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Inherited but don't know what to do with it. Lone parent on benefits.

117 replies

Prosopopeia · 17/10/2014 11:01

I have inherited around £21,000
I would like to hear people's views on what they think is the best way to use it. I'm worried that if I ask for professional financial advice I am going to be talked into investments or something I know nothing about, I am terrible with money matters.

I would also like to add that I have been to hell and back in recent years as both a lone parent and partner of a DV relationship, I have reached almost suicidal lows and am emotionally traumatised to the extent I am barely functioning theses days, I am robotic in action, emotions, everything really. I feel as if I'm walking the planet as a ghost of my former self.

I am a lone parent age nearly 46 with a 5 and 7 year old. I left a DV relationship with the children's father. He contributes £2.50 a week per child deducted from his unemployment allowance. He does have a cash in hand job but doesn't declare it.

I rent privately and have been here 2 years.
I have however lived at 43 addresses since birth, mostly from my 20s, moving around for jobs, change of scenery, so on. I've moved 4 times since having children already.

I am currently not working. Not for want of trying. I am desperate to work. I am taking training courses, volunteering, and so on. I have also just begun driving lessons.

I realise that once the inheritance is available (currently in last stage of DWP potential overpayment of the deceased's pension credit investigation), it will deplete very quickly, as I lose all benefits and will pay my own rent (£525 month) and everything else. I know there's a benefits savings threshold but it's like trying to get blood from a stone calculating how that affects me, and I've asked every avenue, welfare rights advisors to Jobcentre lone parent advisors to the DWP themselves. Nobody can give me a straight answer.

Obviously although it's my dream, I'll never afford a permanent home for myself and the children, even though they can be bought for as little as £85k do-er uppers. But what's the best thing to do with this money? I've never had loans or credit cards (unusual I know) and have always worked in jobs where I'm living hand to mouth really, so never been extravagant. I have a small amount of debt all from utility arrears, a couple of thousand I should think.

I have thought I should buy a car once I've learnt to drive as that would assist my job hunt, but even that feels like a waste of money as myself amd the children are used to walking everywhere or using public transport.

The children will inherit their father's house and belongings in the future (which are quite valuable antiques and specialist electronic equipment) so I am comforted that they have a future nest egg.

After paying off debts, do I invest in ISAs, premium bonds, etc? Do I blow it on a car and holidays and several pairs of Clarks school shoes for the kids currently in Shoezone-disintegratables? Do I share it out with my stepsiblings? (This is my paternal grandmother who died. She is not blood related to my siblings, and only one of the siblings has ever met her). Do I give some to charity? Do I keep it in my bank savings account?

Any opinions are warmly welcomed. The money should be available very soon and I am scared of it - at my lowest debt point I was pinching loo rolls from the customer loos in stores-and to suddenly see it trickling away and to be back at square one again no job, on benefits, no savings, is awful.

I want to make the best use of it. It's a once in a lifetime opportunity. I want to 'earn it'. I want to feel deserving of money that my grandparents worked for. I spent every weekend with my Gran and she was an alcoholic and physically and mentally abusive to me (and her whole family) but it's still important to me that I use the money wisely. I afraid I might fritter it, because I'm bad at budgeting, or will be talked into investments, and so on.

I hope someone can help me see clearly what is the right thing to do.

OP posts:
TripTrapTripTrapOverTheBridge · 17/10/2014 21:53

Quoted from a DWP decision makers guide:

Did claimants have a choice when they deprived themselves of capital

29832 The DM has to decide why claimants or partners chose to deprive themselves of capital when they did if they had a choice in the matter1. The fact that claimants had
a choice does not mean their purpose was to get benefit or more benefit. It is a fact
which the DM should take into account when deciding the claimant's or partner's
purpose.

1 R(SB) 12/91
29833 Claimants or partners have no choice if they use their capital to pay

  1. for the necessities of life, such as food and fuel or ^2. debts which are 2.1 immediately repayable and 2.2 legal debts capable of enforcement1 or
  2. the Department to repay an overpayment. ^

Not all debts apply, as you can see.

Read 29832 onwards for deprivation of capital www.dwp.gov.uk/docs/dmgch29.pdf

TalkinPeace · 17/10/2014 22:01

I'd like to see the case law on that.
THe DWP link has lots of "decision makers guides" but nothing backed up by legislation

the sooner a claimant gets pro bono help to shut that shitty rule down the better

OP
Ignore triptrap : I'll PM you appropriate legal firms, as will many other who think that using benefits to finance Wonga is wrong

TripTrapTripTrapOverTheBridge · 17/10/2014 22:04

forums.moneysavingexpert.com/showthread.php?t=4605483

Just one thread (short one!) where it comes up. If you search you will find several, all over the place, where it is possible that paying off debts can be seen as deprivation.

If it is due asap AND is legally enforceable there should be no questions. If it doesn't need to be paid straight away, can be and has been paid by payment plan, isn't about to get you taken to court and isn't going to cost you mega sums in interest (won't always get you out of it it seems) then it can be questioned.

This is why the OP needs to be very careful, especially if she will need to claim benefits in the near future, say when some of the money has run down. It's a complex area and nothing seems to fit tightly in a box

TalkinPeace · 17/10/2014 22:07

triptrap
forum posts do NOT make it legally enforcable.

Wonga take benefits from people who could be out of debt
MNHQ and the press will dine out on that one

if the DWP tried to take somebody to court for paying off unsecured debt they would have the ultimate phyrric victory

TripTrapTripTrapOverTheBridge · 17/10/2014 22:11

I am aware that there is no back up of legislation there, but it is what the decision makers work by. Of course it can be appealed but,as you should be aware, that takes time.

Proper advice and caution needs to be exercised. And the op needs to not think about benefits, as sucky as it is (and it really is sucky to get an inheritance and not be able to enjoy it properly) caution really does need to be exercised so the OP doesn't end up in hot water and with nothing like some others have done

There was one on MSE not long ago, the mother had inherited something like 55k, paid off her debts and spent the rest over a couple of years. Had nothing left, put in a benefits application and was turned down due to deprivation of capital and notional capital. She literally had nothing at all and he was worried for her home. No idea if they went on to appeal, nothing was updated after that.The thing is, even if an appeal goes against the decision maker the person trying to claim will still have been left for god knows how long without the income coming in

Sylviet · 17/10/2014 22:13

Take the kids to live on the beach in Thailand for an extended trip. Chill out, have a major life experience they and you will never forget.

TripTrapTripTrapOverTheBridge · 17/10/2014 22:15

Talkin Those forum posts are from people who work for the DWP.

I a fully aware of what Wonga do.

Whether decisions will end up reversed or not happen in the first place is something that nobody can answer on any case, it seems to be vary a huge amount. But, as said, the first decision may not always be the same as the final one.

But, importantly, if the op does pay off her debts and do other things she needs to make sure she isn't doing it to reduce her capital. Obviously

TalkinPeace · 17/10/2014 22:16

MSE post : but was it real
sorry but unless I see it in the Law pages its just gossip

and unless DWP are willing to go to court its clear they know they do not have a leg to stand on.

I'm currently in dispute on behalf of clients with HMRC for over £5,000 in fines
HMRC are hop scotching through hoops to avoid court with any of us because they will lose

the self employed have accountants
benefit claimants just get shafted

OP
do the right thing with your money.

Sylviet · 17/10/2014 22:20

I'm amazed that a person could be penalised for paying off debts.

Is anything you do with inheritance essentially 'deprivation' other than living off it very modestly?

TalkinPeace · 17/10/2014 22:24

I wonder how the DWP would stand against a lottery or pools or premium bond win

I suspect they have conditioned such people to fear so they do not realise that the DWP staff manuals are legally unenforcable

shocking
almost more shocking that the entitlement of the rich
the fact that the DWP has given itself the right to shit on those who could climb out is utterly utterly wrong

Prosopopeia · 17/10/2014 22:31

TalkinPeace I really want to do the right thing with the money. Ideas of escaping to a beach in Thailand sound lovely and appeal to the inner me but I know I won't do that.

The rest of the posts are beginning to scare me Sad but I do know that finding a job hopefully before the inheritance is available is paramount.

OP posts:
TripTrapTripTrapOverTheBridge · 17/10/2014 22:34

Sylviet it's tricky. They do expect modest living but will allow things like having paid for a modest holiday, a car, something to improve life. From what I've seen from DWP workers/advice organisation workers it appears that they allow and expect some form of 'treats' such as the above as something people would normally do upon receiving inheritance.

It's not particularly nice. When something has gone wrong and you end up having to live off the state and you suddenly get a nice sum and think of freedom and nice things, it's not nice when you suddenly realise that,actually, you can't go and enjoy it as much as others would because you need to live off it and will possibly end up needing to claim again,if allowed. So it is not a nice thing, but obviously, it's not right for the state to have to pick up too when somebody could provide for themselves.

Talkin Yes, it was real. There are similar posts all over the place, particularly money and benefit related forums. It's always a tricky one and often stirs up disagreements and confusion.

As said, if there is mega interest that would be incurred then it appears it's usually allowed. Not all debts have that though, in particular ones with utility companies. But nobody knows on each individual case. Each can be appealed and I believe courts are used too.

The problem is, there are people who will go out and get rid of loads of money knowing they can do as they please and then get straight back on benefits, or do it wholly with the intention of getting benefits so they get state income and a nice little bonus in the bank and whatever they have splashed out on. Obviously, that is not right. Hence why they look at it, even those who don't have it as their first intention can get stung. As sad as it is, it's about responsibility I guess.

My elderly dad has refused his share of inheritance because he doesn't want to lose his housing benefit on his tiny little flat. The fact that he's 87 and would be getting around 40k doesn't matter to him, he doesn't want to have to pay his rent himself, he doesn't think he should have to and says it's not fair so is passing up that 40k and refusing to have it!

Crazy, right?

TalkinPeace · 17/10/2014 22:35

OP
The right thing is to create resilience within your family

holidays and treats sadly do not figure

clear any and all debts (save the interest after all)
then look at how to widen your options and increase your flexibility

there are no facile answers : but thinking long term will pay off

TripTrapTripTrapOverTheBridge · 17/10/2014 22:40

Talkin I believe their stance is the same, no matter the reason for the money!!!

Proso go and get some advice. Talk to the CAB or similar and get advice on your individual situation. Take into account with them what your debts are, what interest is involved, and court threats and any payment plans in place. Discuss what is seen as reasonable spending.

Whatever you choose to do just make sure you get proper advice first so you have a better idea of what would happen in YOUR particular circumstances.

But the most important thing is to not get rid of money for the intention of getting benefits and to not spend it with the fact that you could get benefits in your mind.

Enjoy is as much as you can, you should, just be safe.

And do not forget that you will still be entitled to Child Benefit and Child Tax Credit and that if you find some work then you could get Working Tax Credit too. That will all help offset what you are losing in IS and HB and you'll be able to enjoy your inheritance more

TalkinPeace · 17/10/2014 23:00

triptrap
Until you link to a case hearing I will disregard you as a DWP scaremonger

HMRC scare the crap out of people who do not have good advice
DWP are clearly doing the same

Case number of debt clearance disallowed
or you are hot air

CadmiumRed · 17/10/2014 23:02

It would be (is?) outrageous that paying off a debt could be depravation. A debt is a negative sum on your situation, paying it is paying the money that you already don't have because it is owed! It isn't your money, if it is owed against a debt, so how can it be depravation? It isn't the same as swapping it for an asset that you keep and still keep your benefits alongside.

I'll be chaining myself to the railings outside the court while Talkin' makes her learned case!

warmonesie · 18/10/2014 01:19

www.rightsnet.org.uk/pdfs/rsb/12_91.pdf is the key case law on notional capital and early debt repayment. This is the bit which is usually quoted:

"Of course, the above principle only applies where the relevant debt is immediately payable. If the obligation to repay does not mature for several years, or, as in the case of the usual mortgage of house property, there is no need to repay the sum borrowed, provided the agreed interest and capital repayments are kept up,then any premature repayment of indebtedness will be a voluntary act constituting a deliberate choice. And if there is a choice then the question will arise as to whether a significant operative purpose albeit not necessarily the predominant purpose, was to secure supplementary benefit or any increase thereof."

ReallyTired · 18/10/2014 08:28

There is a difference between long term planned debt and getting rid of ball ifs because you got into financial dire straits. Surely paying of short term debts like the gas bill or the credit card is not deprivation os assets.

FuckYouChrisAndThatHorse · 18/10/2014 09:06

I would interpret that as paying off a mortgage or car loan could be seen as deprivation of assets (because you get a car or a house out of it so the money isn't "gone" it's still yours), but paying off arrears of bills, credit cards, other loans, would be fine.

I certainly can't see that the DWP could see paying off arrears in utility bills as a bad thing. Especially since not doing so could lead to op's hardship.

Op, definitely get your £6000 in an ISA, pay off your utility bills, don't go to Disney land.

There are lots of short training courses (6 months or a year) that could increase your earning potential. Getting yourself onto working tax credits could mean you can enjoy your inheritance rather than fear it. It would be great if this was the catalyst for getting you new skills and a job you love. Have a look at local college courses and see what's available.

PurpleWithRed · 18/10/2014 09:14

In order:
Debts
Anything that improves employability (training, driving/car)
Maximum rainy-day fund that doesn't affect your benefits
Spend any remainder on a modest treat - generous christmas, modest holiday or whatever

Prosopopeia · 18/10/2014 14:40

Just to remind everyone, going to Disneyland wasn't my idea nor in my plans! I'm so glad this is a sensible board, if I'd posted in AIBU I can only imagine the benefit bashing earole' I'd get :/

I think this thread has definitely made me decide to look into training courses, as a start.

OP posts:
Pensionerpeep · 18/10/2014 17:21

This reply has been deleted

Message withdrawn at poster's request.

lisucbgiberiocnha · 19/10/2014 20:08

can you buy a business? or lease one

TalkinPeace · 19/10/2014 21:34

lisu
Have you read the OP?
ARe you in the real world?

ReallyTired · 20/10/2014 10:33

Talking why do you think its such a bad idea for the OP to buy a business? Clearly the location and type of business has to be carefully chosen, but other people have had sucess with self employment.

The OP says she wants to work and hasn't been able to find herself a job. Self employment could be the way out of her poverty trap. Afterall who wants to spend the rest of their life on benefits.