Savings and benefits query

[benefitsquestion]

Yes, for traffic. I know iabu.

A family member is about to receive £23k in backdated pay after they won an equal pay claim.

Over the years (since she and her abusive ex husband split) she has borrowed around £10k from family members for moving costs, car, furniture, carpets & a holiday.

She works and has a disabled son. She claims housing benefit.

If she had been paid correctly in the first place she probably wouldn't have had to borrow this money.

My question is would dwp see her paying the money back now as deliberate deprivation of assets? Would she be investigated?

IOU's were written but there's no receipts for anything that I'm aware of as she didn't think to keep them.

She does owe this money but proving it might be tricky.

How was she paid the money? Can she and the lenders show payments in/out of their accounts?

She should gather all the evidence, including a letter from each of them and then report it to DWP ASAP.

Several different ways unfortunately and it's been over a few years. Things like buying a car for her (and paying related costs), a lot of cash used and no records kept except iou with a note of the amount.
It wasn't considered at the time it would matter as she didn't realise this would be a situation.

The more recent things the lenders could probably show the amount coming out of their account.

If she'd been paid correctly in the first place, her benefit entitlement would have been lower.

If it's just HB that she's claiming, she needs to contact the local authority, not the DWP. She'll only be investigated if she doesn't declare the money. They'll find out anyway through data matching. When she declares it she can ask for their agreement that repaying the debts will not be deprivation of capital.

Baggy is right: if it's just HB then nothing to do with DWP. She would need to contact council. If she IS claiming benefits: she really needs to speak with the DWP. I don't think she would be 'investigated' any more than the average claimant when circs change: they will ask for the information they need to assess the claim, and if she can't provide it then they will try and work around it - in so far as trying to get alternative proof/info.

She probably claims tax credits as well as housing benefit so she will need to notify the tax credits helpline as well as the council.

I would advise her to gather as much evidence as possible of the loans and visit/contact Citizens advice.

Ok so its the council, that's great.

She receives carers allowance for her son but as far as I can see, that's not affected by savings anyway.

For the majority of the time that she was underpaid she wasn't receiving benefits. Potentially she could have saved that amount and funded starting over away from exh herself. Obviously there's the potential she could have spent it as well so it's a moot point 🤷🏼‍♀️

It just seems like she's been dealt a hard blow as even after paying this money back she could be assessed as still having it and lose her housing benefit.

@AnotherEmma I don't think she works enough hours for tax credits. Her disabled son isn't a child so no CB or CTC for him.

Well I'm a benefits adviser and I don't think she should lose her housing benefit but she will need some kind of evidence of the money owed. This could include written statements, receipts and/or bank statements from the people who paid for things and lent money.

You say she works and claims Carers allowance, I assume she is working part time and earning less than £120/week otherwise she wouldn't be entitled to CA.

Her son must be getting DLA which won't be affected at all.

Oh sorry cross post!
He gets PIP then

@AnotherEmma she has IOU's for the amounts. I'm hoping that will be enough. She doesn't want to do anything wrong but obviously owes this money. She suffers from anxiety and depression herself and said she would rather lose her housing benefit than be called into a meeting as she would find it too stressful.
Yes her son gets PIP.

If it's received as a lump sum, she will probably be treated as that being her earnings for 1 month, after that it will go back to whatever she really earns. She will probably lose CA for that month and any other benefits. Is she on UC? If she is, then they will be notified by HMRC of her income for that month. She will have to contact CA. Savings over a certain amount (£8k?) then start to reduce payments. But if she's paid off people with £10k of it, that's £12k left, If £4K is put onto a pension then that would leave her under the limit and be a good move for protecting her future. She just needs to contact everyone relevant and explain the situation, see what they need as evidence of IOUs.

Ironically enough, it's the local authority that underpaid her for years.

That sucks! Just seen it's £23 not £22k.

Unless it's earned income from a job, Tc won't want to know. You can have as many savings as you like.

@RomanyQueen1 that's true for tax credits, but not for housing benefit.

She might have an issue, you can only earn a tiny amount and claim Carers, think it's like £120 a week, but best check, That amount divided up may have pushed her over the maximum amount.

@AnotherEmma another question. Would this payment be counted as a change in circumstance and force her onto UC?

No

NB It would for her onto UC if it caused her HB claim to end, because she would then have to claim UC if eligible. However it shouldn't cause her HB to end - depends on the calculation though and I couldn't confirm for certain without more info. That's why she needs to visit/contact Citizens advice really.

for force

Ok, that's what she'll do. She'll also phone local authority ASAP and let them know about the payment due and money owed to see what they say.