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.

Your capitals read as though I’ve angered you 🤔
my mother in no way was being calculated. Her diagnosis came 8 long months after symptoms started and she was, by then, making strange decisions not irregularly. I think she thought she was doing a kind thing to help her grandchildren and had no knowledge or experience of asset gifting.

Just to say about the wet room, you may be able to get one via your council - https://scotland.shelter.org.uk/housing_advice/repairs/paying_for_adaptations

Why did she not gift directly to them? And why do you think she wouldn’t be happy about you spending it now? Surely she wouldn’t want you to be getting into increasing debt when her money could help?

she simply gifted it to me to ensure their medical bills and needs would be met after she dies, she’s been their (and my) biggest champion. I don’t like breaking promises but can see from this thread I have no choice but to dip into it to cover living expenses now, despite that not being her intention, and that I do so carefully so that when it runs out and the kids are still my responsibility, I can claim UC without being accused of fraud.

As someone else upthread said I think your mother gave it to you to avoid care fees. And had your life stayed the same there would be no issues. But now you’re struggling. If you spend it and your mother gets investigated then your mother is in trouble. If you don’t spend it you can’t claim anything and you’re getting further and further into debt. THAT is the catch 22. Not the fact you simply have 80k in the bank.

@Nattin this is probably what the CAB volunteer was referring to re Catch 22, very perceptive of them (and you).

But she also said it was not to be spent until she died.
The question is why?

So she was being canny and trying to avoid inheritance tax, or the money being put towards care?

Just drip feed it monthly to cover your costs ?
Leave invested you will be earning interest too
It s your money in your name so use it as needed

Maybe her mother thinks, erroneously, that if the money is not 'spent' she's not liable for reducing her assets in order to avoid care home costs.

Maybe she thinks if she was ever going to be investigated, she could ask OP to return the money before she was found out?

At 4% rate: 3,200 per year interest (approx. 266.67 per month) (first 1000 is tax free and you can put some in an ISA?

So there is the 266 £ a month extra for you ?

But surely she could have just made a will and you got the inheritance if it was for after she’d died? That’s quite literally what a will is for. Unless she was worried it would get eaten up in care fees or inheritance tax. In which case she gave the money earlier to try and avoid that. But you say that’s impossible that was her thinking.

I’m not saying your mother’s thinking is wrong. I actually fully understand why someone would want their family to have their money and not care home fees. But it’s left you with a big problem because she legally shouldn’t have done what she did.

This is bonkers, either the cab volunteer was clueless or you misunderstood, of course you can spend your money on debt or mortgage, you can’t really think you have to save it and are banned from spending it?

She can give you a gift as much as she likes and if lives seven years more is fine fir iht

Anyway you have the money in your account use it sensibly over next five years ...then it might be below threshold and you can claim .

7 years is the rule for inheritance tax not care home fees. There’s no time limit for that.

It was, I believe, meant as a comfort to her to know that we would be ok when she is no longer here. That is all.

For goodness sake @slowingdown1

You are not entitled to UC because you have money available to live on. You are expected to live on it. You will not get UC whilst you have over £16k to live on.

You need to use the money you have to live on. This is not deprivation of assets. That’s just nonsense and no one at CAB told you that.

You cannot give it away, or go out and buy a boat, or go on a few luxury holidays of £20k or anything like that. That would be deprivation of assets.

You can, and are expected to, use it for your normal living costs for as many years as it lasts. If you’re short £1800 a month to cover your living costs then you withdraw that from your savings. You can also withdraw more if you want a take away, or a bog standard family holiday. Anything that would be considered just normal living. You spend your money on that.

You can also pay off your debts (credit cards, overdrafts, etc).

You can pay off the mortgage, but I’d be careful of that. If your mortgage is affordable then I’d rather have some money in the bank than the mortgage paid off and relying on UC maybe

In several years, when you are under £16k in savings, you can apply for UC. You won’t get the full amount until your savings are less than £6k, but you’ll get something once you go under £16k.

It’s ridiculous that you thought you should UC when you have £80k to live off. If your mum didn’t want you living off it then she should have put it in trust for your children. She didn’t, so it’s your money and you need to use it on your living costs.

Honestly I think she’d be much more comforted to know you weren’t wracking up thousands of pounds of debt when you didn’t need to

Just pay your mortgage down, I canr beleive you’ve sat on it for 8 years

Her thinking was not wrong, I agree. However it was likely foggy with slowly progressing dementia and a rash, kind decision that neither of us knew at the time would cause any problems. Back then I think was part of a household of 2 incomes, a loving partner and someone to share the load with in every sense. Things changed, as life does, and I found myself with no partner, no income from him for the kids (apart from the pittance he is court ordered to pay), limited in my earnings because I must be able to work remotely and in a job that allows flexibility so I can work from the home ward regularly. And that money, that I was trying to preserve for the kids as she wished, will need used so I can claim UC. And pages and pages on this thread have confirmed how hard this is to do without raising suspicions at point of claiming. That is all.

Using savings to supplement your income is NOT deprivation of assets. You can use this money to avoid CC debt, and to live on without it being deprivation of assets. If you burn through 80k in a year JUST so you can claim UC, well thats different.

Thank you, I will do this. I had understood from CAB they would not
allow this so I clearly misunderstood.

Jesus your attirude to this is pretty unpleasant. You don't use the money so that you can claim UC. You use it because you've got it and its yours

What attitude? Simply asked a question as it seems to be a complex issue wrt deprivation of asset clauses.

Did no part of you think that’s batshit I should check?

It’s not a complex issue.

You cannot get UC because you have money to live on. So you need to use that money to live on - in a normal way, your normal living costs. You can’t go and be extravagant and blow through it because then it is deprivation of assets. But you use it to live on.

This is not complicated and no one at cab told you that you are not allowed to touch that money. They told you that you cannot go out tomorrow and spend £80k, then come home and apply for UC. You have to live on that money, within your normal means.

Erm no, I just listened to the advise of the CAB financial advisor whom I had no reason to thing was “batshit”