Mum received inheritance but is on ESA & PIP

[FullofSurprises]

I need some help regarding inheritance and wondering if someone can point me in the right direction.
My mum has come into inheritance after her lifelong partner passed away and left her in his will.
She has long term illnesses and has been on ESA and PIP for quite some time.

Originally she wanted to just gift me the money as she did not want to lose her benefits but we've found out today it's not as simple as that, and that even she were to give the money away she would still be classed as having the money.

How can this be right? She never asked to be on his will and I know she would never have accepted this had she of known this would be the outcome.
She is worried now and really doesn't know what to do.
Does anybody know a way around this?

OP see a solicitor who will set up a trust for the inheritance. It should not affect her benefits if a trust is in place.

@FullofSurprises

That's what I thought *@im5050* thank you. She does get the severe disability element so from what you're saying she is screwed when it comes to reclaiming. Lovely.

@Pixxie7 what makes you think she doesn't "need" it? She does need it. She's severely disabled in many ways. She cannot work, she has been told this and it's even written on her letters telling her she cannot ever work again. Please go away.

I thought that if you were entitled to severe disability payment you couldn’t claim us and had to make a claim for old style benefits? www.turn2us.org.uk/Benefit-guides/Severe-Disability-Premium/What-is-a-Severe-Disability-Premium

I think you/she need some proper advice.

If she pays the same amount out of the inheritance to herself that she is losing in benefits how long will the inheritance money last her?

OP see a solicitor who will set up a trust for the inheritance. It should not affect her benefits if a trust is in place.

Asset protection trusts can be overturned. This isn't a solution. The companies that tell you it is are trying to make a fast buck

Hi OP, I advise on benefits (among other things) for my job.

Firstly, you need to check your mother's ESA award letter and read it carefully. The letter should state whether she is on contributory or income-based ESA. If she doesn't have a letter or can't find it or whatever, call the ESA helpline and ask them to send a copy of the most recent one. If you struggle to understand the letter, contact your local Citizens Advice and ask them to check it and confirm which type of ESA she is on (most are still closed but you should be able to email them with a scan or photo of the letter).

This is absolutely key, because if she's on contributory ESA, it won't be affected by the inheritance.

You said she's living in a council flat atm. Is she claiming Housing Benefit to cover her rent? If so, that will definitely stop when she receives the inheritance.

My advice is to look into shared ownership properties in her area (assuming that the inheritance wouldn't allow her to buy a home outright). It is within the benefit rules for her to use the inheritance to buy a house to live in. The inheritance could pay for the proportion that she owns, and provided she has less than £16k in savings (which she would if she spent most of the inheritance on the house purchase) she could continue to claim HB for the rent part.

I am sorry if I upset you perhaps the benefit system isn’t fair but you could argue the same for people who have to sell their houses to fund their social care but particularly at the moment the country can’t afford it.
You say your mum does need it if she wanted to give the money to you would suggest she does need it.

This forum is really useful @FullofSurprises

www.benefitsandwork.co.uk/forum/10-dla-esa-queries-results/127646-inheritance

NeedToKnow101
A pp mentioned the possibility of staying on it, even if the payment goes down to 0 for a while. Ive stayed on tax credits even though I don't get anything, so maybe that could work. 
I was wondering about that. So it wasn't regarded as change of circumstances requiring a move to Universal Credit? Was that fairly recent, do you mind me asking?

@JamieLeeCurtains - yes I've just renewed it for this year. Haven't been eligible for any money for over 5 years, but I heard that if I do that I wouldn't have to go on UC if i my circumstances changed.

@HoldOnToHope I meant buy it 'for her' in the sense of helping her use her inheritance to buy it - I was assuming she wouldn't be able to manage the purchase solo.

The Benefits & Work website is v good, re the link above from pp.

And what @AnotherEmma said.

Buying herself a flat to live in wouldn’t be seen as “spending it too quickly” because she wouldn’t be depriving herself of assets - she’d be swapping an asset (money) for another asset (flat). It would be a problem if she bought a flat for you to live in.

Buying a house would be a good plan and it would save claiming housing benefit
Don't forget the upkeep. She needs money for repairs, boiler service and so on

I have had clients in similar situations and in general buying a house was considered an ok thing to do and to still be eligible for benefits. Saves the council in housing benefit and is a sensible thing to do especially if she hates where she lives. You can get CAB advice or from a solicitor to check the situation hasn't changed.

Thank you @AnotherEmma that's a really good suggestion and I've put this forward to her this evening.
Do you know if she is on the means tested ESA and she is assessed at zero will this stop her claim entirely? Or does her claim remain open at zero like others have said on this thread?

Sorry @JamieLeeCurtains I misunderstood you and yes she would certainly need help purchasing, she would have no idea at all. I definitely think this is going to be the best plan going forward. She's upset she's going to lose her ESA but it's because of the change not because it's money she's going to lose, it's just change. She can't even go to an unfamiliar place without it triggering hallucinations. It makes it very difficult when things like her long term partner passing because she will continue to go to his house even though he isn't there as it's been her routine for the past 20 years.

The ESA is just something that's been a routine for her and she's scared that it's all changing, but we'll get through it and I know she'll feel more comfortable once we've purchased her somewhere to live. She's been complaining she wants to move for a while now so it's perfect timing really

Could you explain the problem to DSS and just pass the inheritance to them? Explain that your mother needs the consistency of getting her money from the same place And at the same rate. They cannot complain of deprivation of assets, it they get the money. This way, your mother will be better off overall.

@Witchlight

Could you explain the problem to DSS and just pass the inheritance to them? Explain that your mother needs the consistency of getting her money from the same place And at the same rate. They cannot complain of deprivation of assets, it they get the money. This way, your mother will be better off overall.

The DSS is long gone. It's the DWP now, with whole new regulations. Has been for a while. See above in the thread ^^

@HoldOnToHope Given your mother's high level of need, and her impending capital income, I think your local housing association might be very interested in her going into shared ownership, as @AnotherEmma suggested. A deposit is required - and she would have a significant one.

Does she have a Care Act Assessment btw?

www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/employment-and-support-allowance/help-with-your-esa-claim/esa-how-much-you-can-get/

This page has more information. The rules are different for income related ESA or contribution based ESA. Like I said in my previous post, I'm not 100% sure on the the info I gave earlier, and I strongly advise you to speak to the Citizens Advice Bureau. They will be able to help you through this.

@FullofSurprises

Thank you *@AnotherEmma* that's a really good suggestion and I've put this forward to her this evening. Do you know if she is on the means tested ESA and she is assessed at zero will this stop her claim entirely? Or does her claim remain open at zero like others have said on this thread?

Just to clarify - do you mean if she is assessed as having zero entitlement to income-based ESA? It is possible to continue "claiming" ESA without getting payments but continuing to get NI credits. www.gov.uk/national-insurance-credits/eligibility

I believe that inheritance is disregarded for a certain time after receiving it, which would allow a bit of time to buy a shared ownership property (if possible) before means-tested benefits are affected. I can't remember off the top of my head and will have to look it up in the benefits handbook when I'm logged in later.

So I've looked it up and I'm afraid inheritance isn't disregarded so it will be counted (and therefore result in ESA and HB stopping) as soon as it's received.

It's a shame that the person who left the money to your mother didn't seek advice on it because if they had left the money in a discretionary trust for her, it wouldn't have disqualified her from means-tested benefits.

Anyway do check whether the ESA is contributory or income-based.

@AnotherEmma does it stop completely? As in will she need to put a full claim back in once the money has gone? I was really hoping the claim would stay open and she could just be reassessed.

@JamieLeeCurtains adult social services haven't even contacted us since several weeks ago so no I don't think she has one in place.

I don't really like giving hypothetical advice, I would much prefer to know for sure whether it's contributory or income-based ESA she is on. This will all be moot if she's on cESA.

But if it's ibESA, it will switch to a "credits only claim" (NI credits only) which means the actual ESA claim will stop, and if her savings go below £16k at a later date, she'll have to make a new claim for ESA. I believe you can only make a new claim for ibESA if you've received the SDP within the last month. So I think that means she'd have to use the inheritance to buy a property within a month of receiving it, which seems unrealistic!

I suggest that first you check which type of ESA she's on (contributory or income-based) and if the latter, call the SDP helpline to ask if she could make a new claim for ESA more than a month after the old claim stops. SDP helpline: 08001814049.

Thank you so much @AnotherEmma you've been so very helpful! She's found her letter but can't find where it states which one she's on, but I suspect it is income based.

You're welcome! Feel free to PM me if you want me to look at the letter (you could just take a photo of the sections that don't have any identifying details).