Receiving Inheritance whilst on Universal Credit

Unicorn79

I am likely to receive around £20K inheritance next year.  This will take me over the £16K threshold for savings, although I am confused with advise on this.  Some places I read if inheritance is over £16K the UC case is closed and in other cases it relates to capital totalling £16K + means the UC case is closed.

Issue is, I have a 12 year old car and need this updated, so I would need some money out of the inheritance to fund this. This would naturally bring this below £16K.  How do I navigate around this?  Could I speak to UC re disregarding some of this inheritance for a car, or would I need to close the case when the funds come in, then open a new case again once I have a car.

Either way, having a child and paying rent means any additional funds over £16K would not last long anyway with outgoings and childcare.

Hoping for a couple of experiences/scenarios for this situation.  My mum left me this and nothing for my son, but it looks like I cannot even gift my son some money, so I am stuck with this...

HillStreetBlues

I believe there are two viewpoints
One is once your get the £20k your UC will end and then you can reclaim once it's down to £16k or under. The other one is if you get the £20k and bring it to the £16k or under in the same assessment period then UC will continue.
My personal view is the latter.
Inheritance doesn't fall into a disregard category, not does buying a car, I don't see any options for a  disregard

Grumpy_chap

Does the OP have any debts?  If the OP receives the inheritance and uses it to pay down debt (within the same assessment period) that is not considered deprivation of assets.

With regard to the car, can the OP arrange so that the inheritance is received and the new car purchased within the same assessment period?  AIUI, this will not then show as capital as far as UC is concerned.

Others may advise whether journal entries are required to explain either of the above options if they are followed.

Unicorn79

Thank you both. It seems I do not specifically need to update them with the exact inheritance figure - or credit, just the associated savings for that month?? Presumably, it may he worth confirming capital savings, but also outlining this in the journal for clarity? 

frayedknot

Are you on good terms with the executor?

An inheritance can be, and often is,  paid in installments.

poppy12345

frayedknot said:

Are you on good terms with the executor?

An inheritance can be, and often is,  paid in installments.

Is it really? That could be treated as deprivation of capital (DoC) and you would still be treated as having the money, which will still affect your means tested benefits. 

justwhat

poppy12345 said:

frayedknot said:

Are you on good terms with the executor?

An inheritance can be, and often is,  paid in installments.

Is it really? That could be treated as deprivation of capital (DoC) and you would still be treated as having the money, which will still affect your means tested benefits. 

Sometimes for various reasons its paid out in "chunks"/ partial distributions etc.

You could ask executor for an emergency payment due to hardship eg. you need a new car.

So would work for UC. However how you get rid of those "chunks" may fall foul of UC rules lol 

Unicorn79

Thank you.. I feel pretty confident a car would not be DoC.. I live in a small village with no transport links and I am self-employed so also need a car to see clients. I am guessing I would just have to sync a car purchase with the credit. I thought I had to let UC know I have inheritance, but it doesn’t look like I have to per se, just the savings part. This is positive in that respect.

Newcad

Another option to get the timings right would be if you could buy the needed car on finance (shortly) before you get the inheritance.
That depends of course on getting a finance deal you can afford.
Talk to your local dealers about it, or maybe something like this might be possible for you:
https://www.carbase.co.uk/news-and-features/car-finance/pay-nothing-for-60-days-with-our-finance-deals/

Then immediately you get the inheritance money fully pay off the finance debt so that you don't have over £16K savings/capital at your UC AP end.
(Note though that there may be an additional fee for paying off the finance early).

PS If you are using the car for business then you may also be able to get tax breaks on the purchase.
https://www.gov.uk/capital-allowances/business-cars

Unicorn79

Thank you @ Newcad 

I think either car finance or a loan of some sort may be a way around this.  I would just need to compare early exit and the best way around this.  I will add a new post for some financial advice on this.  

Re: business, I currently claim per mile which is 45p, this is is easiest way I feel, but means I cannot divide up the sot of the car etc this way.