If we become concerned about you or anyone else while using one of our services, we will act in line with our safeguarding policy and procedures. This may involve sharing this information with relevant authorities to ensure we comply with our policies and legal obligations.

Discretionary Trust & Disabled Trust

Options
JonnycJonny
JonnycJonny Scope Member Posts: 144 Pioneering
edited May 2023 in Universal Credit (UC)
Do these types of trust impact UC and other means tested benefits ? That is, impact on the savings / capital regulations. Cannot find a concrete answer on web.

Comments

  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited May 2023
    Options
    Whether or not they count or are disregarded will depend on the exact wording of the trusts. They should be declared and a DWP Decision Maker will have to determine whether or not a disregard applies.

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1145107/admh1.pdf#page19
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • JonnycJonny
    JonnycJonny Scope Member Posts: 144 Pioneering
    Options
    Thank you for sign posting me to that document. 
  • 2oldcodgers
    2oldcodgers Posts: 743 Connected
    Options
    Do these types of trust impact UC and other means tested benefits ?
    First of all where are the funds coming from?
    UC is a means tested benefit which affects the claim if it is deemed to it being used to reduce your capital so as to increase your benefit payments. 
    Without knowing anything about your circumstances it is difficult to advise.
    I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc. 
    Effectively that type of trust cannot make any payments to me as I was the donor. 

  • poppy123456
    poppy123456 Community member Posts: 57,253 Disability Gamechanger
    Options
    Do these types of trust impact UC and other means tested benefits ?

    I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc. 
    Effectively that type of trust cannot make any payments to me as I was the donor. 

    If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people) 
    You can’t just give your money away and still be expected to claim means tested benefits. 
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited May 2023
    Options
    I agree that setting up a trust for others using money you inherited is deprivation of capital if you are seeking benefits for yourself. 
    If you are asking are possible benefits for the beneficiaries of the trust then the funds may fall to be disregarded then considering their capital.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • JonnycJonny
    JonnycJonny Scope Member Posts: 144 Pioneering
    Options
    So if I were the beneficiary of a trust ( set up following an inheritance ) and money was used for goods / services in support of my disability the trust fund itself would be disregarded when it comes to means tested benefits ?
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    edited May 2023
    Options
    So if I were the beneficiary of a trust ( set up following an inheritance ) and money was used for goods / services in support of my disability the trust fund itself would be disregarded when it comes to means tested benefits ?
    As advised, it depends on the exact terms of the trust.
    calcotti said:
    Whether or not they count or are disregarded will depend on the exact wording of the trusts. They should be declared and a DWP Decision Maker will have to determine whether or not a disregard applies.
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1145107/admh1.pdf#page19

    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • 2oldcodgers
    2oldcodgers Posts: 743 Connected
    Options
    Do these types of trust impact UC and other means tested benefits ?

    I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc. 
    Effectively that type of trust cannot make any payments to me as I was the donor. 

    If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people) 
    You can’t just give your money away and still be expected to claim means tested benefits. 
    At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment
  • poppy123456
    poppy123456 Community member Posts: 57,253 Disability Gamechanger
    Options
    Do these types of trust impact UC and other means tested benefits ?

    I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc. 
    Effectively that type of trust cannot make any payments to me as I was the donor. 

    If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people) 
    You can’t just give your money away and still be expected to claim means tested benefits. 
    At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment

    Then why did you comment on the thread with your story when it's completely different circumstances to what the question is for. That's misleading information.
    I would appreciate it if members wouldn't tag me please. I have all notifcations turned off and wouldn't want a member thinking i'm being rude by not replying.
    If i see a question that i know the answer to i will try my best to help.
  • calcotti
    calcotti Community member Posts: 10,010 Disability Gamechanger
    Options
    Do these types of trust impact UC and other means tested benefits ?

    I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc. 
    Effectively that type of trust cannot make any payments to me as I was the donor. 

    If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people) 
    You can’t just give your money away and still be expected to claim means tested benefits. 
    At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment
    it is incorrect. When claiming a means tested benefit deprivation of capital could be considered to have place if capital was given away prior to claiming in order to try and become eligible for benefits. 
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • JonnycJonny
    JonnycJonny Scope Member Posts: 144 Pioneering
    Options
    Thank you Calcotti for your input - the link was very useful. Not sure why another Member began writing on this discussion. It turns out Scope has a short page on all this. It says:

    'You can put money and property into a trust for a disabled person. Trustees manage the trust. This could be:

    before you die
    after you die, through your will.

    This type of trust is good for managing:

    Support with money
    Risk of financial abuse
    Means testing for benefits

    For now it is all hypothetical - but when it comes to probate, forewarned is forearmed.


Complete our feedback form and tell us how we can make the community better.

Do you need advice on your energy costs?


Scope’s Disability Energy Support service is open to any disabled household in England or Wales in which one or more disabled people live. You can get free advice from an expert adviser on managing energy debt, switching tariffs, contacting your supplier and more. Find out more information by visiting our
Disability Energy Support webpage.
If we become concerned about you or anyone else while using one of our services, we will act in line with our safeguarding policy and procedures. This may involve sharing this information with relevant authorities to ensure we comply with our policies and legal obligations.

Find out how to let us know if you're concerned about another member's safety.