DWP recovery from estates - Pension credit

gizz_10

My mum recently passed away in September - she was in receipt of a very small state pension and so she got pension credit. These were her only forms of income until 5 years ago she had a serious fall and became disabled and then she qualified for attendance allowance. Over the years I have always lived with mum, and I took care of all the house expenses, I paid all the bills, including all the grocery costs, mum therefore rarely spent her pension and pension credit. When she got ill I took care of her as well so most of her attendance allowance was also saved. Now her probate has been granted and she has managed to save a fair bit due to me taking on all the expenses for all these years, and the DWP have sent the letter about claiming back overpaid pension credit from her estate as her savings are now over the threshold.

She was on an Assessed Income Period until 2017 and at the time that expired her savings were below the threshold.

Her only income was the state pension, pension credit and Attendance Allowance. Mum was only able to save because she was supported by her family (me) and therefore managed to build up some savings in the last few years. I read that the attendance allowance is disregarded as income, but does that apply if it is saved and not spent as well? or at what point is it regarded as capital if it is saved?
I have tried to find out if you can prove the only income was pension, pension credit and attendance allowance whether they can claim she stopped being eligble because she was able to save it rather than spend it? Does anyone have any experience of this?

My other option I was thinking - mum always said i should take the cash from her for her share of the bills, food etc and I always used to joke with her and say - if i need it i will ask you for it, for now you hang onto it - because I always worried in case something happened to me = at least she would have some savings to fall back on. So if the DWP insist on clawing this pension credit back then could I actually say that mum owed me a debt of half of all the bills etc, claim that from the estate and then resubmit the probate? I have all my statements so could work out the exact amount to a degree. In which case there wouldn't be as much savings left for DWP to come after?

Would appreciate any advice and guidance on the above. Thanks in advance.

mwddrwg

You obviously don't need to elaborate here as to why you supported her financially to such an extent when she had her own income, but would it not have been better to spend her own money first with you topping it up if she needed more money at any point? 

As you have now realised, your mother not spending any money and saving it all has resulted in her reaching the savings threshold for Pension Credit and the DWP will claim this back as an overpayment once they savings reach their limit. I think this is still how it works as I used to work for DWP on income related benefits overpayments years ago but happy to be corrected if things have changed,

Keep_pedalling

Unfortunately not contributing to household expenses over those years would have built up significant savings, which would have disqualified her from PC. I think it is going to be very difficult for you to now claim that she was in debt to you as any debts she had should have been included in your probate return which you obviously did not do.

Seasalt3

You say you were living with your mum whilst she was claiming pension credit.  My understanding is that all household income is taken into account when assessing if there is an entitlement to pension credit so your personal income should also have been taken into account. 

mwddrwg

Seasalt3 said:

You say you were living with your mum whilst she was claiming pension credit.  My understanding is that all household income is taken into account when assessing if there is an entitlement to pension credit so your personal income should also have been taken into account. 

I think that only applies to people living together as a couple (married or not) - not the children of said person/couple

Seasalt3

I know someone whose adult grandson moved in with her and she lost her pension credit as he was working

gizz_10

mwddrwg said:

Seasalt3 said:

You say you were living with your mum whilst she was claiming pension credit.  My understanding is that all household income is taken into account when assessing if there is an entitlement to pension credit so your personal income should also have been taken into account. 

I think that only applies to people living together as a couple (married or not) - not the children of said person/couple

DWP were fully aware of our living situation and I was listed as a non-dependent on all the paperwork.  As far as we understood it would only have affected her claim if I was paying rent to her t to live with her (eg like a lodger would) which would have increased her income - which i was not - ie me living with her did not increase her income for pension credit purposes.  We were living together in the family home which I grew up in.

gizz_10

Keep_pedalling said:

Unfortunately not contributing to household expenses over those years would have built up significant savings, which would have disqualified her from PC. I think it is going to be very difficult for you to now claim that she was in debt to you as any debts she had should have been included in your probate return which you obviously did not do.

I believe that it is possible to amend the probate amount if assets or debts come to light after probate has been granted though right?

gizz_10

mwddrwg said:

You obviously don't need to elaborate here as to why you supported her financially to such an extent when she had her own income, but would it not have been better to spend her own money first with you topping it up if she needed more money at any point? 

As you have now realised, your mother not spending any money and saving it all has resulted in her reaching the savings threshold for Pension Credit and the DWP will claim this back as an overpayment once they savings reach their limit. I think this is still how it works as I used to work for DWP on income related benefits overpayments years ago but happy to be corrected if things have changed,

Hindsight is a wonderful thing isn't it.  If we had realised that her not spending her pension /pension credit would lead to this then i would have made sure her cash was used first to pay the bills.  I had a decent job and was able to support our household, which is expected in our culture.  I never thought twice about it or begrudged it.  Pensioners live on little enough as it is and she had suffered for years in order to bring up her 3 kids after my dad passed away when we were very young.  She had to scrimp and save when we were young, so that habit never left her, and she remembered all to well never knowing if she could put food on the table.  Soo she saved whenever she could. Thanks to her I was able to get a degree and a decent job, the least I could do was  cover the household expenses once i was comfortably able to afford to.

Keep_pedalling

gizz_10 said:

mwddrwg said:

Seasalt3 said:

You say you were living with your mum whilst she was claiming pension credit.  My understanding is that all household income is taken into account when assessing if there is an entitlement to pension credit so your personal income should also have been taken into account. 

I think that only applies to people living together as a couple (married or not) - not the children of said person/couple

DWP were fully aware of our living situation and I was listed as a non-dependent on all the paperwork.  As far as we understood it would only have affected her claim if I was paying rent to her t to live with her (eg like a lodger would) which would have increased her income - which i was not - ie me living with her did not increase her income for pension credit purposes.  We were living together in the family home which I grew up in.

You were in effect paying rent by paying all the household bills. 

Keep_pedalling

gizz_10 said:

Keep_pedalling said:

Unfortunately not contributing to household expenses over those years would have built up significant savings, which would have disqualified her from PC. I think it is going to be very difficult for you to now claim that she was in debt to you as any debts she had should have been included in your probate return which you obviously did not do.

I believe that it is possible to amend the probate amount if assets or debts come to light after probate has been granted though right?

It is possible to amend the value of an estate with HMRC where an IHT return has been submitted but as far as I know there is no way of doing so where only probate was applied for.

I also think the OP would have great difficulty convincing the DWP that this was any form of a loan as no large lump sum was made and no repayments made over the years. If the OP challenges this the DWP may take the view that the OP was actually paying rent in the form of meeting all household bills and that PC should not have been awarded in the first place which could result in a larger claw back than would be the case of it no longer being available because of increased savings levels.

The OP might like to post over on the benefits board to get a some answers from better qualified members.