Inheritance on Benefits. Stressful and depressing.

Grumpy_chap

Dr_Z said:

It's not nearly enough to buy a house in this area (and we need to stay here for various reasons, and even if we did move further afield, after we've paid for the property, we'd have very little left, and would be needing to trouble the DWP for benefits again ... which is where I understand things can get problematic, as they'd consider us to have deprived ourselves of the money.  Even if that was the case, I'd be very worried about having bought a house and having no money for maintenance.  

Buying a house (to be your home) would not be classed deprivation of assets.
You are wise to be aware of the costs / maintenance of owning a home.

Dr_Z said:

So the alternative is to simply live off the money?  Absolutely fair, I get the logic in that, and I totally agree that someone with £150k in their pocket should be paying their own way!   But the part that scares me is that inevitably this money will run down on rent and cost of living, and we'll end up needing benefits again. (pretty sure this would be 10 years, max? Rent and Council tax are currently £15,000 per year alone  and these number only seem ever go up! )

As I understand it, at this point they'll be very judgemental about what we spent the money on? and if they deem we've spent it on unnecessary stuff, we'll be left out in the cold? 

So we go from where we are now. scraping to get by, but being allowed to spend what we have on what we can afford ... if we've budgeted well, maybe a little holiday, or a new TV? Presents for the kids etc ...

You can spend the money as you wish.
If you find yourself claiming for UC in the future, there may be queries about where the money was spent, but that will not be to an excess so long as you have not spent to an excess. 
It is all about reasonable proportionality.  If you enjoy a "normal" holiday, buy a nice TV or whatever, that should be perfectly acceptable. 
If you spend to excess, so blow the whole £150k in the next fortnight on however many nights that buys you in a suite at The Ritz, plus a £20k TV that won't even fit in the house, that might well be deemed deprivation of assets.

You mention that your wife cannot work because of medical conditions, so any benefits you both receive linked to that which are not means-tested should continue.

You have suggested that the £150k might eek out to 10 years, so decrease at £15k per year.  I'd suggest you could spend that at around £21k - £22k without being excessive as that is roughly the typical take home pay for one adult working full time on NMW.

As an aside, now you have this money available to you, are there any aids that would be helpful to make your wife's life just "easier" to manager her disability and / or give her (or you) more freedom?
Do you have access to a suitably adapted car?
Could you engage external care support to provide respite and allow you the time to take up employed work, should that be what would work better overall for the both of you?
Just some "thinking outside the box" thoughts - and you may have many others - that allow you to translate this inheritance from the concern it is currently to a positive financial change.

Grumpy_chap

I just thought, what pension provision does the OP and OP's wife have?
Even if they are not working, they can both pay £2,880 per year (which will be grossed up to £3,600) into a SIPP.

TELLIT01

DWP won't expect the OP to have lived on the poverty line for years before claiming benefits again.  I've no idea what the average income is these days but would expect any spending levels below that figure to be acceptable expenditure.  The OP would certainly be allowed to replace old or worn out 'stuff' in the home such as white goods, carpets etc.  They could also purchase a vehicle suitable to the wife's needs.  Just don't go mad.

The advice generally given when people in a similar position to the OP receive an inheritance is NOT to purchase a property.  The reason is that the inheritance money will run out but the house will still need to be maintained.  Where would the money to do so come from?

Dr_Z

Thanks for all the replies. 

Forgive me for not responding immediately, but I can only do this for small periods of time otherwise I end up having an awful headache, and that really doesn't help with anything!  I really am grateful for all the replies though. 

Dr_Z

TELLIT01 said:

The advice generally given when people in a similar position to the OP receive an inheritance is NOT to purchase a property.  The reason is that the inheritance money will run out but the house will still need to be maintained.  Where would the money to do so come from?

Thanks, and yes, this is exactly my concern with owning a property.
 As I understand it, the benefits system would (eventually) catch us, and leave us with £6k in total savings, and simply can't see that being enough for property maintenance for the rest of our lives?  

The points you, and others have made suggesting we wouldn't be penalised for improving our modest quality of life is reassuring, but until that day when we are forced to turn back to benefits..   I think we'll always have that fear.  Sounds like it's something we'll just have to deal with though. 

We are in our 50's. (I'm 53, my wife is 57).    We don't have pensions in any meaningful way,  but ....
 I did start a Personal pension at 16 years old at the behest of my parents,  I moved away, and completely forgot about it, and wasn't reminded of it until a year or so back when Prudential tracked me down,  I don't remember paying much into it at all, but apparently its worth about £7k now?  Which while pretty useless as a pension, was quite a surprise! 

Dr_Z

Grumpy_chap said:

Dr_Z said:

It's not nearly enough to buy a house in this area (and we need to stay here for various reasons, and even if we did move further afield, after we've paid for the property, we'd have very little left, and would be needing to trouble the DWP for benefits again ... which is where I understand things can get problematic, as they'd consider us to have deprived ourselves of the money.  Even if that was the case, I'd be very worried about having bought a house and having no money for maintenance.  

Buying a house (to be your home) would not be classed deprivation of assets.
You are wise to be aware of the costs / maintenance of owning a home.

Dr_Z said:

So the alternative is to simply live off the money?  Absolutely fair, I get the logic in that, and I totally agree that someone with £150k in their pocket should be paying their own way!   But the part that scares me is that inevitably this money will run down on rent and cost of living, and we'll end up needing benefits again. (pretty sure this would be 10 years, max? Rent and Council tax are currently £15,000 per year alone  and these number only seem ever go up! )

As I understand it, at this point they'll be very judgemental about what we spent the money on? and if they deem we've spent it on unnecessary stuff, we'll be left out in the cold? 

So we go from where we are now. scraping to get by, but being allowed to spend what we have on what we can afford ... if we've budgeted well, maybe a little holiday, or a new TV? Presents for the kids etc ...

You can spend the money as you wish.
If you find yourself claiming for UC in the future, there may be queries about where the money was spent, but that will not be to an excess so long as you have not spent to an excess. 
It is all about reasonable proportionality.  If you enjoy a "normal" holiday, buy a nice TV or whatever, that should be perfectly acceptable. 
If you spend to excess, so blow the whole £150k in the next fortnight on however many nights that buys you in a suite at The Ritz, plus a £20k TV that won't even fit in the house, that might well be deemed deprivation of assets.

You mention that your wife cannot work because of medical conditions, so any benefits you both receive linked to that which are not means-tested should continue.

You have suggested that the £150k might eek out to 10 years, so decrease at £15k per year.  I'd suggest you could spend that at around £21k - £22k without being excessive as that is roughly the typical take home pay for one adult working full time on NMW.

As an aside, now you have this money available to you, are there any aids that would be helpful to make your wife's life just "easier" to manager her disability and / or give her (or you) more freedom?
Do you have access to a suitably adapted car?
Could you engage external care support to provide respite and allow you the time to take up employed work, should that be what would work better overall for the both of you?
Just some "thinking outside the box" thoughts - and you may have many others - that allow you to translate this inheritance from the concern it is currently to a positive financial change.

Thanks for this very helpful reply.   Yes the kind of things on the BIB,  these are the kind of things we'd like to spend some money on, but would be worried that they would be deemed unnecessary ... as we have lived for years without them? 

But the if the point you are making about the NMW is correct, and the DWP see things that way, then maybe as someone else suggested, I'm overthinking? or overworrying? 

elsien

When it comes to deprivation of capital, the DWP would have to show that a significant purpose of your spending is to reduce your capital in order to increase your entitlement to benefits.
I would suggest that they would have great difficulty in doing that if spending is clearly to help support your wife with her disability needs. The fact that you haven’t done it before is irrelevant. You’ve managed because you’ve had to, because you hadn’t  had the income or capital to do otherwise. If she needs something really expensive, and maybe get an OT to confirm that it is needed, if that puts your mind at rest. Any expensive disability related purchase should be assessed  to see that it meets needs anyway 

powerspowers

Thanks, and yes, this is exactly my concern with owning a property.
 As I understand it, the benefits system would (eventually) catch us, and leave us with £6k in total savings, and simply can't see that being enough for property maintenance for the rest of our lives?  

The points you, and others have made suggesting we wouldn't be penalised for improving our modest quality of life is reassuring, but until that day when we are forced to turn back to benefits..   I think we'll always have that fear.  Sounds like it's something we'll just have to deal with though. 

We are in our 50's. (I'm 53, my wife is 57).    We don't have pensions in any meaningful way,  but ....
 I did start a Personal pension at 16 years old at the behest of my parents,  I moved away, and completely forgot about it, and wasn't reminded of it until a year or so back when Prudential tracked me down,  I don't remember paying much into it at all, but apparently its worth about £7k now?  Which while pretty useless as a pension, was quite a surprise! 

UC savings limit is £16k not £6k. They make a reduction based on savings between £6k-16k, currently about £150 a month less if you are towards the higher end. 

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#what-we-take-into-account

Time2count

To help set your mind at rest, here's my story...
Received c. £35k inheritance. Called housing benefit to stop it immediately before I'd even put the cheque in the bank. 3 years later claimed housing benefit again. The expenditure was never queried, although I did expect it to be. I was working on min wage all throughout this period. I was very fortunate to have received the inheritance when I did as a year later my landlord decided not to renew my tenancy. I went from a furnished flat I wasn't allowed to decorate to an unfurnished flat that I was! I kept all my receipts for the furniture, carpets, paint, curtains etc but was never asked for them (in fact I still have them somewhere). I was receiving around £500/month housing benefit before the inheritance so 3 years of paying full rent plus furnishing the new place would be easy to show. However I also swapped our annual £9.99 sun holiday for buying passports and we had a couple of holidays abroad (Ireland and Isle on Man) plus weekends away in that time period as well. 

Work out the total of the benefits that will stop each month, multiply by 12 and that is the bare minimum they'd expect your inheritance to reduce by each year. Add in any needs - replace furniture/ car/ disability aids etc. And then add a further £3-4k a year to have a better quality of life - even if that just means the ability to go to the supermarket and put whatever you like in the trolley!
My favourite moment of having the money was taking my son (aged 10/11 at the time) away for a day at the coast and telling him I was going to say yes to anything he wanted. Previously he'd have to choose whether it was crazy golf or arcades, ice cream or doughnuts etc. That magical day we did everything he wanted and I recall him having 3 ice creams and I didn't spend the day mentally working out what I could cut back if we overspent 😀

Dr_Z

powerspowers said:

Thanks, and yes, this is exactly my concern with owning a property.
 As I understand it, the benefits system would (eventually) catch us, and leave us with £6k in total savings, and simply can't see that being enough for property maintenance for the rest of our lives?  

The points you, and others have made suggesting we wouldn't be penalised for improving our modest quality of life is reassuring, but until that day when we are forced to turn back to benefits..   I think we'll always have that fear.  Sounds like it's something we'll just have to deal with though. 

We are in our 50's. (I'm 53, my wife is 57).    We don't have pensions in any meaningful way,  but ....
 I did start a Personal pension at 16 years old at the behest of my parents,  I moved away, and completely forgot about it, and wasn't reminded of it until a year or so back when Prudential tracked me down,  I don't remember paying much into it at all, but apparently its worth about £7k now?  Which while pretty useless as a pension, was quite a surprise! 

UC savings limit is £16k not £6k. They make a reduction based on savings between £6k-16k, currently about £150 a month less if you are towards the higher end. 

https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#what-we-take-into-account

Ah yes, I understand that, but I mean once were left with £16k, that would gradually be eroded, as its used to cover the  reduction in the amount of benefits that we would be paid, until we are left with £6k.