Severe disability premium lump sum payment

Helniche

Hi i'm  new to the community so I am unsure whether this is the right category for this or whether you will be able to provide support or signpost me in the correct direction. 

As some know, the DWP has been doing some sort of investigation concerning ESA and the SDP element of it.
As far as I can make out, if you claimed ESA and also DLA/PIP you were likely to be entitled to SDP. This appears to be  the case for me although it is probably more complicated than that.
Anyway, i was contacted  by the branch dealing with this and have apparently been awarded a lump sum--historic arrears.  However, I am still on benefits. I will be informing them all of the change in circumstances if or when it happens.

From research and what i've been told is that due to the amount 

 1) Esa should be unaffected  and the lump sum will not be regarded as savings for the lifetime of my claim.
 2) PIP is not means-tested and probably should not be affected.

Points 3 & 4, I am unclear on and have contacted the local council  to see if they have better information.

3) Housing benefit will be affected, however, there may be a grace period of 52 weeks. it is unclear.
4) Council tax support is pretty much guaranteed to be stopped.

The next step is then what to do with the money and this is where I am getting nowhere. Most advice appears geared towards benefits claims, appeals and debts. The above appears to be what most welfare solicitors deal with.
I am unsure who I should turn to for answers to the following sort of things.

I need answers with things like
1--If interest is earned on this money, will that interest be counted as savings?
2--If the money is invested and spread out in different financial stuff, will that cause it to be judged differently by the benefit system?
3--Am I meant to keep the lump sum separate from any savings I currently do have?

It may be nothing to worry about but I cannot find information on how a lump sum like this may affect you after the initial change of circumstances, and if  there are possible long-term effects if some of the money is invested etc.

I am very confused. Please help.

sxc_afro

I have had a dig around to see what I could find and this is what I have seen on multiple websites, but it's so difficult to know if it's actually correct or not.

Personally I think your best bet is to contact the DWP and just tell them that you got a backdated lump sum and how much it is, this is what I found.

1) Savings doesn't mean money in a savings account, its ANY money you have direct access too, from ANY bank or bank account type.
2) Savings under £6000 is fine, nothing happens
3) Between £6000-£16000, for every £250 over £6000, if you're on UC £4.14 will be deducted each week, if you're on legacy benefit it's £1 a week.
4) I don't know if this is 100% true, but it's what I read, that when given a lump sum, it doesnt count as savings for a year. 

One thing you MUST NOT do is to try and reduce the money you have by giving it away, giving it to others, or buying things that could be argued that was bought to "use up" the money, its called deprivation of capital and they will treat it as if you still have the money meaning you would have deductions still placed even if you are below the limit. Anything you do buy keep the receipt for so you can show what you've used the money on if they ask for it. You are allowed to buy anything you want, it's more about if someone let's say chose to buy a super expensive kettle instead of a more affordable one, they could argue that was unnecessary.

Ringing the benefits office is the only way you will know for sure what you need to do if anything at all, I would hope that if someone gets money backdated that they are not then penalised for it, I hope this helped a bit. 

poppy123456

sxc_afro said:

3) Between £6000-£16000, for every £250 over £6000, if you're on UC £4.14 will be deducted each week,

That's not quite correct. For UC purposes it's £4.35/month for every £250 or part there of over £6,000. Backdated money is disregarded for 52 weeks for all means tested benefits and in that time you can do what you want with it.

Helniche

Thank you for your responses. I can elaborate now that I have received some more information.
 ESA which is where the lump sum is coming from has stated that the sum will be disregarded for the lifetime of my ESA claim.
Housing benefit and council tax support, at least in the area I live, will regard the lump sum  from DWP in the same way as IR ESA.
That means if they haven't got it wrong that the lump sum will not be regarded as savings or capital for the lifetime of the ESA claim. It is dependent on the ESA claim. 
I presume this all means that the saving limits can be disregarded for the lump sum.

The bigger problem is what to do once you have informed all benefit offices of the change in circumstance and received confirmation of how the money will be treated by them.

What are the next steps? That is where I am confused. Obviously, one would hope to use some of the money to help in the areas of problems they  are having but that would still leave some just gathering dust.

As said in the original post 

"The next step is then what to do with the money and this is where I am getting nowhere. Most advice appears geared towards benefits claims, appeals and debts. The above appears to be what most welfare solicitors deal with.
I am unsure who I should turn to for answers to the following sort of things."

Do I need to worry about taxes? Wills? Discretionary trust? how would interest earned on the original lump sum be judged by ESA? Should the lump sum be kept separate from the normal household accounts? 

poppy123456

You can do what you want with the money as you've already had confirmation that it's disregarded for the life of your ESA claim, same applies for housing benefit and CTR.

Income Related ESA isn't a taxable benefit so you don't need to worry about that. Can't advise about wills or discretionary trusts and you'll need to get some expert advice regarding that.

You do not need to keep it separate from your normal bank accounts.