Benefits, inheritance & buying a house? So confused!
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CottonTail1322
Posts: 20 Forumite
First post here so hope all this is ok to ask and someone can help me. I'm so confused and emotional about this but I will try my best to keep it simple.
As a quick run through of our benefits; I get PIP at higher rate for both components, my husband gets carer's allowance and together we claim income related support group ESA, housing benefit, child tax credits for our 3 children and child benefit. My husband had to give up his career to become my carer after a rapid and steep decline in my health, it's been a tough few years and we'd resigned ourselves to the fact we'll never own our own home etc, but we are unbelievably grateful for the help we receive from benefits.
Today we saw my husband's gran who is in the last weeks of her life due to terminal cancer, and she told us she is leaving us enough money in her will to purchase the house we currently rent (the house is also on the market to be sold, it has been for over 3 years now).
My question is, if this does happen - and there's a possibility it won't, she's a little foggy with her memory and mental dexterity now - how would it work? If we suddenly got that amount of money in the bank and then spent it on buying the house, would that be ok or would we be expected to live on that money and therefore be classed as wasting the money - deprivation of capital I think is the phrase my sister mentioned?
It's all very confusing and obviously upsetting to think about, but we want to be prepared for what will be expected of us, rather than just blindly walking into trouble with this.
It would obviously be lovely to own our home and then we wouldn't be claiming housing benefit, but I also realise that it's a huge amount of money and there is every possibility that we would (understandably and in all fairness) be expected to live on that money until it ran out or fell below the threshold of savings allowed.
Sorry for the odd hour, I'm waiting on my painkillers kicking in and it's all just running round in my head and Google has been no help so far! So many thanks if you got through all of that without falling asleep!!
As a quick run through of our benefits; I get PIP at higher rate for both components, my husband gets carer's allowance and together we claim income related support group ESA, housing benefit, child tax credits for our 3 children and child benefit. My husband had to give up his career to become my carer after a rapid and steep decline in my health, it's been a tough few years and we'd resigned ourselves to the fact we'll never own our own home etc, but we are unbelievably grateful for the help we receive from benefits.
Today we saw my husband's gran who is in the last weeks of her life due to terminal cancer, and she told us she is leaving us enough money in her will to purchase the house we currently rent (the house is also on the market to be sold, it has been for over 3 years now).
My question is, if this does happen - and there's a possibility it won't, she's a little foggy with her memory and mental dexterity now - how would it work? If we suddenly got that amount of money in the bank and then spent it on buying the house, would that be ok or would we be expected to live on that money and therefore be classed as wasting the money - deprivation of capital I think is the phrase my sister mentioned?
It's all very confusing and obviously upsetting to think about, but we want to be prepared for what will be expected of us, rather than just blindly walking into trouble with this.
It would obviously be lovely to own our home and then we wouldn't be claiming housing benefit, but I also realise that it's a huge amount of money and there is every possibility that we would (understandably and in all fairness) be expected to live on that money until it ran out or fell below the threshold of savings allowed.
Sorry for the odd hour, I'm waiting on my painkillers kicking in and it's all just running round in my head and Google has been no help so far! So many thanks if you got through all of that without falling asleep!!
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Comments
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Having looked at the Decision Makers Guide for ESA - capital - it appears that there is no disregard for receiving an inheritance and buying a house with the proceeds.
Therefore is could be seen as deprivation of capital if you bought your rented house.
Deprivation actually arises when you have used the capital so that you can continue to get more/the same benefits. This what the DWP has to prove.
There is one section which you could possibly use:
52843 Claimants or partners have not deprived themselves of capital for the purpose of
getting benefit or more benefit if they
1. say exactly what they are going to do with their capital and
2. are told by the DWP it will not affect the amount of benefit they can get and
3. do what they said they were going to do with their capital.
So, if/when it happens you need to declare the money and then telephone and ask the DWP if you could buy a house with the inheritance. It is vitally important that you get the decision in writing (it would probably have to go to a a decision maker anyway)
Good luck!0 -
Deprivation actually arises when you have used the capital so that you can continue to get more/the same benefits.
But if they bought the house they would no longer get housing benefit so that the amount received in benefit would be less rather than the same or more?
http://forums.moneysavingexpert.com/showthread.php?t=5145236 - post 19 seems relevant.0 -
But if they bought the house they would no longer get housing benefit so that the amount received in benefit would be less rather than the same or more?
http://forums.moneysavingexpert.com/showthread.php?t=5145236 - post 19 seems relevant.
Very useful thread
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1) While the estate is waiting to be settled you are not yet the legal owner - although you will be the beneficial owner. The capital is disregarded.
2) Once you receive the capital you will be the legal and beneficial owner - it is counted in full.
3) Get in writing from the DWP that spending the capital on a house isn't deprivation. If they confirm in writing in advance then it isn't deprivation - even if the advice in the letter is later found to be wrong.
When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.These are my own views and you should seek advice from your local Benefits Department or CAB.0 -
Just to add that the PIP, Carer's Allowance, CTC (apart from any interest earned on the inheritance) won't be affected.Alice Holt Forest situated some 4 miles south of Farnham forms the most northerly gateway to the South Downs National Park.0
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Housing_Benefit_Officer wrote: »1) While the estate is waiting to be settled you are not yet the legal owner - although you will be the beneficial owner. The capital is disregarded.
2) Once you receive the capital you will be the legal and beneficial owner - it is counted in full.
3) Get in writing from the DWP that spending the capital on a house isn't deprivation. If they confirm in writing in advance then it isn't deprivation - even if the advice in the letter is later found to be wrong.
When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.
It would be very unusual for the DWP to comment on a hypothetical situation, and I would be very surprised if they would commit to an answer on this. Once the money hits the claimants account it will be taken fully into account, so any Income Related benefit would be affected. As the amount is said to be enough to purchase a house I think it's safe to say that IR benefits would cease.
I don't believe that using the money to purchase a property to live in would considered deprivation of capital.0 -
When my mother passed away it was over a year before I received my inheritance I was receiving ESA at the time I informed esa straight away when I received the cheque but left my claim open for national insurance contributions only,
I had always intended to buy a home with this money so I asked dwp if this would be ok and was promptly told no this would be classed as deprivation of capital.
I looked into this myself as I thought how can this be right the information I received from various organisations seemed to be hit and miss as this seems to be a grey area and my largest problem was the fact I was not in receipt of housing benefit before receiving the inheritance.
I put everything in writing and asked for a decision in writing this came back as indeed if I spent the money on a property and then claimed any future benefits this would indeed be classed as deprivation of capital the decision was made on the fact I had been happy to live were I was for 16 years and there was no reason for me to move.
I appealed this decision on the grounds the property I live in has now become totally unsuitable for my needs but they still wouldn't budge.
I have since registered as self employed and am making enough money to live on I intend to still buy a property but I can only hope I never have to rely on benefits again.
My advice when you know you are getting the money and roughly how much it is do the maths work out what is best may be better buying something cheaper leaving you with a cash amount you can comfortably live on.0 -
Really? Never come across a case of a single person on full benefit deciding to buy a large 3 bedroom house beyond their needs with the intention to rent the other two rooms? Or are you saying that even in this instance of intending to make it a business, it would have been granted? This is an example, but I find it hard to believe that EVERY requests made during that period of time would have been deemed acceptable.When someone buys a home with their inheritance in 27 years in benefits I have never classed this as deprivation.0 -
double post0
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Have you considered that once you bought your house you will be responsible for all the repair bills.- repair the roof, repair the boiler, buy a new boiler etc
You will also need building insurance.
Will you have enough extra money to cover these in the future?0
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