Deprivation of capital

[Ringley]

Can anyone recommend a good solicitor to advise on benefits please?

My very ill friend is on UC and about to come into a moderate inheritance. She'd like to discuss her options.

If it helps, I'm about to get £7.5k reimbursement and am on UC. I spoke with the DWP and said the day it comes in, it's coming straight out to pay for an accessible bathroom. The guy assured me that that was fine, it wouldn't matter if the money was in my account for a few days, I'm spending it on a reasonable expense and wouldn't be seen as a deprivation of assets.

Yet. Absolutely worst advice. Penalties for this are getting harsher all the time. And should they so choose the DWP can take months if not in excess of a year to pull someone in for a IUC for benefit fraud. This often bites someone way after they think they've "got away with it" People also forget proven deliberate benefit fraud can carry a criminal conviction as well as the financial penalties. All the overpaid benefit to be paid back, plus a penalty on top, plus the conviction and potential custodial/suspended sentence. So how are they accessing their inheritance? In cash presumably as any big transfers from a third party, relative, friend will also be flagged. Routine random UC checks will also require submission of historical bank statements.

Might be best if she goes to Citizens Advice to review what she can and should do.

Your example is fine, a perfectly allowable use of capital as you've been advised. You also got advice immediately. Your sum is also within the capital limits, with only 1.5k subject to deduction and in your case as you know its fine because of what you are using it for, so no deduction to apply.

Well you either have the money given to someone else or you stop taking UC. There's nothing to navigate. Once you've got £6k it starts to reduce then on 16 it stops.

Very brave, the other person now has the inheritance and the person who actually inherited it can't make a fuss if they run off with it, or just refuse to give it back. I hope it's a very close very reliable relative in very good health! And if caught they will both be in trouble, I hope the 'someone else' realises that.

"The decision as to whether deliberate deprivation has occurred can only be made after the money has been spent. It sounds like a ‘Catch 22’ situation, and in a way it is, but only because it’s so complex."

Not necessarily true. There are specialist advisors within the DWP. I have a case open right now about potential inheritance. Basically, we thought my DH may inherit because of a law of the country his mother lives in, but the will clearly intended that his mother should have all the money, and she needs it to move back here. So the DWP are seeking advice of whether giving up the inheritance in these circumstances is deliberate DoC. As it happens, we think the will may state that UK rules should be used, so DH won't inherit anyway, but we wanted to be really transparent.

Also, clause H1842 of the Decision Makers' Guide for Universal Credit says that a claimant has not deprived themselves of capital if they:

1. Say exactly what they are going to do with their capital and
2. Are told by a DWP officer that it will not affect the amount of UC they can get and
3. Do what they said they would do with the capital.

So people can get advice before they spend money, in order to make sure it won't be seen as DofC.

How is deliberately entering into a deed of variation of a will not deprivation of assets? Mind boggles. They need to close these loop holes.

Just to be clear I wasn't offering this as advice. I was just pointing out that the fact that wills are public is irrelervant as DWP are not routinely checking them.

What will get you caught is not the will but unexplained money hitting your account.

DWP can routinely check in the future though. HMRC is cracking down left right and centre including online. Best advice is to be completely transparent and upfront, especially if the person in question is already ill and stressed.
In case nobody noticed, the country is pretty broke and enforcement action across all departments may well happen. Completely reasonably foreseeable.

I wasn’t laughing at the situation. I was laughing at the sheer audacity. I’m sorry for your friend’s illness but that doesn’t change how I feel about the question you are asking.

I think inheritance can be a difficult thing. The benefits system can be quite traumatic. For example, someone has to go through lengthy assessments and evidence provision to get their Limited Capacity for Work and Work Related Activity recognised. If they lose their UC because of a fairly modest inheritance (£16000 is 20 months of UC), they would have to go through the whole process again. Additionally, in April, the LCWRA rate is set to drop to almost half of its current rate, so someone who stops eligibility due to capital and then reclaims would lose that amount going forward.

@Catsknowbest Thank you and yes, the key is getting advice from the DWP. I've been speaking with them since I knew the money was coming, I've only recently migrated to UC and had two payments so far. No way am I fibbing or lying or trying to hide money.

I am disabled, the bathroom will be a life changer. But I will be over the £6k limit for a few hours on one day and I've been sooooo anxious about it. Literally, the money is coming on Friday and the builder is taking me to the bathroom shop in the afternoon to discuss their quote and order the parts. I'll also pay him the same day (someone I've known for years btw, totally trust him).

An inheritance though? Oooooh, different kettle.of fish. Over £16k and you will lose UC and rightly so. That's an annual salary for some. I have a terminally ill parent and know I'll come into some inheritance and, again, I'll be straight on to notify the DWP. Im too scared of them not to!

Lcwra is reducing ?

I agree with you.

Many people won’t be lucky enough to receive an inheritance. She will, of course, have to use this money to live on. Why shouldn’t she?

To search for an inheritance the DWP would need to know the names and DOB of the claimants family(to establish that it was not someone with the same name) , search them all to find who had died and had Wills available for public scrutiny and then look at the Wills.

For new claims- check the reliable information on the Benefits and Work website.

Would it definitely?

I don't know - I assume so - but that is why it is worth asking a solicitor.

You don't (by law) have to accept a legacy. You can refuse to accept a bequest from a parent you are estranged from, for example.

I am not advocating or advising this - this is the Legal Board, and the OP has asked a factual question not a moral one.

To search for an inheritance the DWP would need to know the names and DOB of the claimants family(to establish that it was not someone with the same name) , search them all pro-actively to find who had died and had Wills available for public scrutiny and then look at the Wills. They would need to do this proactively for each claimant and update regularly to see if any other relatives had dies.

Unless we get to a stage where wills have to include the NI number of beneficiaries and Executors have to submit all those NI numbers to the HMRC and the DWP.

I don't see that happening in the near future.

I’m not on it but know someone who is

completely off topic but once on it , is it for life or gets reassessed as tbh they could work but refuse to and claim lcwra

Its not for life unless someone is, unfortunately, terminally ill. Reassessment does take place. They would have had to meet fairly strict criteria to be awarded it initially (I work in this area)

Yeah I thought this. Are all banks and building societies really informing DWP of everyone's savings in their accounts? There are multiple millions of people who claim benefits. The logisitics of this would be ludicrous.

They could ask for bank statements, but some people have savings in building societies.

Thanks

sorry for derail @Ringley

hopefully the money will help your friend but yes if over £16k they will lose all benefits

If DWP think that the primary motive for refusing a legacy is to avoid any impact on benefits, they will treat it as deliberate deprivation of assets.

And yet some mn posters would have us believe the benefit fraud rate is nonexistent. 😂😂😂

I definitely read somewhere that there is an HMRC crack down on savings in bank accounts above certain amounts and obviously the next step is the DWP. Information sharing when everything is digitalised is easy enough. I certainly would be making sure to stick to the letter of the law, especially with a vulnerable person.