Page 6 | Deprivation of Assets and UC

V2Schneider · 2025-02-15T21:48:11+00:00

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

Original poster

V2Schneider · 16/02/2025 11:43

OneForTheRoadThen · 16/02/2025 11:36

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

Thank you. I will take the time to read today.

OP posts:

Sarahconnor1 · 16/02/2025 11:43

There are 2 issues, depreciation of assets and whether 2 seperate UC claimants could be viewed as one financial unit.

if you have never paid regular child maintenance, then make some larger (than your monthly income requires) payments just after you receive a pension lump sum, its a risk that this would raise suspicion

Miley1967 · 16/02/2025 11:44

V2Schneider · 16/02/2025 11:39

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…

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With three lots of disability benefits coming in and the associated premiums, there will be significant amounts of money coming into the household especially if receiving higher rates. That's why I was asking if they are claiming everything they can? There may also be charitable grants available to them as a household with multiple disabilities - search sites like Turn to US for grants etc and speak to the council. I'm not sure whether disabled facilities grants would cover making a garden safe for a disabled child but it's worth asking.

Julen7 · 16/02/2025 11:50

V2Schneider · 16/02/2025 11:39

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…

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I’m afraid a lot of people are in this position, it’s life and COL.

Original poster

V2Schneider · 16/02/2025 11:50

anothermnuser123 · 16/02/2025 11:36

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.

Thank you.
We’re financially separate, living separately, take different holidays (when we’ve managed to find a couple of days), etc. We don’t eat together, except on special occasions such as family birthdays etc. So I’d say we are not a married couple, except on the certificate.

I just need to make sure my kids are ok…

OP posts:

Beetrooty · 16/02/2025 11:50

Best to get specialist advice on this as its complicated.

Original poster

V2Schneider · 16/02/2025 11:52

Miley1967 · 16/02/2025 11:44

With three lots of disability benefits coming in and the associated premiums, there will be significant amounts of money coming into the household especially if receiving higher rates. That's why I was asking if they are claiming everything they can? There may also be charitable grants available to them as a household with multiple disabilities - search sites like Turn to US for grants etc and speak to the council. I'm not sure whether disabled facilities grants would cover making a garden safe for a disabled child but it's worth asking.

Edited

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I think my wife has looked into everything available. We have had grants in the past to do with the kids disabilities, etc.
Nothing available that we can see to help to the extent that it is needed at the moment.

OP posts:

Original poster

V2Schneider · 16/02/2025 11:52

Beetrooty · 16/02/2025 11:50

Best to get specialist advice on this as its complicated.

It sure is!

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Original poster

V2Schneider · 16/02/2025 11:55

Julen7 · 16/02/2025 11:50

I’m afraid a lot of people are in this position, it’s life and COL.

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COL?

OP posts:

Julen7 · 16/02/2025 11:56

V2Schneider · 16/02/2025 11:55

COL?

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Cost of living.

changesagain · 16/02/2025 11:56

How long before your lump sum is paid out if you've applied already?
If you think putting some of your lump sum into a SIPP might be a viable option I would set one up now on a low cost platform with a minimal contribution so it is up and running. Then you could potentially straddle two financial years in the next three months and make two lots of £2880 contributions, if the dates work out favourably for you.

Original poster

V2Schneider · 16/02/2025 12:05

Sarahconnor1 · 16/02/2025 11:43

There are 2 issues, depreciation of assets and whether 2 seperate UC claimants could be viewed as one financial unit.

if you have never paid regular child maintenance, then make some larger (than your monthly income requires) payments just after you receive a pension lump sum, its a risk that this would raise suspicion

Yes, I thought that too… there are lots of instances of me paying money to the wife for the kids stuff, but they are ad hoc. So I do pay “maintenance”, just not a regular set amount.

OP posts:

Original poster

V2Schneider · 16/02/2025 12:06

Julen7 · 16/02/2025 11:56

Cost of living.

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Ah 👍

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Original poster

V2Schneider · 16/02/2025 12:06

changesagain · 16/02/2025 11:56

How long before your lump sum is paid out if you've applied already?
If you think putting some of your lump sum into a SIPP might be a viable option I would set one up now on a low cost platform with a minimal contribution so it is up and running. Then you could potentially straddle two financial years in the next three months and make two lots of £2880 contributions, if the dates work out favourably for you.

It’s due 3rd week in March.

OP posts:

Original poster

V2Schneider · 16/02/2025 12:13

changesagain · 16/02/2025 11:56

How long before your lump sum is paid out if you've applied already?
If you think putting some of your lump sum into a SIPP might be a viable option I would set one up now on a low cost platform with a minimal contribution so it is up and running. Then you could potentially straddle two financial years in the next three months and make two lots of £2880 contributions, if the dates work out favourably for you.

So you’re saying:

start a SIPP.

Pay £2880 in March into the SIPP

Pay £2880 in April into the SIPP

So £5760 is now invested, and is not deprivation of capital from my lump sum?

And according to the info on a SIPP I have various draw-down options for how to take that money from the SIPP at a later date?

OP posts:

Cartwrightandson · 16/02/2025 12:33

V2Schneider · 15/02/2025 23:51

But that’s the issue, because they won’t actually give a clear answer… it’s like they are saying “we’ll know it when we see it”.

It’s the uncertainty. A search through Google only reveals more uncertainty, with many different opinions. That’s why I asked above if anyone had had direct experience of this sort of thing…

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Try dwp help on Reddit

https://www.reddit.com/r/DWPhelp/s/yRUnfuNyQI

Or benefits advice UK

https://www.reddit.com/r/BenefitsAdviceUK/s/m9A1u7i07t

ByQuaintAzureWasp · 16/02/2025 12:35

V2Schneider · 15/02/2025 23:00

We’re not divorced, but we live apart. The reasons why we live apart I’m not going into, but it wasn’t a breakdown of marriage… we’re still operating as a family, so to speak.

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Half of the lump sum is your wife's then? So why deprivation of assets. Perhaps ask half of ut to be paid direct to her and she can pay for repairs and a holiday.

Good luck, you sound very kind.

EmmaMaria · 16/02/2025 12:38

V2Schneider · 15/02/2025 23:28

No, I know that.
I was looking for advice, however, not censure.

The issue arises only because I have no choice but to take a large lump sum from my pension to make sure my family is safe… It would seem harsh to penalise someone who has worked for decades, paid into the system, who then has a need to look after the family.

But thanks for your understanding.

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Without any negative judgement here, but working and paying taxes is not a savings scheme for when you aren't working. So what you have paid into the system is irrelevant. You are lucky in that you appear to have some rather generous pension options, but you do have a choice - you always had the choice not to take the pension, and you also have the choice not to spend quite a bit of money on garden improvements for a property you don't live at or own, or on holidays. I have also "worked for decades", I am also dsiabled, and still pay taxes despite now being retired because of my pension income - why do you think it is ok that you should spend £15 - 20k on things that you do not absolutely need, in order to continue claiming Universal Credit?

Acc0untant · 16/02/2025 12:40

ByQuaintAzureWasp · 16/02/2025 12:35

Half of the lump sum is your wife's then? So why deprivation of assets. Perhaps ask half of ut to be paid direct to her and she can pay for repairs and a holiday.

Good luck, you sound very kind.

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In which case OP has the bigger issue of being seen as living together for UC purposes even though they aren't physically living together.

anothermnuser123 · 16/02/2025 12:43

V2Schneider · 16/02/2025 11:50

Thank you.
We’re financially separate, living separately, take different holidays (when we’ve managed to find a couple of days), etc. We don’t eat together, except on special occasions such as family birthdays etc. So I’d say we are not a married couple, except on the certificate.

I just need to make sure my kids are ok…

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I think even more reason to separate on paper then. It would allow you to justify a lump sum as you are diving the pension and then giving regular payments for maintenance.

It sounds like you are separated and just helping out rather than still married, which is likely much closer to a normal situation. If you sort the paperwork out to legally separate it may therefore make this a whole lot easier.

This will make zero difference to your kids, whether the paperwork says you are married or divorced, the day to day doesn't need to change at all, but what would change is your ability to split this money and it be all above board. It's worth getting some advice. You could post this scenario on the legal boards or ask citizens advice.

I dont see any reason why you couldn't start maintenance payments straight away.

Original poster

V2Schneider · 16/02/2025 12:53

EmmaMaria · 16/02/2025 12:38

Without any negative judgement here, but working and paying taxes is not a savings scheme for when you aren't working. So what you have paid into the system is irrelevant. You are lucky in that you appear to have some rather generous pension options, but you do have a choice - you always had the choice not to take the pension, and you also have the choice not to spend quite a bit of money on garden improvements for a property you don't live at or own, or on holidays. I have also "worked for decades", I am also dsiabled, and still pay taxes despite now being retired because of my pension income - why do you think it is ok that you should spend £15 - 20k on things that you do not absolutely need, in order to continue claiming Universal Credit?

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Taxes don’t pay for the future, but National Insurance contributions do…
Pension payments while I was working, made by me, are what provide my private pension.

As far as claiming benefits, I have been claiming since early 2024, so just about a year, after my whole adult life working and paying into NI etc. So I HAVE paid into the system to support people just like me in later life… that is exactly the system.

as for choosing to pay for repairs etc to a house I don’t live in, that misses the point. I don’t live there, but my kids do, and damned if I’m gonna see them in a state when I can do something about it!
I don’t think “Well it’s their house, so screw ‘em!”

You also miss the point entirely about the deprivation of capital… I’m not wanting to do it to get UC. My motivation is to make my kids lives better and safer. If I can do that, AND not suffer unduly myself, then why shouldn’t I?

The rules about deprivation of capital are somewhat unclear. If I just gave money away, to the wife, kids, etc., then yes, I would be intentionally and FRIVOLOUSLY depriving myself of the money. If I pay for actual, real life, things to improve the standard of living for my family, then that is far from frivolous. But it is unclear whether it would be accepted or not.

OP posts:

Original poster

V2Schneider · 16/02/2025 12:56

anothermnuser123 · 16/02/2025 12:43

I think even more reason to separate on paper then. It would allow you to justify a lump sum as you are diving the pension and then giving regular payments for maintenance.

It sounds like you are separated and just helping out rather than still married, which is likely much closer to a normal situation. If you sort the paperwork out to legally separate it may therefore make this a whole lot easier.

This will make zero difference to your kids, whether the paperwork says you are married or divorced, the day to day doesn't need to change at all, but what would change is your ability to split this money and it be all above board. It's worth getting some advice. You could post this scenario on the legal boards or ask citizens advice.

I dont see any reason why you couldn't start maintenance payments straight away.

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Thank you. I will look into it further… 👍

OP posts:

Original poster

V2Schneider · 16/02/2025 12:58

Acc0untant · 16/02/2025 12:40

In which case OP has the bigger issue of being seen as living together for UC purposes even though they aren't physically living together.

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That is a worry. We are financially independent. We don’t holiday together, eat together (except special occasions with the kids), or spend time together without the kids.

we’re married on paper alone, not in reality.

OP posts:

Bayonetlightbulb · 16/02/2025 13:03

Is there a reason the 19 year old can't help clear the house? Are PIP payments not meant to help with this sort of thing too?

EmmaMaria · 16/02/2025 13:03

V2Schneider · 16/02/2025 12:53

Taxes don’t pay for the future, but National Insurance contributions do…
Pension payments while I was working, made by me, are what provide my private pension.

As far as claiming benefits, I have been claiming since early 2024, so just about a year, after my whole adult life working and paying into NI etc. So I HAVE paid into the system to support people just like me in later life… that is exactly the system.

as for choosing to pay for repairs etc to a house I don’t live in, that misses the point. I don’t live there, but my kids do, and damned if I’m gonna see them in a state when I can do something about it!
I don’t think “Well it’s their house, so screw ‘em!”

You also miss the point entirely about the deprivation of capital… I’m not wanting to do it to get UC. My motivation is to make my kids lives better and safer. If I can do that, AND not suffer unduly myself, then why shouldn’t I?

The rules about deprivation of capital are somewhat unclear. If I just gave money away, to the wife, kids, etc., then yes, I would be intentionally and FRIVOLOUSLY depriving myself of the money. If I pay for actual, real life, things to improve the standard of living for my family, then that is far from frivolous. But it is unclear whether it would be accepted or not.

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Taxes don’t pay for the future, but National Insurance contributions do…
Pension payments while I was working, made by me, are what provide my private pension.

No they don't. National Insurance is also not a savings scheme. The money pays towards the current pensions. NI credits simply make you eligible for a pension which other peoples taxes and NI pay for.

As far as claiming benefits, I have been claiming since early 2024, so just about a year, after my whole adult life working and paying into NI etc. So I HAVE paid into the system to support people just like me in later life… that is exactly the system.

The system is to pay for people who have no income or not enough income - which is neither you nor me! That is why I am still paying tax even though I am retired. I have paid into the system for decades too - like you I have a private pension and that is what I am expected to live on - just like you are! The "system" is not to pay for people who want it in "later life". It is to pay for people who need it. You don't. Neither do I.

You also miss the point entirely about the deprivation of capital… I’m not wanting to do it to get UC. My motivation is to make my kids lives better and safer. If I can do that, AND not suffer unduly myself, then why shouldn’t I?

You are the one missing the point. You might like your kids to have a nice garden. You might like to pay for two holidays. But you should not be entitled to do that if it means that you continue to claim UC. That is deprivation of capital. What your motive is is irrelevant. You do not "need" any of those things and nor do your children. "Want" is not "need".