Life insurance payout & income support

shark3r

Hi, I was a fulltime carer for my wife for about 20 years until her death 3 days ago, I am due a life insurance payout of £40,000, however I am forced to go onto income support as I am (obviously) unemployed since her death, and due to health problems am unlikely to find work.

My question is this: Will the DWP simply take my life insurance payout or refuse me benefits as this money will take me over the limit allowed (I think), as I had to give up work 20 yrs ago to care for her, I have no pension plan etc in place & this cash would look after me in my old age, also I would need to use some of it to buy & run a (cheap) car.

If the DWP do have issues with myself having this cash, is there any way to hide/lose the money to protect my future needs? maybe a trust fund for my daughter perhaps?

I am thinking of not claiming income support for a few months, "losing" the cash & then claiming, would that be feasible, or will I end up in court for fraud or be refused benefits?

After giving 20 years of my life to my wifes care (I am only 43 yrs old) I have never had the chance to get any savings put away nor afford a holiday, to be able to keep this cash , or most of it, would make a huge difference to my myself & my children, to make up for all the lost years stuck at home with a sick person.

seven-day-weekend

Hello, welcome to the forum and I'm sorry for your loss.

Usually the upper capital limit is £16000 for claiming income support. Between £6000 and £16000 there will be a reduction of IS and above £16000 there will be no payment.

I don't know whether it is different with an insurance policy or whether paying it into a pension will make any difference.

Someone will be along in the morning who will know more.

Oldernotwiser

Sorry for your loss and the added financial confusion. Could I ask how bad your health problems are because you might well be expected to go on JSA now that you're on your own, depending on your daughter's age of course. It might also be worth considering looking for a little part time job as this would occupy you and allow you to keep your nest egg. If you work for at least 16 hours a week this would be topped up by tax credits etc. Caring for your wife must have been very wearing (I know, I'm a carer) but you need now to take the longer view.
Good luck.

healy

7DW is right and you will be expected to live off this money until you are below the Capital limits. Asking how you you can "hide" it is really asking about fraud and that is not what this forum is about.

lil_me

Sorry to hear of your loss, yes unfortunately the life insurance payment will effect you receiving benefits. Have you considered applying for Incapcity Benefit with your ill health causing you to be unable to work? This is not means tested if you qualify based on NI credits etc. Loosing the cash will be classed as Deprivation of Capital and therefore it would still be considered when deciding on your benefit award. The CAB or Welfare Rights in your area would be hopefully able to advise you on what is the best action to take and what to expect.

Oldernotwiser

lil_me wrote: »

Sorry to hear of your loss, yes unfortunately the life insurance payment will effect you receiving benefits. Have you considered applying for Incapcity Benefit with your ill health causing you to be unable to work? This is not means tested if you qualify based on NI credits etc. Loosing the cash will be classed as Deprivation of Capital and therefore it would still be considered when deciding on your benefit award. The CAB or Welfare Rights in your area would be hopefully able to advise you on what is the best action to take and what to expect.

Isn't IB reliant on contributions? He's been a carer for 20 years, does that cover NI?

lil_me

As I said depends on NI credits. If he was claiming Carers Allowance his NI credits should have been paid.

Oldernotwiser

I didn't know that, thanks.

shark3r

Ok thanks for all the replies guys, I have a better understanding of this now, I should hopefully be able to claim incapacity, which will help the cashflow & maybe get some re-training done , maybe IT courses etc, which will allow me to work from home at my own pace when I feel able to do so.

For the record I have spinal problems which causes me severe nerve pain in my legs when I am standing for any length of time & also I am 50% deaf, making telephone work impossible. My speech is also impaired due to the deafness.

One last question, is DLA means tested? as I may also qualify for that, or will incapacity be my best option? (I have no idea what each benefit is worth)

Appreciate all the help given

Gillianh2

DLA is not means tested.
But you will need help completing the lengthy forms. You could contact the CAB for help with these.
IB is a different benefit and as previous poster has said it will depend on you having enough NI contributions. If you have been receiving Carers Allowance for looking after your wife, you will have had NI contributions made,

lil_me

DLA and Incapacity benefit are very different. DLA can be claimed when in work as long as you have care or/and mobility needs which qualify you for it. Incapacity benefit is for those incapable of working. Neither are means tested but IB can be effected by private pensions.

If you contact the CAB or Welfare Rights they can help you with the forms, making sure you are claiming what you are entitled to.