Large payment and UC

Thenewme

hi, I’ve posted this in investments also but I think I may need advice on the UC aspect more and the implications on what had already happened.

I’m in a bit of a strange situation, a close family member has given me a very large amount of money to invest for my kids future, massively kind and totally unexpected. Over the savings limit totally.

The situation however isn’t as simple as adding the money to their existing savings accounts. I’m part of a joint UC claim as my partner hasn’t been able to work for the last few years due to illness. He’s now been granted PIP after a battle. He had a backdated payment which is being used for much needed home improvements and taking the kids on holiday for the first time so it has pretty much gone now. I do work but p/t around school hours so things have been very tight. I’m a carer for my partner and my mum. 

I know how strict the rules are on UC and I don’t want to find myself in trouble due to not handling this properly. I’ve been so skint for the last few years that my biggest worry was dealing with the debt that has crept up on me and savings limits haven’t even crossed my mind. 

I know I can invest £9k per child in a junior ISA which will be deemed as theirs only however there is a large amount left over once I do this. What else could/should I do? I can put £6k shared in their existing account to add in next tax year I believe. I wondered about a SIPP but the max limit will still leave a lot left over. 

Any help would be greatly appreciated as I’m tying myself up in knots worrying about this. It’s a whole different level of anxiety I’m feeling! I don’t want to go immediately to DWP to discuss it and wanted to see if there were any ideas before I either return the money or close the claim. The fact that the money was ever in my account will probably lead to questions and suspicion I imagine.

we’re in the middle of a review so it won’t be picked up now but likely will at some point in the future.

HillStreetBlues

With money there is the legal owner (money in your account) and beneficial owner (the money that it belongs too) normally they are the same.
With yours they are different, you are the legal owner and your children are the beneficial owners. As they are different it's up to you to prove that you're not the beneficial owner only the legal owner.

Once you prove the children are the legal owners of the money, there is no limit on how long it can be accounts in your name.

Newcad

Is the money already in your acvount? Or is it in the form of a cheque. bond, or similar?

It would had been much better as regards UC if the relative had put the money into trust funds for each of the kids rather than giving it to you. (Or even if they had put it in the kids accounts rather than yours).

If it's already in your account that could be a problem for your UC.

Have you, or can you get grom the gift giver anything in writing that says the gift must be invested for the childrens future? For preference also saying that it is to be given back to the gifter if it isn't invested for the kids by a set date. Signed by both the gifter and yourself (and preferably witnessed by a lawyer).

Something like that would help you argue that although temporatily "resting" in your account it was never your money to use but was a gift to your children. It's less convincing if written after the gift was made, but if the money is fully invested for the kids as stated, or given back, then it might just, maybe, perhaps, be accceptable to the DWP.

Thenewme

it’s in my account already, I had no idea how much it was going to be but it exceeds the ISA limit for them both and still would leave me with over my savings allowance. I want them to benefit from the full amount. I was expecting maybe max of a grand each so didn’t think to say anything. It was a total surprise.

I’ve found a savings account with Lloyds that may fit the bill. The kids can’t access it at all and I only could in the case of emergency. It would be in their names but linked to mine. Would this work or would I be better to find a bank that I’m not linked with? I can also open a junior ISA separately to this.

I have WhatsApp messages between us that states it is for the kids future, we’re not geographically close so getting something signed together would be tricky but I can ask.

If I’m open with UC around what’s happened would that benefit me or cause more problems do you think? I owe them some money still for an overpayment last year, I’m worried that they will expect me to clear that with it but I would if needed.

Newcad

I've got to be honest snd say that if it's in your account then the DWP are going to regard it as being your money. So they will probsbly close your UC if it's still there at the end of your monthly assessment period.

You would then have to reclaim UC once the money had been invested for the kids, but that then brings it's own problem.

When you reclaim the DWP will want to know where all that money has gone so quickly.. If they get suspicious they could decide that you are trying to hide your own capital in your children's accounts, especially if you still have access to that money.

TBH your relative while trying to be generous to your children has unwittingly given you a big benefits problem by giving the money to you not to them, as you have already realised.

it would have been better if they had taken advice before simply giving the funds to you.

No condemnation of them though, they were trying to help family, but many people don't realise what effect such financial help can mean for benefits.

Sorry but I'm not sure what else I can add - anybody else have any thoughts on this situation?

Thenewme

if I’d realised how much it was going to be I’d have asked them to wait while I set up an isa for them and just asked them to contribute to that instead yearly. It’s done now so I’m just going to have to figure it out.

Sending it back is going to look suspicious too I’m thinking.

Ugh. I’m so grateful but so stressed.

My debt isn’t enough to pay off with this and then build savings back up with the extra money I had, I’d still be left with extra that’s unaccounted for. I did consider if that would work but I think that would look worse and I’d be breaking a whole lot of rules.

NedS

Do you have child's bank account(s) in the children's names? If so, transfer the monies there. If not, speak to your bank and open one and move the money there until you can pay it into their Junior ISA accounts. We had such an account with Barclays for our children until they turned 18 (other banks are available)

Regarding your partner's backdated PIP payments - these are disregarded for 12 months, and if the total back payment was larger than £5,000 then it is disregarded for the lifetime of your joint UC claim. You still need to declare it, but state the source and ask for it to be disregarded indefinitely.

HillStreetBlues

If the "very large amount of money" is over £16k & bank knows you are on UC then under the new regs it be be flagged to the DWP that you are over £16k.
The the DWP would do a review.

Thenewme

I do have accounts for them but they’re just regular online accounts and not with the bank the payment is sitting in. Moving it multiple times feels shifty somehow. The ISA limit is less than I have to move to them and would leave me with a hefty amount left over. I’d love to set up an ISA each and put the remainder into a savings account in their names to move over each tax year if possible,

The payment is way over £16k 🤦‍♀️. The bank it’s with have never had a UC payment into it so I’m not sure that they’d know.

Robbie64

If you are in the middle of a review, why would the amount now in your bank not be picked up? The review team could ask for up to date bank statements which will show the amount currently in your bank.

As posted above you need to get the monies into the correct bank accounts / ISAs as quickly as possible.

Thenewme

it could be picked up but I’ve submitted the bank statements already, the money only came in on Friday night.

I’ll set up the savings accounts tonight for them and move the money over asap. I’ll mention it at my review and see what they say. I’ve been willing for money to come in for so long as it’s been so hard and now I’m so stressed over it.