Inheritance and DWP Benefits

lvladskillz

Inheritance due: £14,200
Employment: Self Employed
Living Status: Private renting
Marital Status: Cohabiting (fiancée)
Dependants: 2
Benefit: Universal Credit

Hi guys, so a few questions regarding the situation I’m going to find myself in soon when I receive the above inheritance. I understand the basics surrounding £6,000 savings and £16,000 maximum before UC stops.

I have questions with how I can invest and also spend my money. From I gather I’m free to clear debt like credit cards, direct debits.

Where do I stand on spending it on maybe a holiday, new clothes, new household items, a deposit for a mortgage. I’m worried about spending and what the DWP can suspend money for.

I’ll have £14,000 but when I spend some of it do they take that into consideration? Have I got to use the entire money to swindle away on benefits? Can I spend it too quick?

Thanks for any advice to settle my worries.

Brie

I'd do things in a bit of a cascade to get the most effect from the money.

1. Debts - top priority.  Including any overdraft.
2. Replacing old/worn out household items - new sofa, new bed, car, whatever.  So there's no questions take pictures of the old stuff in case you're asked to justify the spend (very unlikely).
3. Clear bills to save on monthly payments - pay your council tax, any annual things that you pay monthly like contents insurance.
4. New clothes, etc - particularly if you have a specific even coming up (wedding!!!).  And certainly nothing the matter with getting a new winter coat, replacing worn out towels or bedlinen.  
5. Holiday.  Everyone is entitled to one if they can afford it.  

I think there's a period of time allowed for you to spend some of your inheritance before it effects UC but can't put my hands on anything to prove that.  I think it's 6 months but hopefully someone else will be able to confirm that.

lvladskillz

Brie said:

I'd do things in a bit of a cascade to get the most effect from the money.

1. Debts - top priority.  Including any overdraft.
2. Replacing old/worn out household items - new sofa, new bed, car, whatever.  So there's no questions take pictures of the old stuff in case you're asked to justify the spend (very unlikely).
3. Clear bills to save on monthly payments - pay your council tax, any annual things that you pay monthly like contents insurance.
4. New clothes, etc - particularly if you have a specific even coming up (wedding!!!).  And certainly nothing the matter with getting a new winter coat, replacing worn out towels or bedlinen.  
5. Holiday.  Everyone is entitled to one if they can afford it.  

I think there's a period of time allowed for you to spend some of your inheritance before it affects UC but can't put my hands on anything to prove that.  I think it's 6 months but hopefully someone else will be able to confirm that.

That’s some solid advice, hopefully others can confirm the last part. So don’t think I can spend time doing what you said before speaking with the DWP?

RAS

According to others on the Benefits Forum (DWP), the primary date is the last day of your assessment period, when you have to report any savings. Exceeding the limit briefly during the assessment period is not a problem.

However, reducing money solely for the purposes of avoiding a reduction is UC is always deprivation of assets. 

Unless you've already got over £2k in savings, you are not going to top the limit. If you've got £2k savings, why not book a "modest" holiday before you inherit? 

If you've got CT arrears, fines, overdrafts, a car that's going to fail it's MOT, cooker that has various elements not working, fridge with broken freezer, sorting those out before the assessment period ends is not an issue.

lvladskillz

RAS said:

According to others on the Benefits Forum (DWP), the primary date is the last day of your assessment period, when you have to report any savings. Exceeding the limit briefly during the assessment period is not a problem.

However, reducing money solely for the purposes of avoiding a reduction is UC is always deprivation of assets. 

Unless you've already got over £2k in savings, you are not going to top the limit. If you've got £2k savings, why not book a "modest" holiday before you inherit? 

If you've got CT arrears, fines, overdrafts, a car that's going to fail it's MOT, cooker that has various elements not working, fridge with broken freezer, sorting those out before the assessment period ends is not an issue.

I don’t quite understand the first paragraph regarding primary dates and assessment dates?

KxMx

Each UC payment is based on your circumstances for the previous calender month, known as the assessment period. 

It's your circumstance, such as money in your accounts, on the last day of your AP which are most important. 

Marcon

Charities have useful info on this sort of question. Have a look at https://www.scope.org.uk/advice-and-support/inheritance-lump-sum

marcia_

Brie said:

I'd do things in a bit of a cascade to get the most effect from the money.

1. Debts - top priority.  Including any overdraft.
2. Replacing old/worn out household items - new sofa, new bed, car, whatever.  So there's no questions take pictures of the old stuff in case you're asked to justify the spend (very unlikely).
3. Clear bills to save on monthly payments - pay your council tax, any annual things that you pay monthly like contents insurance.
4. New clothes, etc - particularly if you have a specific even coming up (wedding!!!).  And certainly nothing the matter with getting a new winter coat, replacing worn out towels or bedlinen.  
5. Holiday.  Everyone is entitled to one if they can afford it.  

I think there's a period of time allowed for you to spend some of your inheritance before it effects UC but can't put my hands on anything to prove that.  I think it's 6 months but hopefully someone else will be able to confirm that.

 I don't think that's isn't the case. The only time I know of that they give time before counting it as capital is when you are selling your home. 

Marcon

marcia_ said:

Brie said:

I'd do things in a bit of a cascade to get the most effect from the money.

1. Debts - top priority.  Including any overdraft.
2. Replacing old/worn out household items - new sofa, new bed, car, whatever.  So there's no questions take pictures of the old stuff in case you're asked to justify the spend (very unlikely).
3. Clear bills to save on monthly payments - pay your council tax, any annual things that you pay monthly like contents insurance.
4. New clothes, etc - particularly if you have a specific even coming up (wedding!!!).  And certainly nothing the matter with getting a new winter coat, replacing worn out towels or bedlinen.  
5. Holiday.  Everyone is entitled to one if they can afford it.  

I think there's a period of time allowed for you to spend some of your inheritance before it effects UC but can't put my hands on anything to prove that.  I think it's 6 months but hopefully someone else will be able to confirm that.

 I don't think that's isn't the case. The only time I know of that they give time before counting it as capital is when you are selling your home. 

This might help to clear up the confusion (although probably better not to post speculative 'time frames' in the first place without checking first via a reliable source - in this case a quick google gets you to Shelter's page https://england.shelter.org.uk/housing_advice/benefits/how_a_change_of_circumstances_affects_universal_credit#:~:text=when%20someone%20dies.-,Inheriting%20money,universal%20credit%20is%20worked%20out.0:

Inheriting money

You cannot get UC anymore if you inherit more than £16,000.

If you inherit between £6,000 and £16,000, you can still get UC but it usually goes down. Savings or capital between these amounts affect how your universal credit is worked out.

Be careful how you spend inherited money. The DWP could decide you have spent it deliberately to keep getting UC. This would affect your claim. 

You can use money you inherit to reduce your debts or for other reasonable spending without it affecting your claim.

Inheriting a property

The DWP treats a property that you do not live in as your home as having a 'capital value'. 

Capital value is the money you would get if you sold the property, after:

• paying off the mortgage and any secured loans

• taking off 10% for sales costs

This amount might not count for up to 6 months or sometimes longer if you are moving into or selling the property.