Universal Credit and Inheritance

MichelleScarn · 26/01/2022 16:46

Do you own/rent? What other benefits are you on? I don't think this affects PIP, just means tested benefits.

Sciencebod · 26/01/2022 16:50

This is something I have been worrying about as I am disabled and also a main carer for disabled DC’s. I have a mortgage that I scrape by paying which is cheaper than private rented. I am unclear on inheritance rules so watching to see if anyone has any advice.

Danikm151 · 26/01/2022 16:53

I think the general gist is that you can apply after your savings go below £16k but if it's quickly they will want to see what the money was spent on and you weren't purposefully spending in order to claim benefits.

CorrBlimeyGG · 26/01/2022 16:57

There's no set calculation on this, just an expectation that you spend reasonably (and keep receipts). For day to day spending, the DWP should recognise that costs are often higher than benefits, so they will accept reasonable expenditure on rent, food, heating etc. For larger spending, it's OK to buy new appliances, sofa etc if needed, and for these to be of a good quality, so not necessarily the cheapest.

Original poster

TeamLucas · 26/01/2022 17:34

Thank you for getting back to me so quickly, I really worried that I won't be able to reclaim when the inheritance is at the threshold because of them saying I've spent it too quickly. I'm thinking ing that I'll just have to replace the monthly UC with the same allowance out of the inheritance. I'm scared that if I go over, I won't be able to reclaim. I've already spent £6,000 on furniture, clothes and other things we desperately needed as I moved recently. I'm thinking that this will mean I can't spend more per month than I was on UC?

OP posts:

Akire · 26/01/2022 17:41

It be worth spending few hundred on proper advice just to put mine at rest. If they give no guidelines they can’t really then say you spent it to fast. If average wage is what £26k you wouldn’t be totally unreasonable to be spending that level of income.

Wilma55 · 26/01/2022 17:52

www.gov.uk/government/publications/advice-for-decision-making-staff-guide

Chapter H1. Deprivation is near the end. This is the guidance staff use as far as I know.

PalmedOlive · 26/01/2022 19:05

You can spend money ok debts so I think you can pay money off your mortgage. The things you have bought might constitute depravation of capital but they might be allowable if they were essential. It’s definitely worth getting proper advice on this.

PalmedOlive · 26/01/2022 19:13

UC is different to other benefits in that paying off debts (inc a mortgage) is not seen as deprivation of capital. You are also allowed to have savings of up to £6k without it affecting your uc claim. For savings between £6k-£16k they apply a taper to what you get. Above £16k you don’t get anything. Might be worth using it to pay down your mortgage. As I said - get advice. Citizens Advice will be able to help.

TeacupDrama · 26/01/2022 19:20

If furniture is a bed each a sofa a wardrobe dining table and chairs and a washing machine it's fine kitting all your kids out in designer gear not so much, definitely no thousands on Disney land Paris but ..... if you are diabled and need some specific equipment for example is very bad arthritis buying special cutlery aids for opening jars a shower seat etc would be reasonable a 58" TV not so much, I would expect 40 -16 ie 24 k to last well over a year, is there any way you could use the money to kick start a self employed business for yourself good luck

Sciencebod · 31/03/2022 12:48

Just wondering if you found out if you are allowed to pay off some of your mortgage with your inheritance on UC?

ivykaty44 · 31/03/2022 13:12

I've already spent £6,000 on furniture, clothes and other things we desperately needed

you just need to show what you spent the money on, so keep track and write everything down very clearly. Keep bank statements.

If you now give yourself an allowance you'd have to pay rent and bills etc so the money between £34k left after the £6k spent and £16 isn't going to last long £18k would last most people one year

if you're on a pre payment meter, top that up, make sure your council tax is paid up (they may have different rates of savings, possibly much lower before you can have tax relief )

MRSAHILL · 31/03/2022 13:21

I wondered about inheritance too. Me and dh get joint universal credit. His dad is 94 and owns his own house, which will be left between him and his brother should anything happen to his dad (unless he goes into a care home when I assume, it will be rightly used to pay for his care). What worries me is that if his dad were to sadly pass away, we would inherit the house which could take months to sell. Are we supposed to tell universal credit in the meantime and I assume they'll stop our payments? I don't know how we'd survive without universal credit whilst waiting for the house to sell? I was hoping we'd only have to notify them once the house is sold and we actually physically had the money, but I'm not sure how it works and I don't want to do the wrong thing. My dh, due to his disability, isn't executor, it's just his brother and the Solicitor.

Babyroobs · 31/03/2022 14:34

@MRSAHILL

I wondered about inheritance too. Me and dh get joint universal credit. His dad is 94 and owns his own house, which will be left between him and his brother should anything happen to his dad (unless he goes into a care home when I assume, it will be rightly used to pay for his care). What worries me is that if his dad were to sadly pass away, we would inherit the house which could take months to sell. Are we supposed to tell universal credit in the meantime and I assume they'll stop our payments? I don't know how we'd survive without universal credit whilst waiting for the house to sell? I was hoping we'd only have to notify them once the house is sold and we actually physically had the money, but I'm not sure how it works and I don't want to do the wrong thing. My dh, due to his disability, isn't executor, it's just his brother and the Solicitor.

You wouldn't receive the money from the house sale until it is sold , so until that money is in your bank account it would not count as capital for UC.

Babyroobs · 31/03/2022 14:37

@TeamLucas

Hi all, I've had to come off Universal Credit due to receiving an inheritance of £40,000.Can anyone tell me how long this is expected to last before I can reclaim UC. Do the Dwp expect me to live off an amount equal to my monthly UC? I'm disabled and very scared about when the time comes to reapply and having to go through all the assessment stuff and processing time. I would be very grateful for any advice or information. Thanks in advance

As soon as capital drops to 16k you can re-claim UC. I'm not sure whether you would need to start the work capability process again if you previously got the LCWRA element on UC. Anything over 6k will reduce your monthly UC payment by £4.35 for every £500 above 6k. You can spent the money on paying off debts etc and reasonable spending. Things like buying a brand new car or going on extravagant holidays or giving money away would be seen a s deprivation of capital but reasonable spending is fine. try to keep receipts for where the money has gone if possible.

jkrfan · 31/03/2022 14:57

Surely you just 'sign off' and then sign on again 'jumping through whatever hoops there are' when your savings are back at the highest threshold allowed.
In a free society there is no reason OP cannot buy a new car if she needs one, go on holiday if she wants to, surely.
She has signed off and can spend as she sees fit. Just because she received benefits previously doesn't mean she can not enjoy her inheritance?
If I am wrong, I would like to see exactly on the Government website where it says that they will monitor all her spending between ceasing to claim and signing on again?

Babyroobs · 31/03/2022 15:00

@jkrfan

Surely you just 'sign off' and then sign on again 'jumping through whatever hoops there are' when your savings are back at the highest threshold allowed. In a free society there is no reason OP cannot buy a new car if she needs one, go on holiday if she wants to, surely. She has signed off and can spend as she sees fit. Just because she received benefits previously doesn't mean she can not enjoy her inheritance? If I am wrong, I would like to see exactly on the Government website where it says that they will monitor all her spending between ceasing to claim and signing on again?

It depends whether the dwp would view that she had spent the inheritance extravagantly. A holiday is fine, a round the world trip burning through 40k in a few months or buying a 20k car then maybe not. It's fine to spend on a reasonable second hand car if needed. Look up the deprivation of capital rules that someone has linked above if you want to know !

jkrfan · 31/03/2022 15:01

I found this on an Accountancy website but that relates to continuing the benefit whilst spending the money rather than signing off:

If you buy a £60,000 sports car with your inheritance, your universal credit officer will likely consider this purchase unreasonable and may sanction your benefits. If you replace your household's older white goods and furnishings with new ones and this brings you under the savings limit, this will usually not affect your eligibility for Universal Credit. It's also important to know that some benefits are not means-tested, and these should not be affected by inheritance. These benefits include: • Disability Living Allowance (DLA) • Personal Independence Payment (PIP) • Contribution-Based Employment and Support Allowance (CB ESA)'

Babyroobs · 31/03/2022 15:01

The DWP could still treat her as if she had the 40k if they felt it had been inappropriately squandered, so op would then be in a worse position. I'm afraid if she wants to claim Uc again she needs to be careful .

Starface · 31/03/2022 15:28

Another option to consider would be putting some in a pension. I DON'T KNOW FOR SURE but I think money in your pension is not considered when calculating your benefits. You will need to work out how much you can put into a pension and still claim tax relief (this depends on your earnings etc). But you might be able to keep the money, get some more added by the government, and have a nicer retirement. If you are very quick, you could do some before the end of the tax year, then some straight after to make the most of your ability to invest.

MRSAHILL · 31/03/2022 15:39

@Babyroobs many thanks for once again answering my questions. Much appreciated.