Inheritance, Housing benefit/Council tax benefit and debt

TELLIT01

viksviks84 said:

She did give me a bit extra to buy a car and she always said when granny died she'd give me some.

That would definitely be considered as Deprivation of Capital unless there was anything specific in the Will.

Grumpy_chap

viksviks84 said:

In May, she inherited 28k from her mum, although she owed about 16k in debt to her sister and me.

She then paid for a funeral plan (3k). Which means she has less than 10k left (which is what you are allowed in savings to receive benefits).

Repayment of debts is never DoC.

The challenge here is going to be the £16k to be repaid to her sister and the OP - to demonstrate (provably) that these were debts from prior to the inheritance and genuine repayments.
Anyone can write a piece of paper today to say that I owe them money from 15 years ago.
The suspicion might be that the money is now being gifted to (or "looked after" by) sister and OP to avoid it showing as capital for the purposes of UC.

viksviks84 said:

When her sister loaned her the money, a letter was drawn up and signed between them at the time, but there wasn't anything witnessed by a solicitor or anything. These debts were outstanding for 15 years, the loan was contingent on it being paid back as soon as the inheritance came through.

When I loaned her the money there was nothing drawn up. She did give me a bit extra to buy a car and she always said when granny died she'd give me some.

Is the financial position of the OP and the mother's sister that they could easily lend the £15k between them for a long period without interest and not harm their own finances?

I do not understand the comment about the car.  If the OP lent money to their mother, was the money gifted back to buy a car really just the repayment of the loan?
If the OP needed money from Mum to buy a car, that indicates that the OP was not in a position to easily lend money to the mother in the first place?

If mother gifts the OP in line with "always said when granny died she'd give me some" that would almost certainly be DoC.

pmlindyloo

How much state pension is your mother receiving?
Does she receive any other benefits?  PIP?  Attendance Allowance?

sheramber

Grumpy_chap said:

viksviks84 said:

In May, she inherited 28k from her mum, although she owed about 16k in debt to her sister and me.

She then paid for a funeral plan (3k). Which means she has less than 10k left (which is what you are allowed in savings to receive benefits).

Repayment of debts is never DoC.

The challenge here is going to be the £16k to be repaid to her sister and the OP - to demonstrate (provably) that these were debts from prior to the inheritance and genuine repayments.
Anyone can write a piece of paper today to say that I owe them money from 15 years ago.
The suspicion might be that the money is now being gifted to (or "looked after" by) sister and OP to avoid it showing as capital for the purposes of UC.

viksviks84 said:

When her sister loaned her the money, a letter was drawn up and signed between them at the time, but there wasn't anything witnessed by a solicitor or anything. These debts were outstanding for 15 years, the loan was contingent on it being paid back as soon as the inheritance came through.

When I loaned her the money there was nothing drawn up. She did give me a bit extra to buy a car and she always said when granny died she'd give me some.

Is the financial position of the OP and the mother's sister that they could easily lend the £15k between them for a long period without interest and not harm their own finances?

I do not understand the comment about the car.  If the OP lent money to their mother, was the money gifted back to buy a car really just the repayment of the loan?
If the OP needed money from Mum to buy a car, that indicates that the OP was not in a position to easily lend money to the mother in the first place?

If mother gifts the OP in line with "always said when granny died she'd give me some" that would almost certainly be DoC.

She repaid the loan AND a bit extra to buy a car. 

Muttleythefrog

Grumpy_chap said:

viksviks84 said:

In May, she inherited 28k from her mum, although she owed about 16k in debt to her sister and me.

She then paid for a funeral plan (3k). Which means she has less than 10k left (which is what you are allowed in savings to receive benefits).

Repayment of debts is never DoC.

Bear in mind this is not UC related benefits... repayment of debt can be considered DoC in some circumstances. It needs to be reasonable... like the debt is due or makes sense given the circumstances and is not primarily to acquire more or retain benefits.

viksviks84

elsien said:

Not by giving it to their children, though. 

What money did you give your mother and was it used for anything specific? 

It was to repay debt and a wedding gift

viksviks84

HillStreetBlues said:

Keep_pedalling said:

HillStreetBlues said:

I agree with the above, but as it's an inheritance you have more leeway than other methods of gaining capital.

In what way?

Case Law https://www.bailii.org/uk/cases/UKSSCSC/2007/CIS_1775_2007.html
Bit more on DoC here https://gardencourtchambers.co.uk/the-deprivation-of-capital-rule-in-welfare-benefits/

A person isn't expected to to spend all their inheritance on just day to day spending, they can spend it other ways.

Sorry to ask stupid questions, but what do these actually mean?! I've tried to understand it but I just can't!

viksviks84

HillStreetBlues said:

I agree with the above, but as it's an inheritance you have more leeway than other methods of gaining capital.

Can you elaborate on this?

bazdvd

viksviks84 said:

elsien said:

Not by giving it to their children, though. 

What money did you give your mother and was it used for anything specific? 

It was to repay debt and a wedding gift

well at least she will have proof of clearing the debt you lent her the money for. 
How much on top of the loan payment mum paid off was given to you?

Grumpy_chap

Muttleythefrog said:

Grumpy_chap said:

viksviks84 said:

In May, she inherited 28k from her mum, although she owed about 16k in debt to her sister and me.

She then paid for a funeral plan (3k). Which means she has less than 10k left (which is what you are allowed in savings to receive benefits).

Repayment of debts is never DoC.

Bear in mind this is not UC related benefits... repayment of debt can be considered DoC in some circumstances. It needs to be reasonable... like the debt is due or makes sense given the circumstances and is not primarily to acquire more or retain benefits.

I think I covered the part about the debt being due by my comments about needing to prove that there actually was a debt to the sister / son.