Universal Credit Review and Undeclared Inheritance

jasonwatkins

I'll try and keep this concise but I might end up waffling.
 
I lost my mother to cancer late last year and received an inheritance totalling £15k.  I could probably go in to detail about my state of mind in relation to how I've handled things this year after losing mum but I understand in this situation it wouldn't really be relevant.

Needless to say, planning for the future didn't happen and I made my way through the money until I had only a couple of thousand left.  I replaced all of my kitchen appliances, I bought a new computer (which I think I got ripped off over but that's another story..) and even booked a short cruise for November this year.  There's been more as well, and a lot of it I probably won't be able to prove.

My Universal Credit review is probably 3/4 years overdue as it is but I received the call this morning and they want the last 4 months of bank statements.   

When I go back over those statements, that £15k balance is there right at the end in May, but it's followed by multiple large withdrawals over the following months until there's a couple of grand left and it's remained fairly "normal" since then with just regular day to day expenses.  On the face of it, I think you could certainly argue it looks like I'm trying to "dispose" of the money as quickly as possible but that certainly wasn't the case.

I'm currently trying to get an appointment with my local Citizen's Advice and I understand that each case would likely be treated differently but would anyone have any insight as to what might happen?

I could say there was certainly no ill will or intent to hide anything, which there wasn't, but, again, I know this probably won't be relevant as I know I'm likely going to be in some kind of trouble.

Grumpy_chap

jasonwatkins said:

I'll try and keep this concise but I might end up waffling.
 
I lost my mother to cancer late last year and received an inheritance totalling £15k.  I could probably go in to detail about my state of mind in relation to how I've handled things this year after losing mum but I understand in this situation it wouldn't really be relevant.

Needless to say, planning for the future didn't happen and I made my way through the money until I had only a couple of thousand left.  I replaced all of my kitchen appliances, I bought a new computer (which I think I got ripped off over but that's another story..) and even booked a short cruise for November this year.  There's been more as well, and a lot of it I probably won't be able to prove.

My Universal Credit review is probably 3/4 years overdue as it is but I received the call this morning and they want the last 4 months of bank statements.   

When I go back over those statements, that £15k balance is there right at the end in May, but it's followed by multiple large withdrawals over the following months until there's a couple of grand left and it's remained fairly "normal" since then with just regular day to day expenses.  On the face of it, I think you could certainly argue it looks like I'm trying to "dispose" of the money as quickly as possible but that certainly wasn't the case.

I'm currently trying to get an appointment with my local Citizen's Advice and I understand that each case would likely be treated differently but would anyone have any insight as to what might happen?

I could say there was certainly no ill will or intent to hide anything, which there wasn't, but, again, I know this probably won't be relevant as I know I'm likely going to be in some kind of trouble.

Sorry for your loss.

Is the £15k inheritance the total of your savings, or did you have more from other sources / prior to receiving the inheritance?
Are there any disregards to be offset against the total capital you have?

It would be for a DM to determine, but the items you have spent the inheritance on may not be deemed unreasonable. 
The devil can be in the detail, and depends in part on the need for the replacements and standard of the replacements.  A new fridge when the old fridge stopped working would be fine - a new fridge for several £K might be seen as unreasonable.

Others may be able to advise how to present the failure to report change in circumstances when the capital increased above £6k.

itsthelittlethings

Best case scenario I think is that you will be asked to pay back any overpayment.

rosewalk

Grumpy_chap said:

jasonwatkins said:

I'll try and keep this concise but I might end up waffling.
 
I lost my mother to cancer late last year and received an inheritance totalling £15k.  I could probably go in to detail about my state of mind in relation to how I've handled things this year after losing mum but I understand in this situation it wouldn't really be relevant.

Needless to say, planning for the future didn't happen and I made my way through the money until I had only a couple of thousand left.  I replaced all of my kitchen appliances, I bought a new computer (which I think I got ripped off over but that's another story..) and even booked a short cruise for November this year.  There's been more as well, and a lot of it I probably won't be able to prove.

My Universal Credit review is probably 3/4 years overdue as it is but I received the call this morning and they want the last 4 months of bank statements.   

When I go back over those statements, that £15k balance is there right at the end in May, but it's followed by multiple large withdrawals over the following months until there's a couple of grand left and it's remained fairly "normal" since then with just regular day to day expenses.  On the face of it, I think you could certainly argue it looks like I'm trying to "dispose" of the money as quickly as possible but that certainly wasn't the case.

I'm currently trying to get an appointment with my local Citizen's Advice and I understand that each case would likely be treated differently but would anyone have any insight as to what might happen?

I could say there was certainly no ill will or intent to hide anything, which there wasn't, but, again, I know this probably won't be relevant as I know I'm likely going to be in some kind of trouble.

Sorry for your loss.

Is the £15k inheritance the total of your savings, or did you have more from other sources / prior to receiving the inheritance?
Are there any disregards to be offset against the total capital you have?

It would be for a DM to determine, but the items you have spent the inheritance on may not be deemed unreasonable. 
The devil can be in the detail, and depends in part on the need for the replacements and standard of the replacements.  A new fridge when the old fridge stopped working would be fine - a new fridge for several £K might be seen as unreasonable.

Others may be able to advise how to present the failure to report change in circumstances when the capital increased above £6k.

It is important to establish whether when you received the £15,000 you had other savings. If you had a total of over £16,000 at the end of an assessment period that it may be that you were no longer entitled to UC. Also did you report the capital at the end of each assessment period? Do you use any of the inheritance to pay off debts?  I assume that you spent this money in June, July and so your savings were reducing. In deciding whether you have deliberating deprived yourself of capital UC should look at why you have done this (your intention) and the reasonableness of the purchases. It may be reasonable to replace kitchen appliances if the existing appliances were very old, had stopped working or needed expensive repairs. it may be reasonable to replace a computer if your existing one had issues particularly if you need to use a computer for job searching. As previously stated each case is treated individually. 

jasonwatkins

Thankyou for the replies.  I'll try and "at" everyone rather than a huge multi-quote.

@Grumpy_chap

Firstly, thankyou.

The £15k was a total of a number of insurance policies that paid out on Mum's passing.  Before that I had no savings or any other kind of money to speak of beyond what I was receiving in benefits.  At best I might have had about £500 in my Monzo savings pot.

As far as the kitchen stuff goes, while the stuff I had was old I suppose it still worked and didn't explicitly need replacing but I did anyway.  I also did go to Amsterdam in May which set me back around £2k in total but that was always on a promise I'd made Mum that I'd go there again one day.  

That I had a heart attack while I was there after my first time out of the country in 30 years is probably some kind of irony.

@itsthelittlethings

I'm quite prepared to pay back anything they think I owe and I think if that's the only outcome I would certainly consider myself quite lucky.

@rosewalk

As I said, I had no other savings and I never reported the inheritance at any point.  I think in my head I was "safe" as it was below £16k.

Thankfully I don't have any debts as I do try and manage my money fairly well but I've never really had the kind of money I've had this year.   The computer situation, sadly, would almost certainly be described as unnecessary and "frivolous" because I had originally sold my PC and bought an Apple Mac Mini for £2.5k.  I sold it at a loss about 6 weeks later and bought the new PC.

It was a very stupid thing to do and I'd certainly take it back if I could.

tacpot12

You seem to have spend some of your inheritance more wisely than other parts of it. You also seem to have not declared your saving that were above £6,000, as savings of more than £6,000 affect your UC calculation. 

The DWP response is likely to be to ask you to account for your spending. They will then consider whether the spending was reasonable under the cirucumstances. I hope they will make some allowance for your losing your mother, but mostly they will consider whether it was reasonable or not on its own merits. 

If any of your appliances needed repacing due to age, you might try to account for the expenditure based on how old these appliances were. You might have emails that show when you bought them, or might be able to remember. It's not unreasonable to replace appliances that are more than 8-10 years old when you have money, even if they are still working. I've just replaced a 21 year old boiler that is working fine today, but might not be next winter. 

Your short cruise is also reasonable if you haven;t been able to take a holiday in years. 

£2500 on a computer isn't reasonable when a £700 one would have done fine. 

So they will categorise the expenditure into reasonable and not-reasonable, and will decide what capital they think you had at each assessment date. They will then recalculate your UC to workout if how much you were overpaid and ask for the overpayment back, which they will deduct from your UC.

You should get a letter about their decsion, saying what they expenditure they regard as reasonable and what is unreasonable. You can ask for a Mandatory Reconsideration of their decision you think they have been too strict or not taken your statements about the condition/age of your appliances into account or your need for a holiday. I think they should also take some spending on a computer into account. Computers do slow down over time, and Windows 11 is driving the need for higher harderware specifications. 

jasonwatkins

tacpot12 said:

You seem to have spend some of your inheritance more wisely than other parts of it. You also seem to have not declared your saving that were above £6,000, as savings of more than £6,000 affect your UC calculation. 

The DWP response is likely to be to ask you to account for your spending. They will then consider whether the spending was reasonable under the cirucumstances. I hope they will make some allowance for your losing your mother, but mostly they will consider whether it was reasonable or not on its own merits. 

If any of your appliances needed repacing due to age, you might try to account for the expenditure based on how old these appliances were. You might have emails that show when you bought them, or might be able to remember. It's not unreasonable to replace appliances that are more than 8-10 years old when you have money, even if they are still working. I've just replaced a 21 year old boiler that is working fine today, but might not be next winter. 

Your short cruise is also reasonable if you haven;t been able to take a holiday in years. 

£2500 on a computer isn't reasonable when a £700 one would have done fine. 

So they will categorise the expenditure into reasonable and not-reasonable, and will decide what capital they think you had at each assessment date. They will then recalculate your UC to workout if how much you were overpaid and ask for the overpayment back, which they will deduct from your UC.

You should get a letter about their decsion, saying what they expenditure they regard as reasonable and what is unreasonable. You can ask for a Mandatory Reconsideration of their decision you think they have been too strict or not taken your statements about the condition/age of your appliances into account or your need for a holiday. I think they should also take some spending on a computer into account. Computers do slow down over time, and Windows 11 is driving the need for higher harderware specifications. 

Thankyou, that's very helpful.  This might be a how long is a piece of string question but do you know if it's likely I'll ever get a face to face with anyone over this or could I request one ?

Northern_Wanderer

I doubt that a £2k trip to Amsterdam could be reasonable. 

Citizens advice will probably tell you what you are reading in people's replies here.

Why did you make cash withdrawals rather than pay by card for large expenditure?

jasonwatkins

Northern_Wanderer said:

I doubt that a £2k trip to Amsterdam could be reasonable. 

Citizens advice will probably tell you what you are reading in people's replies here.

Why did you make cash withdrawals rather than pay by card for large expenditure?

That's the thing, I didn't actually make cash withdrawals.

When I look at the month to month statements, there was a lot of transfers in to and out of pots but there were also transfers to paypal for various things.

I got involved (for good or bad) in the Reddit "Borrow" sub and lent sums of money to people for a time.  I got most of it back, thankfully, but I'm probably about £2k down on that overall as well.  

Altior

As others have suggested it will be down to interpretation, but it seems implausible that you needed to change all of your kitchen appliances, buy a new computer, and book a costly holiday for the end of the year, all at the same time as coming into some unexpected money. And perhaps only realised this could be a problem and you needed to have declared the 'windfall' once receiving a call from the DWP, and they've asked for bank statements.

Perhaps you'll get some leniency for your loss, especially for the holiday. For me it's difficult to correlate a lot of that activity with grieving, but it's not up to me. I think it's perhaps in your favour that your capital/savings have seemingly dropped way below the £6K threshold. 

Muttleythefrog

Agree with all of above..... there's a lot for DWP to unpick here to figure out overpayments. Obviously the inheritance should have been reported as materially affecting entitlement but in your mitigation you had faced major loss and no doubt administrative complexity at time. Take the line you have here of saying you are happy to pay back any overpayments they calculate. The issue of reasonable spending is a one often discussed but we get little in the way of feedback to get guidance on how they might determine these things and there is a strong element of subjectivity. I could offer my comment on those items of expenditure and turn out completely in contrast to DWP. Significantly your inheritance wasn't enormous... it kept you apparently still within claim limits which could keep things simpler in continuity of claim as any issue of overpayment or dwindling considered capital (as they may assess you to still possess some you spent unreasonably but over time this will diminish) plays out. Let us know what happens if you can.

Often we'd suggest Citizen's Advice but in this case I'm not sure there is anything much they could help with at this juncture. Ball will be in the court of DWP to determine what ills are present and need resolving and until they conclude on that you have no decision to deal with or contest... or indeed to ask for advice or help regarding. It may be that by the time of an appointment with CAB however you get that DWP decision but that could be delayed if they need more documents and look further back in time in this review which obviously is likely to escalate to determine overall overpayments.

Is this such a case where the UC rule on paying debt always being acceptable could (from the information above likely didn't happen) have been used to avoid some issues I wonder. Pay for goods, services with Credit Card, pay off debt from bank account. DWP may never see the credit card statements to determine any unreasonable spending but even if they did could one argue you didn't spent any inheritance but acquired debt instead which was then paid off with inheritance. (One wonders - it's a debate we've had on MSE before but AFAIK we've seen no outcome of a legal test case)