Receiving a lump sum.

Kneesha1

Hi hope someone can help me with a bit of advice. I claim enhanced PIP for both elements. My husband is my full time carer and receives Carers Allowance. We claim Income Support as a couple, though it is in his name. I also receive housing benefit and full Council Tax relief due to disabilities. My query is, shortly I am to receive a payment for a Private Pension of my recently deceased father of £30.000, and need to know what/how it will affect our benefits. Advice would be greatly appreciated.

poppy123456

The lump sum will be classed as savings and will affect all your means tested benefits such as, Income Support, housing benefit and council tax reduction. Once the money goes into your bank you'll need to report the changes and all those benefits will end.

Once your savings go below £16,000 you can then claim Universal Credit. There will be a deduction of £4.35/month for every £250 or part thereof over £6,000. Unfortunately, it will not be be possible to reclaim IS or housing benefit. Council Tax reduction can be reclaimed through your local Authority but some have a maximum savings limit of £6,000 so you'll need to look at the rules of your LA as they all have different rules.

PIP and carers allowance will not be affected because they are not means tested benefits.

66Mustang

What is the nature of this pension? Is there any way you can leave it as a pension and not draw it out in one single lump?

We are dealing with something similar, except the person is still alive and planning for their passing. Their pension is a SIPP and we can leave it invested if we want, and just draw money as and when we need it.

Kneesha1

Hi thanks for your reply. It's my share of a 50/50 split with my sister and I've agreed/signed to agree a complete draw down. The only pension I have is the state pension. So presumed it would still be classed as savings. 

poppy123456

You only have a state pension once you reach state pension age, when you'll be able to claim it. The lump sum you'll receive will affect the benefits i mentioned above.

Kneesha1

Hi thanks for your advice, I had thought i would lose those benefits you mentioned. But thankful that PIP and Carers Allowance aren't affected. I also wasn't sure if my husband could claim any benefit as his only income would be carers allowance. 

poppy123456

He can't claim any means tested benefits by himself because you're living together as a couple. The lump sum will prevent both of you from claiming any means tested benefits.

If you have any debts that need paying you can pay those off, if this then brings those savings down below £16,000 you can claim Universal Credit. Paying off debt is allowed for UC purposes and will not be treated as deprivation of capital.

If your health condition limits your capability to work then you'll need to report your health condition when you claim and provide a fit note within 7 days. You will then be referred for the work capability assessment.

Kneesha1

Hi, I claim enhanced payments on both elements of PIP which isn't counted as income, I was led to believe also as my full-time carer my husband claims Carers Allowance which if I'm right doesn't count towards income. Is this info I received correct or have I been misinformed. 

poppy123456

It depends what you mean as "counted as income" they are not means tested so savings/capital do not affect either of them. Carers allowance is taxable income but PIP isn't.