Inheritance, Housing benefit/Council tax benefit and debt

Muttleythefrog

Grumpy_chap said:

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.

I took your point in isolation.... I felt I had to clarify... especially given it is a very common bit of advice that is literally correct in most cases we're seeing because they are UC related.

elsien

viksviks84 said:

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!

It’s looking at the background to decisions and saying that the original DWP decision that it was deprivation didn’t fully take those enough into account. Why the expenditure was made and looking in more detail at the intention behind the decision  and whether the intention was to deliberately spend money or receive the inheritance and small amounts in order to receive benefits. 

so just taking one factorthis case into account  it looks to me (as a non-expert(. there was evidence that an expensive holiday had been planned before the inheritance was known about so it was still a reasonable for that to go ahead.

itsthelittlethings

Did you lend her the money in cash or in bank transfers. Either way for that amount of money to build up, you would be able to show “£500” out, cash or “£500” out bank transfers on bank statements. Or have you paid for things for her she really needed, such as a new washing machine or building works? This is very messy and sounds like it’s going to be difficult to prove the debt.

viksviks84

pmlindyloo said:

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

No just basic state pension, no pension credit or anything else

viksviks84

itsthelittlethings said:

Did you lend her the money in cash or in bank transfers. Either way for that amount of money to build up, you would be able to show “£500” out, cash or “£500” out bank transfers on bank statements. Or have you paid for things for her she really needed, such as a new washing machine or building works? This is very messy and sounds like it’s going to be difficult to prove the debt.

My mum has always lived alone and struggled to get by when ad hoc expenses occur.

The money I loaned her goes back 20+ years, so I can't get bank statements.

viksviks84

I'll add some context.

A few years ago I purchased a sofa for her in SCS, I should have the receipt for that, but I never knew I would need to keep it.

I've bought other things like a vacuum cleaner and paid for vet bills.

I moved to Jamaica last year and I'm not on the kind of salary I was, so when the inheritance came through, my mum gave me money to buy a car, although it has been registered in her name.

We have an invoice for the car that my mum bought with the money loaned by my aunt, so that can be proved. 

She also used some money to book a flight out to visit me at Christmas. Again, this can be proved, but I'm not sure if it was allowed.

I can see her using all her inheritance to pay rent/council tax then god forbit in 3 years she needs a new car as she won't be able to buy one. 

She is the youngest of her siblings, so they can't help her and I won't be able to. Such is life I suppose! 
 

viksviks84

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.

My aunt is wealthy. I used to sell shares to help my mum out or would buy her things out of my disposable income, but I used all my savings when I moved to Jamaica.

HillStreetBlues

viksviks84 said:

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?

When capital is over a certain about meaning less or even no income related benefits it's normally expected that the person uses their capital to fund day to day spending until the capital reduces. With an inherence it's not expected to use all the money that way but they would be expected to use some of it. For instance a person might buy a better car as a treat than would normally be accepted

viksviks84

bazdvd said:

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?

About 2-3k.  I bought her a sofa from SCS that was about 3k, I think I have the invoice and the delivery address was hers, so hopefully that will count

itsthelittlethings

State pension, housing benefit and council tax benefit adds up to an ok amount. She should be able to afford to live. She may not be taking any flights to visit you. If you want to support her research local organisations which support people on low incomes, sometimes there are food pantries which as not food banks as such. Age Concern might also be able to help with advice.