My parents both receive benefits. They are very vague about which benefits they receive but both are unwell and they have custody of a their grandchild (my nephew who is 5) so claim some sort of sickness benefits plus child related benefits.
Since the rules changed on pensions they have been taking an annual lump sum out of a pension and spending it on Clothes/holidays/cars etc. The money usually lasts around a month. This year they took a larger lump sum and purchased their council house. House was paid for in cash and they have none of the money left.
They’ve had a letter saying that all their benefits have been stopped due to them having undeclared income/over the threshold. They’ve rang dwp and told them they don’t have any money left as they purchased the house and were told to send evidence of this to get benefits reinstated and back pay.
Does anyone know what the rules are on this? It just doesn’t seem right that they withdraw tens of thousands each year yet claim zero income but they are adamant that it doesn’t count as it’s been spent on the house.
The benefits have been stopped a few times in the past for previous lump sums (which were spent on luxuries) and they did get reinstated which I wasn’t expecting.
They are both really confident the money Stopped will get repaid and haven’t considered that they have zero income now and no savings.