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Original poster

Do you lose your benefits if you inherit?

58 replies

AngelEyes46 · 27/04/2012 22:47

Just that really? A friend gets approx £600 per month in working family tax/child tax credits. Her ex pays a certain amount towards the house/kids etc. She has come into an inheritance and is worried that she may lose her benefits? Anyone know?

OP posts:
OldLadyKnowsNothing · 27/04/2012 22:52

Yes. I think it's on a taper, if you have £3k to £16k in the bank. Over £16k and you get nothing. But this may be out of date and your friensd should check with Citizen's Advice.

Original poster
AngelEyes46 · 27/04/2012 22:56

She checked with HRMC today and they said she will carry on getting it. She is worried though that whoever she spoke to has got it wrong. She's been looking at the website and that says no. I said to just carry on getting it and if it's wrong deal with it at that point. She's more of a worrier than me though and doesn't want a great bill.

OP posts:
AgentProvocateur · 27/04/2012 23:01

Actually, I would hope you would. Why would she keep on getting benefits if she's sitting on a pile of money? (Depending, of course, on how much her inheritance is?)

CogitoErgoSometimes · 28/04/2012 06:58

There are some benefits that are affected by having savings over a certain amount and some that aren't. Tax Credits are not affected by savings or maintenance payments. Other benefits such as Council Tax benefit or Housing benefit are affected. In her shoes, I would run my details through the Turn2Us Benefits Calculator then do it again including her legacy

Shriekable · 28/04/2012 08:13

I used to work in a benefits office, and anyone claiming benefits will have signed a declaration stating that they will inform Jobcentre Plus/HMRC of any change in their circumstances, which includes inheritance. Why would she want to keep on claiming and wait to see what happens? Someone I know did that and ended up in court for failure to notify and claiming fraudulently. She should ring them again and ask them to put something in writing to cover herself. She might be able to keep claiming, it depends on the size of the inheritance.

Original poster
AngelEyes46 · 28/04/2012 17:48

Inheritance is large but if she for example, bought a property, why could she not carry on claiming benefits. Or pay off the mortgage of her own house? I know a lot of people may find it greedy but why should she be disadvantaged due to her parents making sure that their children are ok when they die?

OP posts:
MarianneFaithless · 28/04/2012 20:10

Some 10 years ago I inherited £12,000 when my mother died.
We were on a very low income and claiming max. tax credits.
I informed HMRC and, yes , it did affect my benefit, in fact we didn't get any tax creds for 12 months, -- I imagine it was considered income?
I often wonder if that was in fact correct, but I never queried it.
Anyway, my inheritance went on food and bills,and why should it be any other way -- unless you have a trust fund!
And like I say, it was 10 years ago, so rules are probably different now.
We're still poor!

CogitoErgoSometimes · 29/04/2012 11:43

If your friend was to buy property with the money rather than declare it, it would be benefit fraud classed as 'deprivation of capital'. She's allowed to have a certain amount of money in the bank before it affects benefits and, as said earlier, some benefits are not affected by savings. She will still have to declare it. It's only fair on everyone else.

catsareevil · 29/04/2012 11:48

"I know a lot of people may find it greedy but why should she be disadvantaged due to her parents making sure that their children are ok when they die?"

It seems strange to view it as being disadvantaged. Benefits are for people who meet the criteria entitling them to benefits, not some sort of bonus.

notactuallyme · 29/04/2012 11:56

I think some claimants think benefits arre some sort of entitlement or salary. We need to think of benefits as there when you have no other means of support rather than a permanent source of income. I was really pissed off that a friend turned down an increase in hours as she would lose tax credits, but I think if you can actually earn the tax credits you shouldn't have the option of not.

kilmuir · 29/04/2012 11:58

But her circumstances have changed, she has more money available. No different to having a job surely?

nagynolonger · 29/04/2012 11:59

Would it still be 'deprivation of capital' if she paid off credit card debt with the money CogitoErgo ?

Safmellow · 29/04/2012 12:02

Tax Credits are not affected by savings (think Universal Credit may change this). If it is a large sum which produces income, this would be taken into account.

MrsMcEnroe · 29/04/2012 12:04

"why should she be disadvantaged due to her parents making sure that their children are ok when they die?"

Because her parents have made sure that she is OK and therefore she is no longer disadvantaged, of course!

CogitoErgoSometimes · 29/04/2012 12:08

@nagynolonger.... I'm not 100% sure but would expect it depends on the amounts involved and being honest with the benefits people about plans.

HecateTrivia · 29/04/2012 12:16

Benefits are for people who need them because they don't have enough money to live on. They are a vital safety net and I'd like to kneecap the bastards who are trying to take them away from people who need them Angry

However - If someone's circumstances change and they have enough money to live on - benefits should stop.

I think that's only fair, really.

So if the inheritance is large enough that she loses benefits - she doesn't need benefits, iyswim. They're for people who need them in the here and now, not for people who used to need them but have now come into some money. If you have your own money - that's what you're supposed to use to live on!

I think you can have is it £8000 in savings before they start reducing your benefits? Or certain benefits?

I think that you can use a sum of money to do certain things, but I am not an expert - I am pulling this out of the back of my head where I think I remember reading something about it! But can't you pay of debts or stuff like that? Something that is about improving your situation, and if that uses up the money, then so be it?

I think what you can't do - legally, or bloody morally! is buy yourself a flashy car and a big tv and bugger off to disney world and then come back and say please can I have my benefits, the money is all gone.

She should get some financial advice.

chenin · 29/04/2012 12:44

Why on earth should she get benefits now? An inheritance is exactly that... passing on of money/property for the good of a child or relative. Now she has her inheritance (and the OP said it was large) surely she doesn't need her benefits and it should go to someone who really does need it.

No wonder I got pissed off at the amount of my recent tax bill with this sense of entitlement. And in answer to your quesiton, OP, yes I do find it greedy.

FruitSaladIsNotPudding · 29/04/2012 12:54

Why on earth should she keep them?

adamschic · 29/04/2012 13:05

Having capital doesn't affect tax credits, just the income/interest gained on the capital does as anything over £300 per annum is treated as income.

Having capital does affect HB, Income based JSA and IS. Think it's 3K for JSA/IS and £16,000 for HB.

If the inheritance is large she should by a house with it, providing she doesn't own a home or pay off a mortgage if applicable. This wouldn't be classed as capital deprivation but a sensible investment which would save the benefits bill in housing benefits.

AfricanExport · 29/04/2012 13:31

"I know a lot of people may find it greedy but why should she be disadvantaged due to her parents making sure that their children are ok when they die?"

The same reason I am 'disadvantaged' because my parents made sure I had an education and was employable.

My God ... the double standards just piss me off...

chenin · 29/04/2012 13:44

Interesting that the word 'disadvantaged' is used in the terms of NOT getting benefits alongside a huge inheritance... That's not an example of being disadvantaged in my book... the OP's friend should be bloody grateful her parents provided for her when they died enabling her to come off benefits, as opposed to taking this good fortune and trying to buck the system by still getting 'her' £600 a month. (correct me if I'm wrong, but that's what it sounds like to me.)

What a strange world we live in.

AfricanExport · 29/04/2012 13:52

Absolutely HellieBean. Getting an inheritance is now a 'disadvantage' - it's madness!

FruitSaladIsNotPudding · 29/04/2012 14:27

Exactly. It's like saying " why should I be disadvantaged by having a job which earns over the tax credits threshold, I should get benefits too". Ludicrous.

thekidsrule · 29/04/2012 22:54

ok op this was my experience

single parent of 3 morgaged property

i was on income support,ct,ctc

my ex partner died,we had a joint morgage and what the DSS didnt pay i made up and i also paid the endownment,didnt get any maintnance either

anyway endownment paid out forty odd thousand,the morgage was twenty eight

informed dss,they let me pay morgage of and all outsatanding debts,which after that left me with approx five grand

i had to give all my paperwork to them (fair enough) and they done the sums and my benefit stayed the same,and they didnt say i had deprived myself to claim more benefit

so it is possible,this was 4yrs ago

thekidsrule · 29/04/2012 22:54

ok op this was my experience

single parent of 3 morgaged property

i was on income support,ct,ctc

my ex partner died,we had a joint morgage and what the DSS didnt pay i made up and i also paid the endownment,didnt get any maintnance either

anyway endownment paid out forty odd thousand,the morgage was twenty eight

informed dss,they let me pay morgage of and all outsatanding debts,which after that left me with approx five grand

i had to give all my paperwork to them (fair enough) and they done the sums and my benefit stayed the same,and they didnt say i had deprived myself to claim more benefit

so it is possible,this was 4yrs ago