Lump sum payment and housing benefit

shul558127

My in laws are in receipt of housing benefit/council tax benefit, he has just received a lump sum payout from a forgotten pension of aprox £18k, there will be no other income from it. Will this affect their entitlement and to what extent. If there is an effect is it the whole amount that's taken into account or just part of it, any help would be great, thankyou.

poppy12345

Are they working age or state pension age? If working age then with savings of more than £16,000 entitlement to all means tested benefits will end. 

If state pension age and they are also claiming Pension Credit there's no maximum savings limit. For every £500 or part thereof over £10,000 there's a £1/week deduction. 

Alice_Holt

A lump sum pension payment will count as capital not income.

As they will now be over the £16k HB capital limit, they need to inform the LA and their HB will end.  This will certainly end any council tax reduction (which often has a lower capital limit set locally).

https://england.shelter.org.uk/professional_resources/legal/benefits/housing_benefit/treatment_of_capital_and_income_in_housing_benefit_calculations#title-1

You don't say if they are in receipt of Pension Credit (PC) or if they are under SPA.

If receiving PC the outcome may be different, as eligibility for HB & CTr depends on their PC entitlement.

If over SPA they can reapply for HB when below the £16k capital limit. If below SPA, they will need to apply for UC to get any future help with housing costs.

It would have been sensible to have done some research before accepting the £18k lump sum, and possibly phasing receipt of these pension monies. 

shul558127

Thankyou for your quick responses, they are both SPA, they have no other savings or income, she is iro high rate AA, they dont qualify for PC

HillStreetBlues

shul558127 said:

Thankyou for your quick responses, they are both SPA, they have no other savings or income, she is iro high rate AA, they dont qualify for PC

Did they make sure they aren't entitled to PC? as AA means extra PC.

Alice_Holt

shul558127 said:

Thankyou for your quick responses, they are both SPA, they have no other savings or income, she is iro high rate AA, they dont qualify for PC

      It's a pity they don't qualify for PC as then the HB might have continued.

      Have they done a recent PC calculation check?

     With the AA award their minimum income (below which a PC award is possible) is c.£410 pw (less an assumed income from £8k of the £18k savings).

shul558127

I have used the online calculator but not recently, they were slightly over the limit but assumed they always would be as their pensions will never go down? Would him claiming carers allowance for her (I know he won't receive the payment as he is over spa) attract a carer premium or affect her AA entitlement? 

poppy12345

shul558127 said:

I have used the online calculator but not recently, they were slightly over the limit but assumed they always would be as their pensions will never go down? Would him claiming carers allowance for her (I know he won't receive the payment as he is over spa) attract a carer premium or affect her AA entitlement? 

There will be an underlying entitlement to Carers allowance. This may mean there's some entitlement to PC because carers premium will increase entitlement but it would still depend on their joint circumstances. If she's claiming AA does her partner claim a disability benefit? If so what award do they have?

shul558127

No he doesn't claim anything he has no care needs as such or any illness thankfully, he is just getting older. He does care for her by preparing meals and helping her to dress and shower etc. I have been a bit scared of putting in a claim for carers allowance for him incase it messed up her AA.
When I used the PC calculator before I also did it as if he was iro underlying entitlement to CA but they still did not qualify, their SP's are quite high, so I think they will always be just outside of qualifying for PC. I will check again this morning, thank you all for your help so far though 😊

Murphybear

Alice_Holt said:

shul558127 said:

Thankyou for your quick responses, they are both SPA, they have no other savings or income, she is iro high rate AA, they dont qualify for PC

      It's a pity they don't qualify for PC as then the HB might have continued.

      Have they done a recent PC calculation check?

     With the AA award their minimum income (below which a PC award is possible) is c.£410 pw (less an assumed income from £8k of the £18k savings).

Just be aware the online benefit checkers don’t always agree with the DWP.  I have a SP and 2 small works pensions so above the PC level.  When I was awarded AA I rechecked my entitlement to PC using all the checkers I could find and they all said I was now entitled to it although the amounts varied a lot.  I applied for PC and was told I was not entitled to PC as my income was too high.  I treble checked everything and reapplied.  That was 9 months ago and I never heard from them.  

Before I got AA I got about half my rent and half my CT paid, when I got AA I got the full amount even though I didn’t get PC.  

Its always worth rechecking your entitlement