Savings in my name stopping Universal Credit despite low income

[slowingdown1]

can anyone more financially savvy than me help?
Recently divorced, ex DH pays minimum child maintenance. Have a low
income due to home working in low demand role so I can care
for 2 x disabled children. Yearly
salary is £31k before tax, I save £100 monthly into pension. I claim Scottish disability payments for both kids which go on private treatment / therapies. Each month I scrap by and have a constant low credit card debt despite my best efforts. I have savings that were gifted to me by my mum as long-term financial security of £80k. Although the money is legally in my name, I have made a firm promise to her that I will not use it, so morally I do not feel able to touch it until she is no longer with us.
My current income is low, but because these savings are in my name, they are preventing me from applying for Universal Credit as above
the threshold.
I understand I can’t eg transfer the savings into trusts for my kids as this would constitute deprivation of capital. I can’t ask my mum to eg take it back for the same reason.

This.

I"m not missing that part. I know how the system works, and how it's designed - I just think it's a crap system that's shit for disabled people who I would like to see get a better deal. People are allowed to claim UC while having massive amounts in their pension so long as it's not claimable from what I understand - it's counted as disregarded capital. But you're not allowed to keep what could be a smaller amount as savings even if you have little to no pension provision, which is the case for many carers as you probably know. Why does the person with the pension potentially get to keep vast sums of money (eg if they were a high earner who became long term unemployed) for a comfortable future retirement (even when they may not be disabled and don't have disabled offspring and will likely spend it all on enjoying themselves) but the person with savings but not a pension has to lose theirs? It's not like someone with two severely disabled kids is likely to be planning on spending the money on designer clothes and round the world cruises. It's obviously going to go on disability costs.

There have been provisions in the past to try to help people like the OP or her mum provide for disabled children or grandchildren etc through arrangements like a Disabled Person’s Trust (a disability trust fund) which is designed to pass on private wealth without the disabled person losing benefit entitlement (to make the system fairer in a way you object to). Why should non-disabled siblings who've had a lifetime of opportunity and earning potential get to benefit from their parents wealth when the sibling who actually really needs the money is barred from receiving it in many circumstances? These arrangements are complicated though and I don't know if they'd be accessible to the OP.

I fully appreciate that many people don't have any access to inherited wealth and that is of course deeply unfair but to try and deprive those who could have their lives made very slightly easier by a bit of family money seems like a something that impoverishes people unnecessarily.

And of course I know what people like you would give to have that much money in the bank. It's my position that if you ever found yourself in that position that you would be able to use the money to make long term improvements to your difficult lives and not have the money effectively confiscated by the government. I don't want you and your kids to be suffering if there's a way to ease that.

What are the reasons your mum has made you not use the money? If it's meant to be your inheritance what exactly is she expecting you to do with it? 😐

Whilst your situation sounds difficult, I think the real morality issue here is that you expect tax payers to give you more money when many of them are in a situation where they themselves have no savings yet you have £80k.

How many people have not one but two disabled children. I don’t nor do I personally know anyone that does.
It isn’t the same as an average person the Op has worries you can never understand.

Spending it a small amount at a time won’t count as deprivation of capital.

if you go £1000 into your overdraft each month on general bills and use the money to cover that that’s absolutely fine.

what you can’t do is spend the 80k in a way that’s obviously shifting it purely to get benefits.

So £1000 a month on general bills is fine, spending 75k on cash gifts for your children is not.

You get a 1k personal savings amount per year that's tax free. 80k even in a low paying interest account will generally generate income above this amount so chances are your tax code has been changed to reflect this- so you are paying tax on it . Yeah I know that seems annoying but the reason you get charged this is £80k is generating an income, which the government wants a cut of so they can pay people UC.......

I truly don't understand why you would run up debt on a credit card when you have £80k in the bank. That's nuts.

And the govt thinks so to. If you just look up their website it very very clearly says this. You can pay down debt. https://www.gov.uk/guidance/universal-credit-money-savings-and-investments

I find it galling that you are looking for ways to hide your pot of £80k so that you can claim an additional £20k ish per year from the government. The government, rightly, expects people to support themselves, until they can't. You can. So just do it.

I think you have been given bad information OP about what constitutes deprivation of assets. In your situation, using the £80k to pay off debts and day to day necessary living expenses wouldn’t fall under this category. Just keep good records in terms of bank statements/receipts to show where the money has gone. You would have a very strong case to appeal against any refusal of UC, if that should happen.

You can't be serious.

I understand your reluctance to spend your £80k given what your mum said but her wishes make no practical sense. You are being criticised because it's a truly peculiar situation to want benefits when you have a large sum of money in the bank, a larger sum of money than many people have. If I was in your shoes I would forget about claiming benefits and use £1k of your savings every month to supplement your income. Savings are for difficult times. You are having a difficult time. Using your savings gives you 6 years of boosted income. Who knows what your position will be in 6 years. But 6 years less of worry us quite possibly what your mum would like too.

I may get burned for this opinion, but I always thought benefits were for those who had no other means - for basic survival. Not to top up your earnings so you are comfortable..

Paying a mortgage down is hardly frittering it away

I imagine your mum meant don’t go out and big clothes or go on holidays

Is it in an high interest savings account? Use the interest to top up your income.
3% is £ 2400 a year, so 200 à month

You would think so, but that's not the case these days.

Benefits for disabled people are very much NOT for basic survival. This is an unpleasant perspective that overlooks the reality of life with moderate to severe disabilities. I do not begrudge my tax being spent on making disabled people's lives comfortable, pleasant and fulfilling, not just basic survival.

If your mum has said this the consider how controlling she is. She has given her daughter 80k, when you’re apparently struggling to get by financially and she’s told got under absolutely no circumstances can you use the money you now have in your account to make your life easier?

Yes, I was just going to suggest this also.

She's not controlling she's got dementia. She gave her daughter the money when her daughter was married and financially stable. The mum didn't understand how that would impact on her finances in future! OP is being naive and has been badly informed but nobody here is being controlling or malicious.

£200 a month isn't going to cover OP's monthly shortfall.

I’m afraid that’s what savings are for - tough times. If they get below £16k you can claim.

My current income is low, but because these savings are in my name, they are preventing me from applying for Universal Credit as above
the threshold.
I understand I can’t eg transfer the savings into trusts for my kids as this would constitute deprivation of capital. I can’t ask my mum to eg take it back for the same reason.

Sorry but everyone saying people are being unfair...

This clearly reads as "I want to claim UC" to subsidise her "shortfall" because she won't take her money out the bank, and that she already tried or thought about applying.

It doesn't read as "I've been told I'm not allowed to make day to day purchases and don't know how to cope"

OP changed track once she realised how catagorically immoral it was to claim benefits whilst having huge savings in the bank, not just in her name but that actually belong to her.

The benefits budget barely covers the kids who live in emergency accommodation living month to month. When you've got next door asking to borrow sugar till payday and see someone looking to top up their 80k savings and yearly 31k with 20k annually because they don't see why they should fritter their own money away on living expenses it starts looking less about me "trying to deprive disabled children" and more about OP just wanting more than she's entitled to.

I am gobsmacked. You’re here asking for help on how you can avoid using your savings to plug the gap in your household finances so you can access nearly £2000 a month from us, the tax payers?

You’re the reason why I pay £1600 a month in tax which actually means that I’m working 4 days for free.
You’ve got 80k. You’re not entitled to any more of taxpayers’ money.
Get a grip.

You can spend it running it down to make ends meet.

You can’t just buy a Mercedes with it.

Sounds like a communication issue between you and your advisor.