UC and Inheritance

[Naffington]

I have an adult son who has autism and lives in a rented flat with support from LA. He is determined as having limited capacity to work and gets UC and housing benefit to cover his rent.

I suspect from what has been said that an elderly relative may have left him around £50k in her will. I’m concerned about what will happen should this money appear. He would obviously lose his UC/HA and use the lump sum to pay his rent, utilities and other living costs. It’s not going to last more than a few years so my question is what happens once it’s gone? Does his financial appointee (currently me) go back to UC with the details of the rent etc that has been paid from his lump sum and proof of this spending, and ask for his benefits to be reinstated? It’s causing me some anxiety as the money won’t last forever. Alternatively, if we were to help him buy a property outright in joint names by adding a significant amount to his capital, how does this affect his UC going forward? Thanks

You'll have to reapply for UC once his savings run low.

If you buy a house he loses the housing element but he won't be paying rent.

He doesn't have to be careful with the money while he has it, he can buy anything he wants, have holidays etc. They don't check what you've spent your money on and say you haven't been frivolous enough.

I think you need to talk to the relative if they still have capacity. If they don't have capacity it is possible to apply to vary a will if all legatees agree.

What would be best for your DS would be for the money to be left in a trust administered by you which allows you to make financial gifts to him of amounts that are low enough not to trigger a change in his UC claim. Obviously that arrangement can only last as long as you yourself are alive and capable of this - presumably at that stage the capital in the trust can be combined with your own assets and used to set him up with an appropriate property with appropriate provision to deal with management and maintenance etc.

Thanks so much for the replies. Sadly, I don’t think this relative has got long. She’s in hospital and dropped this bomb on me yesterday when I visited. I don’t think there would be time to alter anything, and she’s starting to show signs of confusion. Not about money though!

Interesting to know that he can spend it on what he likes. He could probably do with new furniture etc.

If we buy him a small flat and put this money towards it would he still be able to get the UC part for living though? We always intended to do this once our pension lump sums were payable, so that could be an option. Could we buy it as some sort of trust so he isn’t vulnerable to being scammed when we are no longer around? It’s all such a worry.

I have a similar situation with a sibling rather than a son, I have LPA of them.
I have been advised I can put the money in a trust for them, and this does not have to be declared or affect any means tested benefits including UC. There are various trusts but one that is best for us is a vulnerable persons trust.
worth speaking to a solicitor if you can.

Have a look at Mencap Trust.org.uk. I don’t know if your son would be eligible but definitely worth giving them a call.

Thank you, I’ll look into this.

It isn’t true he can spend it totally on what he wants, if he spends wildly he could be seen as having deprived himself of capital to claim benefits. Rent, living costs, holidays which are within reasonable costs all fine, round the world cruises first class, expensive restaurants 7 nights a week may cause an issue.

@Naffington if your long term plan was to buy him a home and you can afford to bring that plan forward I would get legal advice to see how feasible this is. It would give him long term security, it’s a good use of the inheritance and would actually save the tax payer money in the long term.

@Propertylover that wasn’t my question. If it was possible to bring it forward we would have done it already. We are very aware of what he costs the taxpayer. I just knew this would be mentioned so thank you for stating the obvious. 🙄 He didn’t choose to be disabled

@Naffington you stated “If we buy him a small flat and put this money towards it would he still be able to get the UC part for living though? We always intended to do this once our pension lump sums were payable, so that could be an option. Could we buy it as some sort of trust so he isn’t vulnerable to being scammed when we are no longer around? It’s all such a worry.”

I have a disabled relative who went through this and couldn’t afford to buy a home even with family help. So they ended up using the inheritance to pay bills.

I was therefore responding to your comments and supporting your plans. I suggested legal advice as they would need to be involved if you wanted to set up a trust and can advise the best option.

I actually think the government is very short sighted on enabling those on long term benefits due to disability to buy a home. For example £1k a month on rent for 50 years is £600k. In some parts of the country £150-£200k would buy a home for life.

Benefits are there to support people who need it. Disabled people don’t magically become undisabled so I most definitely wasn’t having a dig at your son but at the government for their lack of imagination.