Inheritance and universal credit

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81904608#Comment_81904608

There is no ruling that states you have to buy a low cost car, £4k is pretty low cost these days.
What needs to be looked at is reasonable for a 2nd hand car https://www.autotraderinsight-blog.co.uk/auto-trader-insight-blog/used-car-prices-analysis-april puts that figure at £17k asking price ( selling price would be cheaper.

All the person would need to do is show it's reasonable for a person to pay that money, a DM would not only have to show that price was unreasonable but also it was purchased to increase the amount of UC.

Bowey123

From what I am reading there is no obligation to be frugal and DM has to prove you spent just to increase your benefit entitlement. That must be difficult to prove surely?

Eg if I received a windfall (not on benefits) I may want a really good holiday. Why shouldn’t a person on benefits be able to do the same thing. Surely this is something the testator would want?

Altior

For me that is much more straight forward.

If you inherit £100K and spend the first £15K on the holiday of a lifetime, no problem.

If you inherit £100K, 6 months later are down to £21K, and spend £15K on the holiday of a lifetime, and apply for UC when you get home, that's DoC.

It's also got to be proven. But as I say I'd like to think I would be capable enough and have the experience to be a DM. For me it wouldn't be using part of a £100K inheritance on a luxury holiday that was significant (imo that's reasonable), but when it was spent and how it correlated with applying for MT benefits.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81904786#Comment_81904786

I basically agree, but it wouldn't just be the holiday it would be how the £94k was spent.
Knocking out £96k quickly is always going to look bad, but that alone isn't proof, justifying the spending would be needed though.

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81904731#Comment_81904731

Yes, the case law CIS/1775/2007 states as much. Maybe people expect a person to be frugal, but that isn't backed up by any law, or rulings.
In that case even giving away some of the money was ruled to be fine, as the person was able to explain it with their other spending.

NedS

https://forums.moneysavingexpert.com/discussion/comment/81904731#Comment_81904731

The issue is that a Decision Maker initially does not need to prove anything to anyone in order to make their decision. They just need to set out the facts as they exist, and make an argument that they believe it was unreasonable and was done with the purpose of obtaining (more) UC.

If the claimant does not agree with the decision, the claimant must then request an MR (unlikely to succeed) and go to appeal, where they must then make legal arguments. Most claimants simply aren't capable of doing this, especially where the process of an appeal could take many months during which they potentially have no income, and no savings having just spent them on that "really good holiday".

I have seen a case where the purchase of an Apple MacBook laptop for £1500 was deemed DoC where the DM argued that Currys were selling multiple laptops for under £300 that would do the job just as well. [Rhetorical] How easy do you think it is for an unemployed person to argue at tribunal that an Apple laptop at 5 times the price is necessary and wasn't made with the purpose of reducing capital to claim (more) UC.

Altior

https://forums.moneysavingexpert.com/discussion/comment/81905307#Comment_81905307

Context is everything isn't it. For example, if they had £17.4K capital and then bought a high end laptop, and applied for UC soon after it's overwhelmingly likely to be DoC unless they have a demonstrable reason for purchasing such a 'luxury' item.

As a DM the first thing I would need is evidence that the laptop is being used by the purchaser (and not left boxed to sell on as new, if the said item is even still in their possession!) if that was permissible. And ask them to demonstrate how they use it.

They could possibly have justified it if it was related to their career and could help them get employment (or educated perhaps).

What you touch on is correct though, I don't plan to give them a reason to dig into my affairs. If they do, I will be in a position to justify every line. But it's a lot easier if they don't look in the first place!

From what I have deduced, initial UC reviews are outsourced and you can be faced with some incompetent people and unreasonable demands on the front end (eg years of statements for closed accounts!). No doubt some of them looking to be heroes.

It also seems to me there is not a great deal of upside being between £6K and £16K capital. It's just inviting possible grief and repeatedly reporting changes in the level of capital. Plus I have to be under £6K capital to get any CT support where I live.

Altior

It should be very obvious, but what I've not been able to identify yet is what happens if that individual had used a credit card to buy the laptop. For say section 75 cover. And then settles the CC liability with existing capital. As obviously paying off debt is not DoC for the purposes of UC.

Newcad

https://forums.moneysavingexpert.com/discussion/comment/81905405#Comment_81905405

Simples - With ALL DoC considerations it is the intention to claim or increase benefit that counts

Paying off an existing or an unavoidable debt would never be DoC because the debt was not intentional.

However intentionately creating a new debt to then pay off in order to claim or increase benefit would obviously be DoC.

Altior

Logically I agree, but I've not read any reference to unavoidable debt or creating new debt in UC legislation. Not to say it doesn't exist!

Even if they demanded to see your credit card statements for example (can they?), I don't know how it could be proven that the credit card wasn't used for the interest free period, cashback, or section 75 (or a combination of these), and the primary purpose was to diminish capital in regard to MT benefits. Or that you didn't use a 0% interest BNPL over 3 payments to stagger the cost.

In my own scenario I have a 0% purchases cc and all my expenditure that can goes through this, building up the balance and only the paying minimum repayment. If I apply for UC it is likely I will clear the card, as the capital I've saved is offset by the card liability (as I can earn interest off the capital). This is not DoC and not even a workaround to achieve it, but I wanted to make sure it couldn't be interpreted as such, which is why I had been looking into it (and my natural curiosity in regard to anything related to finance!)