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.

Ultimately, because your mum transferred this money to you, a while ago and without discussing the implications of it being needed to fund care for her, or how it would impact you, it might be worth seeing if you can get some legal advice on how long it needs to be from her giving it to you, and her going into a care situation that she would need to pay for. It’s quite complex, but this kind of money moving and paying for care has various time constraints, basically to stop elderly people giving their capitol to family so that they don’t have to use it to pay for their own care. I know you are busy and stressed, but a conversation with a solicitor is probably a good idea, before you use it to pay off a chunk of your mortgage.

Repay your debt.

Put away 3-6 months worth of your core outgoings/expenses into an accessible account (accessibility in an emergency is more important than the interest rate on the account.

Open a SIPP and pay in up to your annual allowance.

JISAs or JSIPPs up to annual allowance for the kids.

Care home fees are different to inheritance tax and from Google there doesnt seem to be a time frame. It’s more based on if you knew you would need to pay for care. And the fact that her mother transferred it immediately after getting a diagnosis would likely class as deprivation of assets even if it was a long time ago.

Agree. There is no limit on the length of time that a local authority can go back to see where money went. Op says her brother is going to pay mum's care costs if needed but with dementia these could literally run into thousands a month in a care home.

It can be covered under NHS continuing healthcare. Its not a guarantee and goes on individual circumstances but it can be covered and is worth looking into and applying for.

But if her care isnt covered and is needed to be funded, it doesnt look good at all that the money was given immediately upon diagnosis.

I have no clue what would happen in these circumstances though with regards to whether they try to recover funds etc

There is no time limit.
It's obvious what has happened, OP's mum has transferred money to OP to avoid it being taken into account during a possible financial assessment.
Hence the promise not to spend it.
OP didn't expect to need to claim UC.
All this has changed and now the money is a hot potato upon which the chickens have come home to roost.
I lurve a mixed metaphor me

This is why I think OP needs to spend some on future proofing , paying down personal debt etc, but not pay all off on her mortgage and keep at least £50k in reserve

OP reckons she going to either look after her mum or pay her care fees.

My mum did all this over the last decade, my dad had dementia and she consulted solicitors to make sure his care needs didn’t wipe out ‘her half’ of their savings and house equity. It has to be done a certain time in advance, and a solicitor is the best person to sort this.

You have to use it. Not take money off the taxpayer! That's disgraceful.

You're not entitled to UC and why should you be? It's for people with hardly any money. Not people hoarding 80k?!

It’s not a clear cut case at all. It depends how much the giver has left.

House that a spouse lives in is disregarded. It's only if the house was sold - say to downsize - then half of any equity would revert to the person requiring care.

Sorry but you are having a laugh.

I work full time in a high stress job and insert less than you and am not entitled to UC despite having a child and I dont have savings so with 80k in the bank you absolutely ahould not be on it.

It is if they apply for local authority funded care. If they have enough to not need funded care then of course it doesn't matter.

You're talking about 2 different things.
House sales to fund a care home , and house sales when the last parent dies and IHT.

Not sure this is good advice now, given the update that OP’s mother transferred the money immediately upon her dementia diagnosis.

I'm talking about funding care costs, yes.

Has the mum shifted her money in an attempt to avoid potential care home costs?
That won't work.

A house can be sold though to pay for care home fees if only 1 person lives in it.
My parents took out a Deed of Trust which mean when one of them dies, their share passes to me and my sister. So we own 1/4 each and the other parent owns 50%. It can't therefore be sold to finance a care home because me and my sister own 50% together. However, care home fees can be 'on credit' and paid when the person dies and their assets are available.

I thought that couldn’t happen anyway? The state can’t remove a spouses home to pay for care fees can they? Unless you mean your mum didn’t actually own the house? As in wasn’t on the deeds etc and they weren’t married? But I’m pretty sure they can’t do that to a married couple regardless.

Yes, a charge is put upon it.

It doesn't happen.

My MIL was in a care home for 8 weeks.
My H and his sister inherited her house but they had to pay for the 8 weeks care out of the assets when the house was sold/ they inherited savings.

The way this works is that if you have over £23K in savings, that is used for your care home fees. When that runs out the option is usually a care home provided by the local authority. Their state pension goes towards the care fees.

If a spouse is still living in the marital home they will not be forced to sell up.
However, if the care home is private, they may have to repay the fees eventually - out of their assets when they die.

If you make generous gifts to anyone in your old age, it can be seen as deprivation of assets to avoid either IHT( if it's under 7 years before you die) or care home fees and other benefits.

You can make gifts over a lifetime to anyone - but the limit is £3k pa (unless for weddings etc) to be 'tax exempt' if you die within 7 years of making the gift.

One way round this is a drip drip approach to give away £3k pa but it has to be recorded as a regular payment / gift to prove to HMRC that it's a regular gift.

Yes, my FIL was in a care home for 12 months before he died but there was no POA so we had to apply for deputyship as he didn't have capacity. Deputyship came through 4 weeks after he died so the debt for care was paid after his will went through probate, about 18 months in total.