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

Yes and no. Social Services are on the scene (I’m sorry, but due to many many problems with SS in the past, our relationship with them is not good).
They are not able to help in any practical sense, however. We’ve explored those possibilities a few times.

We are talking with SS, however, but it is more a case of them demanding change, rather than practically helping bring about that change.

Which is fine, there doesn't need to be a formal maintenance schedule, but my point was you are responsible for paying (considering you're a separate household) child maintenance and for your own household only. Anything outwith that is a choice, and a choice that UC will probably disagree with.

Is your wife claiming UC as a single person? If so you need to look in the guidance around living together as a married couple. By giving her money for the kids as and when you may be considered as LTAMC. It's better that you make a monthly payment labeled child maintenance

So just pay a few installments of child maintainence for their holiday. Deprivation of capital is about reasonable spending. I doubt it would be considered unreasonable to give your ex some child maintenance money to support your kids.

The pension income is £ for £. So yes, my UC would reduce by the monthly pension income, so in effect, I would have the same money coming in.

Shouldn't the council be responsible for repairing the fence?

We’re not living together.
are you saying I should make payments monthly, say, as child maintenance, even without a formal agreement to do so?

No. See previous answers.

I was always under the impression that child maintenance was a formal agreement. That’s why we never did it… I just pay whatever I can when it’s needed.

Regarded pension recycling rules - another thing to be aware of is your own personal limits for pension contributions. If you've not worked at all in the current financial year this would be limited to £2880 each tax year, and topped up to £3600 by tax relief.
If you have worked this financial year your total pension contributions can total up to your net income.

Surely that's the point of your pension fund? To provide for yourself and your family? If you can do this, there should be no need for the family to claim benefits.

So just pay some because they need a holiday then ?

Genuine question - if you don't tell dwp about lump sum how do they know? Do they access bank accounts as standard? Or is it n auditing at random type of sitch?

With potentially four disabled people claiming disability benefits and the extra premiums that go with this and council rent which will all be covered by UC, I don't quite understand why there is the need to take a private pension out to pay for garden repairs but obviously op feels there is a need.
Op is your ex claiming all the benefits she can for the kids etc? If your eldest is coming off her UC claim soon then he should be able to claim UC himself if unable to work?

It would be reported through HMRC.

I haven’t worked this financial year…

but I’m not sure what you mean? I haven’t made any pension contributions this year…

That is my point… they do need a holiday. But from all the replies here, that wouldn’t be acceptable…

It is if you just paid it as child maintainence - no need to specify it's for a holiday. Your ex can then use it as she sees fit.

?
I don’t get you. The pension is there to help provide for when I retire (which is now). But the amounts we are talking are small in the grand scheme of things. Essentially, there’s less than a years living in my pension payment… and if you take into account essential things that need paying immediately, then that leaves very little.

It doesn't matter if you are living separately as you can still be considered as 'living together as a married couple'. It's really worth looking into as you could be considered as doing this currently. Here are the guidelines. Any regular payment from you to your wife could be considered as you and her being one financial entity despite living apart.

assets.publishing.service.gov.uk/media/5a820c1ae5274a2e8ab5738a/dmgch11.pdf

I think the reason you are struggling to find answers is your situation is a pretty unusual one. Not many people operate as a couple but live separate, so it's going to be very difficult to find people in this situation with UC and pension knowledge. It may also be why those you have spoke to dont know.

You surely need a clear definition, you are either operating financially as separated or married. Your UC claims are either as single people or married, you cannot have both. That should help you figure what to do.

If you are claiming as a couple then that will give you one way to handle it and if you claim as both single, a very different.

Is your wife's claim as a single person? If so it may be worth getting legal advice (maybe via citizens advice) or asking on the legal board on whether you can split your pension prior to legally divorcing as this will be considered part of your assets. You say you don't want to divorce for the kids, but you are talking paperwork and financially, the day to day doesn't have to change remotely, it's purely to separate finances and make things clearer.

Child maintenance doesn't have to be formally arranged I believe, so you could start paying a set monthly amount if you are separated.

I think a lot of the issue comes from your situation being incredibly unique, and you may struggle if you are both claiming as single people yet are married, so it is worth getting advice and getting some clarity. But this is probably why people will struggle to advise as most people in this situation will be separated and waiting to divorce, therefore the finance aspect will be very different for them.

I think maintenance and splitting the pension sound like the easiest options and getting some advice on whether you can split the finances before a divorce in order to ensure your wife has her share.

So, for instance, if you'd earned was £10K net earlier in the year, you could make £10K contributions into a pension in the same tax year.
As you're not making earned income, you can still contribute £2880 each financial year and receive extra tax relief into the pension. Then another £2880 in the following tax year, provided it doesn't contravene the recycling rules.

They are able to live with their incomes, but there’s not enough to just conjure up sufficient to pay for everything that needs doing. People on benefits don’t get oodles of money and live lives of luxury. Disposable income is not much in these days.

The eldest is still in education and so is still part of the wife’s UC. I do believe that will change at some point, obviously, but all that achieves is even less money coming in for the upkeep of the house…

@Cyclingmummy1

Totally agree with you , ops pension should be for making retirement more comfortable.
But op wants to prioritise a new fence and declutter, plus's holidays . Then hopes his benefits won't be affected.

Another thing looking a bit further ahead...the pension recycling rules only apply for the two tax years before retirement, the year of actual retirement, and two tax years after.

So about three years after retirement you can contribute £2880 every year without fear of breaking the rules. This would effectively reduce your pension income for the purposes of claiming UC....