Paying back debts from legacy

Britannia12345

If I were to use money left to me in a will to pay back a relative for money I borrowed from them would this be seen as deprivation of capital? 

Voyager2002

Britannia12345 said:

If I were to use money left to me in a will to pay back a relative for money I borrowed from them would this be seen as deprivation of capital? 

Presumably you are living on means-tested benefits.

If you do anything in order to avoid having money and so to continue to qualify for benefits, that is treated as "deprivation of capital". So you need to think: if your income was not means-tested, would you still pay off these debts? Do you have any evidence? For example, if the loan had been made until you received the legacy then repaying it at this point would be natural... on the other hand, if you had something like a mortgage where you made set monthly payments extending into the distant future, repayment from a legacy probably would be considered to be deprivation of capital.

TELLIT01

I thought you were permitted to pay off any debts if claiming UC.  That wasn't the case with Income Support, ESA etc.

KxMx

TELLIT01 said:

I thought you were permitted to pay off any debts if claiming UC.  That wasn't the case with Income Support, ESA etc.

This is correct. 

Spoonie_Turtle

True but the OP hasn't specified, other than putting 'legacy' in the title.

poppy12345

Legacy benefits are mentioned yes but looking back at their previous thread I see they are now claiming UC. https://forums.moneysavingexpert.com/discussion/6554430/universal-credit-help#latest

Paying off debt is allowed when claiming UC BUT is paying back a relative included in this? Either way, we need confirmation of whether this question is related to them or someone else and whether they are claiming UC or not. 

sammyjammy

Legacy benefits are not mentioned, the OP refers to legacy as in legacy in a will.

OP do you have evidence that the debt is owed?  How much is the debt and how much is the legacy?  Do you have any savings before the legacy?

frayedknot

Paying back debts to family and friends is certainly allowed but your problem will be evidencing the debt as the DWP will be naturally sceptical and demand proof that you borrowed the money.

Britannia12345

Thanks folks. Yes, the legacy refers to the will. I owe a relative a couple of thousand when they lent me the money for a car. No savings, but when the will is finalised I'd like to be able to pay them back as soon as possible 🙂 I'm on uc btw. 

TELLIT01

Do you know approximately how much the legacy will be?  If not over £16k your UC entitlement would only be reduced, not stopped. 

Britannia12345

It will be substantially more than that so uc will stop. We're hoping to buy a house with the money.