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.

Banks of people in receipts of benefits do inform the DWP if a recipient's savings go over, yes.

OK, and so it would be the wrong thing to do.

But for the unscrupulous it would be very very hard for the DWP to ever know that someone had done a Deed of Variation on a random will.

Exactly. It can be traumatic and frightening to go through the process of reapplying and is too difficupt for many disabled people. It's often preferable not to have an inheritance, or for the person leaving the money to put it in trust, rather than go through so much stress and distress.

The solicitors dealing with the estate are obliged to report inheritance to HMRC I think so this information would feed through to UC.

Is a Deed of Variation not part of the Probate? They can go back 6-7 years into the future. Technology is moving so fast. Who knows! Not recommended.

That doesn't sound like a job for a solicitor though. If she isn't able to take in the information, a friend might help, or perhaps a volunteer from a charity that supports older people. Could you help her by reading up and explaining the situation to her? There's quite a bit of information on this thread already.

HMRC have developed a tool called Connect helps join data sets together across Government, and is using AI to identify links / connections between DPW, HMRC, PAYE, NI and bank/building account account data. Now, its AI so it wont be that accurate yet...but I wouldn't bet against suspicious links being identified, and investigatory resource directed at them, This article says that 4,300 HMRC staff are using it...though I assume its not their entire job. If they aren't already its only a matter of time before DWP are using the same tools...

HMRC finds value in ‘big data’ after bringing in extra £4.6billion

For a modest inheritance, maybe, but what should be the cut-off point? £25k? £50k? £250k?

It would seem to fly in the whole face of the point of benefits if someone has inherited £100k or even scooped the Euromillions but they are still classified as needing financial help.

From next year banks will be reporting to dwp any bank accounts that have benefits paid into them if they go over / between. 6k -16k

all benefits that are paid into bank accounts have dwp identifiying references so banks will just use the code to check if your over that amount

also they will report if the account is used abroad for more than 4 weeks as you can only spend up to 28 days at a time out of the uk and keep your UC claim open

and savings accounts routinely report interest to HMRC who report to DWP

Is it enough to buy herself a property to live in @Ringley ?

What would be a reasonable compromise would be if you could report a modest inheritance, were then required to spend that exactly like your UC (in lieu of) and then able to notify them once it is spent. Then the claim would just be “dormant”, would save everyone time and money.

Thank you. I've already been through this with her at the basic level already on the thread.

There's variables and what if's which she'd like to discuss with an expert. The internet doesn't give all the possible scenarios. And there's conflicting advice on the web too.

So for her peace of mind she wants to talk to an expert.

No.

I wonder why the need for an expert. Is she scared of making a mistake and being accused of deprivation of assets? Does she have some other concern? It would be easier to find the right person if she's more explicit. A solicitor would only be relevant if it was a legal matter.

If she spends the money on things that would make life easier with her disability that would be fine. I don't think she can keep it a secret or pass it to somebody else. There will be the risk of prosecution for benefit fraud

Only a welfare benefits adviser is needed. Its the DWP rules you need to concern yourself with. There aren't really varying scenarios that a solicitor can point you towards, or a financial adviser.

Remembering to document the spending as once the amount goes below £16k they will want to see this. A UC claim will only stay open for 6 months on continuous zero award and will then be closed. A new claim would then be required with the same obligations to show bank statements for 12 months sometimes more.

Yes, exactly this

Hence why the capital rules exist and can't be got around. There are only capital disregards in certain exceptional circumstances, and many of these only give a 12 month disregard. Inheritance of cash is not one of the exceptions under the disregard rules.

All accounts in claimants name must be declared: current, savings, credit union. Also any PayPal accounts. Everything. And any joint account they hold.

Yes exactly. And it’s why from 2027 all financial institutions are required to collect national insurance numbers for all accounts. Which will help HMRC ensure they collect the correct tax on interest, and that the DWP can identify all accounts a claimant has.

Deliberate deprivation of assets is fraud. People should avoid fraud, as there's every chance DWP will find out and also this is all of our money.

UC is means tested, so if you've got over £16K, just live on that until your savings go under £16K.

There is no bigger expert when it comes to UC rules then UC themselves though. All she has to do is report the inheritance when it comes, they will tell her what happens next

Surely the best people to ask is the DWP themselves, and be guided by them. Perhaps they would allow someone to advocate for her?

Yes. There needs to be a better system all round. If you're unable to work and disabled or ill, it can be really hard getting all your benefits sorted and they come with other things too like care packages etc. Losing all your benefits can really throw someone who is used to that life and they will be frightened of having to go through it all again. A lot of people have to have assistance claiming too. It can end up being a real mess.

Maybe they could find a way where, people can keep their claim open for a while if they are expecting to run out of money at some point. This doesn't help the issue of people who don't want to pay any money towards keeping themself though.