Deprivation of Assets and UC

[V2Schneider]

I am aware of this topic being posted a few times, but having read many of the posts and replies, I can’t seem to find an answer that covers my circumstances.

BACKGROUND
My wife has Myeloma Blood Cancer, had a stem-cell transplant in 2020… now the cancer is back, and she’s back in chemo, and probably set for her second Stem-cell transplant later this year.

My eldest (19) has a recent diagnosis of autism, which explains the difficult times we had with school and education since they were 11.

My youngest (15) has a genetic condition, and attends special school.

I don’t live with them anymore. I also have an autoimmune disease, Vasculitis, and so I am not working.

QUESTION
Since my wife’s illness has got worse, she is finding it increasingly difficult to maintain the house, and garden. So much so that it needs a complete clear-out and repairs etc. My kids don’t have the capacity to help, really, and so things have just got out of hand.
I decided that I have to do something, so I looked to one of my pensions. I have applied for early retirement, but I have to take the initial lump sum all in one go, and that could be between 15-20k…

I am on UC, with LCWRA, and PIP. Having so much money will obviously stop my UC.

i am planning to use the money (£6000 of it initially) to put things right at my wife and kids’ home.
I also wanted to pay for my wife and kids to go on holiday.

so, my question is: Does paying for repairs etc. to my wife and kids’ home, and paying for a holiday for them (by god, they need one!) count as me willingly depriving myself of capital to keep benefits?
Has anyone been through something similar?

The rest of the money I will be using to clear my own debts, and may even take a holiday myself!

TIA

If I had credit cards, I wouldn’t need to take my pension. Taking the pension is the only way to raise enough money for this.

I only have this pension, which is “all or nothing” basically. No other draw-down options.

Repairs are the landlord’s responsibility. The DC are old enough - one is an adult - to be able to manage without a garden fence. It would not cost you £6k to hirs a couple of skips to clear the clutter. Of course it’s your choice to spend your pension on someone else’s home, no one can stop you from doing that. However, the downside to that would be the withdrawal of UC due to DOA. Paying back loans to family that are undocumented would look particularly dodgy because there would be no way to prove that you were lent this money in the first place.

But you are separated. That's the point.

My thinking is that a small amount of money spent with a solicitor might save you a lot more overall.

If you could agree that you are giving your wife her fair share ahead of a future divorce (which might never come) then you are no longer depriving yourself of an asset - just carrying out what is legally required.

She is then free to spend that money on her OWN house and repairs etc would be fine (it's the spending on a home you don't live in that's the problem).

Ask on legals the most cost effective way to go about it given you are amicable and happy to agree everything between you.

So if you divorce, your then ex would be entitled to a share of your pension and there would be no consideration of DOA therefore no impact on UC.

I think all this is spot on. Absolutely you can do whatever you like with your pension draw down but continuing your UC claim amidst all this…most likely not.

If your children didn't live there it would be different, but as you're talking a few thousand and it's for safety for your 2 disabled children (whether or not you view autism as a disability I would word it like that to them when asked to explain) I don't see how they would class it as deprivation.
I wouldn't do the holiday ideas until you're below 6000 and all checks have been done though.

DC?
My youngest has a genetic condition. The garden and fence were there specifically for her. The garden is her “sanctuary” in a lot of respects, where she can be outside without being vulnerable out in the general public.

The landlord in this case is the local authority, and they quite categorically, are not responsible for the garden etc. We are, as stated in the tenancy agreement. Why would I want to spend my money if I knew someone else was responsible? Believe me, I’ve explored many avenues to find help for this situation, and the only way now is for me to get this money and pay myself.

The loans from family ARE documented… I insisted on that when we did it, because I’m not one for taking advantage of my family and friends…

You may think it’s spot on, but it’s incorrect. The local authority landlord does not have responsibility for the garden/fence etc. The tenants do, as stated in the tenancy agreement.
Had the council been responsible, do people not think I would have already reported the work to them?

Thank you.

Yes. But as I responded in a previous reply, divorce is out of the question at the moment, and even if it were, it couldn’t be done in time.

Apologies - you mentioned taking one of your pensions in your opening post, so I inferred you had more than one.

Have a look at the HMRC recycling rules on pension lump sums.
There are 5 criteria and I believe penalties are incurred only if all 5 are breached.

For instance, one of the criteria is additional contributions exceed 30% of the tax free lump sum. So you could possibly invest and shelter some of the lump sum in a new SIPP as long as it was below 30% barrier.

Money invested in pensions is disregarded for UC calculations (though I am not up to date with the latest regulations on this, so you would need to check).

https://www.ipm-pensions.co.uk/a-useful-reminder-of-the-pension-recycling-rules/

If only I had money to pay a solicitor. :(

Different circumstances as live with my partner but claimed a pension over 20k whilst claiming uc and a disabled child. Paid off debts (which i could prove as was my cc debt and not cash to family). Anyone can sign a piece of paper to say you owe X. That then went to 17k and then i got some windows which didn't open replaced for 2k (for a property i lived in). All reported. I had to go to job centre and show invoices and there were no issues at all. In fact they tried to disregard the 20k altogether for coming from a private pension and i wrote a note saying im sure thats wrong as i have the money sat in the bank!

I feel your pain as I was terrified about what they'd say but I was just honest and did what I needed to. Noone wants to claim a pension.

Holidays are pushing it id imagine but as soon as you notify them you have a huge sum suddenly come in, they'll want to see the evidence anyway so wait until the review then book the holiday afterwards

Could you go to citizens advice or a financial advisor. I'd be worried replying on advice from here. Sounds like a difficult situation x

Forgive me, I mistyped about the pension… pi have just the one pension. A teachers pension.

What you are saying is, I can invest some of the lump sum immediately on receipt, up to 30% of it, and that is not counted then as deprivation of capital? Because that money is no longer available?

Sorry it was the second bit of the post I thought was spot on - re UC and DOA. I have no idea about landlord’s responsibilities with regard to maintenance of gardens and fences.

Having thought a bit more about it, it might make sense to take legal advice on this? Expensive yes but might save you in the long term. Rather than reading differing opinions on Mumsnet and as you say, UC themselves cannot seem to give you a definitive answer.

Thank you for this.
I think I need to book into the Job Centre for an appointment to try to clarify this…

I believe that living separately but married does not affect the pension entitlement of your wife, unless there was a formal legal separation. You don't need a solicitor to confirm this - the pension administrator will advise you on the rules of your pension.

Thanks. I certainly need to speak directly with the job centre, I think… in person, so I can explain to them.

I don’t have money for a solicitor, and when I do have money in a month’s time, it’ll be too late!

I think you'll be on very dodgy ground for almost all of the spending plans you have to be honest.

You both have the benefit of claiming UC separately (and therefore receiving more than if you were together), whether that is intentional or not that's the end result and it's that way because you've presented to them that you aren't financially linked and that nobody contributes financially to either others' lives, barring child maintenance.

You can't then use your own money to pay for things that would reasonably be paid for if you were one household. You can't have the benefits of separate claims without any of the downsides.

For benefits purposes you are two separate households and the upkeep of their household isn't your responsibility, as far as UC is concerned. You are either financially independent of each other or you're not. Yes your children live there but your responsibility to them is maintenance and providing a household for when they're with you. You're not responsible for maintaining their mothers' house. In an ideal world you could of course contribute what you like because you're amicable and it's a nice thing to do, but that's not the same as it being reasonable for UC purposes.

My caveat here is that I have no judgement about claiming benefits, nothing I say is meant to be in a condescending manner, I'm just trying to speak plainly.

I posted here, not for opinions, but in case anyone had first-hand experience of a situation like this.
it appears no one has, which is the issue when doing a google search for instance. Nothing seems to fit my question exactly, and it’s all a bit of a grey area.

I just want to be able to do the right thing, legally and honestly. :/

I appreciate your reply.
There’s no formal arrangement for me paying for the kids, I just pay whatever is needed whenever… I take responsibility for my kids as any dad would…

If the house is so cluttered that it’s dangerous to live in, is this not something social services would help with if your wife self-refers to them?

Staff in the Jobcentre do not make decisions on deprivation of assets. They would have very limited knowledge and would not be able to say whether the spend would be allowed or not.
Citizens Advice may be helpful.

I believe this is indeed the case. Pension contributions are disregarded as income for UC.
TPS do regard married spouses who are not legally separated or divorced as beneficiaries even if they do not live together (at least they did when I checked 4 years ago), so I think your wife will be covered.

One thing to be aware of is pension income is not tapered by UC calculations in the same way as earned income.