will was made, the funds have to be distributed according to law and cannot be varied. Many thanks. 

Grumpelstiltskin

Hi you would be better off posting on this section.

Benefits & tax credits — MoneySavingExpert Forum

MSE_ForumTeam5

thread moved as suggested

Alice_Holt

 Trying to find out what DWP class as acceptable spending of the inheritance (and not deliberate depletion of assets) is proving impossible.  
1. Can anyone point me to information without at this stage engaging an expensive solicitor.

That's because any decision made by a DWP decision maker will be a judgement based on the particular circumstances (and also carries appeal rights to tribunal if you disagree with their decision).

The key is that DWP will consider deprivation of capital (D of C) if the intention in deliberately getting rid of the capital is to secure or increase entitlement to a means-tested benefit.

Btw, it would be a complete waste of money to engage a solicitor on this topic.

Broadly, the purchase of a modest car / holiday / new furniture is not likely to be considered D of C. Blowing the capital on a brand new luxury top of the range car / round the world cruise, etc may well be considered D of C.

The purchase of an appropriate property to live in is unlikely to be considered D of C, as the intention is to secure future living accommodation, not to maximise benefits. However you / she do need to consider the ongoing costs of maintaining / insuring / running a house whilst on benefits.   

Newcad

Firstly the inheritance will not affect Income Related benefits until the money is actually in your siblings bank and they can access it and spend it..
It's only at that point that they need to tell the DWP and don't forget the Council for any HB or Council Tax purposes..

Of course £40k in capital will stop IR benefits.
Any non-means tested benefits they may be getting, such as PIP, would not be affected by the capital and so would continue to be paid.

I don't believe that there is any benefits disregard if the money to be used to purchase a home has come from an inheritance, unless it was stipulated in the will that it only be used for such a purchase. (and there is no will here).

However if the money is spent to purchase their home that wouldn't be deprivation and they could reclam IR benefits (UC) once the money had gone.

If the money, or part of it, was spent on something other than buying their home then that might be deprivation depending on how much was spent and what on.
Presumably they would have to be living on some of it because their benefits had stopped, and buying a home, even through right to rent, can take months. So you need to factor that into how much will be available for the purchase.

Could they buy a share of the property under right to buy?
This guidance seems to say that they could under "7. Can I make a joint application?"
I'd suggest that you double check though with council or HA whichever it is, and probably get legal advice too.
https://www.ownyourhome.gov.uk/scheme/right-to-buy/faqs/

I suppose the other question is can Mum afford to buy her share?
Of course other siblings could help there, they've just got a wad of inheritance after all.
See that guidance again "8. Can my children buy my home for me?"

HillStreetBlues

kitkat_kitten said:

2. Does anyone know if my sibling could jointly buy the council house they both live in under the right to buy scheme. My sibling has lived there for 40 years.
Any guidance will be appreciated. My sibling just wants to secure a better future since currently, when Mum passes she will effectively become homeless.

A couple of thing to consider.
Has there been a "succession" to the property, if not then check as the tenancy could be passed on.
If your sibling does jointly buy, what happens to the property if the other joint owner dies?

peteuk

kitkat_kitten said:

 One of my siblings is in receipt of means tested benefits, currently living with our mother in a council house. Our Mum is only person on tenancy and has never done a right to buy despite living there in same property for over 50 years. 

So as above your sister can get a joint right to buy if she has been living in the property for over 12 months and this is her main home.  She can also gift your mum the money however this will be seen as DoC and she will be treated like she still has the money. 

I dont know if £40K is enough to buy the property out right, Im going to suggest that as she is claimong UC she has no other savings above £16K.   Your Mum may have savings, however the difference in the cost V £40K is going to potentially be a mortgage at which point they will have to both pass affordabilty checks. 

Yes once the £40K is gone, she will be able to claim UC again, but there will be nothing on it for housing costs. 

Id suggest she looks hard at all the possibilities before jumping.