How do UC work out how long an amount of inheritance should last before you can claim again?

[moneyissueproblem]

Is there a formula they use to work out amount of inheritance/ family size / circumstances as to how long any lump sum should last? As obviously I’d have to come off UC as would have more than the amount allowed in savings but it wouldn’t actually last me that long and then I’d need to reclaim UC - but how do they work out how long it’s meant to last and when can you put in a new claim ?

You can put in a new claim once you are below the threshold but if you’re seen to have deliberately spent a large amount to get back under the threshold then you’ll be declined.

But how do they work that out or decide what is excessive spending and what isn’t ? Eg if someone got a new fridge and car , paid off some debts and then a few months later had to claim again how would it be decided if they spent too much too quick or if it was acceptable?

Good question

I just wondered if there is some kind of formula ? Eg they know what you were getting on UC so would They assume you’d use the same amount of money per month as they were giving plus maybe a certain percentage as additional spending within reason to work out how long a set sum should last?

Im on UC with a severely disabled child and unable to work so really this would mean we would be off UC for probably a few months as the inheritance is not enough to live off long term at all but is above the savings threshold

Anything above that usual monthly amount eg a fridge would I have to set out my case as to why I needed a new one etc ? For them to agree that it wasn’t deprivation of assets

There is no tick box answer, it’s an overall look at what is reasonable and necessary, not just spending to get back under so you can claim again.

So if you have no car and need one, then go buy a brand new BMW and put in a new claim then no not acceptable. If you have a car and just want another one, nope.

It’s not a “yes/no”, it’s a broad look at what is reasonable as an overall picture.

If it's a lot of money then buying a flat / house / car should be acceptable. It will save UC money in the long term.

Not necessarily it’s an overall picture.

So say you inherited 60k, the expectation is that should last you really quite awhile. If you’re reclaiming 3 months later they’re absolutely gong to look into that. If it’s 60k and you are trying to claim 18 months later then less so.

And they wouldn’t class that as deprivation of assets ? It’s just so unclear and I know I’m sounding ungrateful but it’s hard when it’s an amount that isn’t life changing in a good sense but is going to just cause a few months of not needing UC as it’s over the threshold

Flat/house is, car isn’t depending on what is reasonable.

You are you are believe allowed white goods. Pay off bills.. Not a cruise or gift the money away.

They can and do if it’s a car depending on the situation as I mentioned above.

If you have money away it's counted as deprivation of assets which is a shame because a lot of parents if they inherited some money might want to give a little to their DC.

They're really not that strict op. If you spend on 'normal' household spending, so replacing fridges, washing machines etc, replacing a car things like that then they aren't going to look at it as depriving. That's normal spending, just keep receipts for in case they ask. What they will look twice at is large amounts of cash being withdrawn, in case it's being hidden.

Give not have.

It’s things like the rent element which is a lot and then that itself will use up a lot of the inheritance relatively fast so it’s just going to be a cancelled claim then reclaiming as my basic circumstances won’t change in any other way

Do not stop your claim. It’s not as simple as you think.

Thanks everyone it does make sense I just assumed there would be a set formula to make it possible to work out exactly for everyone

I was expecting something like the value of the current award and up to 25% more spending allowed each month and then when that cancels out the value of the inheritance you can claim again if that makes sense

Its a good question but DWP are not transparent about how they work things out.
If you google 'how does DWP work out if spending is deprivation of assets', organisations such as Shelter and Age Concern give some useful advice. Shelter say;

''...For example, the main purpose of someone giving their capital away to a relative might be to benefit the relative, but a significant purpose could also be to reduce their capital so that they are entitled to universal credit.
Claimants have not deprived themselves of capital when it has been used to:

• pay off or reduce a debt
• pay for goods and services if the purchase was reasonable in the claimant's circumstances.''

england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules

So basically if you can show receipts for reasonable spending it’s ok but gifting large amounts or having a huge expensive holiday will be seen as a problem!

Sort of, but “reasonable” is situation dependent.

Take a car as an example

• Don’t have a car, need one, and buy a brand new BMW- not okay
• Don’t have a car, need one, buy an affordable car- should be okay
• Have a car but just want another one, even if affordable one- not going to be okay

It’s about what is reasonable for the individual and circumstances.

There isn't a formula for this.
It would be perfectly reasonable to spend it all quickly on things that will make it easier and cheaper for you to live as normal - eg if your daughter needs some kind of mobility aid or specialist equipment. Think about what you spend money on that could be cheaper if you could invest in something that would help make a better option available to you.

When a young neighbour received an inheritance she contacted UC for advice and they were very reasonable. Gave clear guidance of things that were acceptable spending - new white goods and some furnishings, some specialust things for her disabled child and also a family holiday. They also indicated a timescale that they would expect the inheritance to cover living expenses before a new claim.

It is taken on a case by case basis re spending. If it looks like you have deliberately bought expensive items to take you below the threshold that would be queried.