UC Disregarded Income question (regarding inheritance)

Eudora

I rent privately, am close to state retirement age, currently self-employed and in receipt of UC with a fit note that qualifies me for Limited Capability for Work. My mum passed and I will inherit an inheritance this year. It is enough to purchase a very modest home although I may need to move out of my area. As I am using the money to purchase a home in preparation for my retirement, can this income be disregarded for a while, as I hear it can be for so long if it is not spent and is for the purpose of purchasing a property where I will live.

Please can anyone advise? There does not seem to be specific info online.

poppy123456

The disregard doesn't apply in your case because it's inheritance. It only applies if you're selling the home you live in and plan on buying another.

Once the money goes into your bank you must report the changes and UC will end because your capital will be more than £16,000. If you're also claiming council tax reduction that will also end.

Eudora

Thank you for that. Actually the funds will be held in a solicitor's account, not in mine until I request it, which I won't until I find a property suitable for my needs. So do I still need to report this?

poppy123456

I'm afraid that's not the best idea you can have. Once the funds are available they must be paid to you and you will need to report the changes to UC. UC will eventually find out due to it being inheritance. Im not even convinced that a solicitor could hold onto inheritance like this.

Eudora

OK thanks and what if a family member had it transferred to them to keep hold of until I find a place? Just asking questions to cover all possible scenarios 🙄

Ideally, I should look at finding a property straight away but not been well so not in the frame of mind to be packing up and moving and my tenance due for renewal in less than 3 months.

poppy123456

That would be treated as deprivation of capital and you'll still be treated as having that money and your UC will still end. I'm sorry but you can't just "hide" inheritance money and still be expected to continue with means tested benefits.

Eudora

Thanks again for your responses. Just needed some questions answering to some scenarios. Having to declare the inheritance, I will naturally have to use the money to supplement my monthly income (which is reduced due to ill health) and as a result of losing benefit whilst the funds are liquid, most probably will not be able to purchase a suitable place now, which is a shame, especially as in the long term it means I wouldn't need to claim benefits. At some point in the future too, with owning a property, should I have to go into care, I would have that to fund it. Such stupidity as it seems like the DWP system are self-sabotaging!

poppy123456

I can only tell you what the rules are. There's also another thing to consider if you did purchase your own home. If something went wrong and repairs are needed how would you afford to do pay for those if all your money is spent buying the home?

MW123

https://forum.scope.org.uk/discussion/comment/889277#Comment_889277

Condolences on the loss of your mother. Solicitors manage client funds in designated accounts to comply with regulations and protect client money. Your solicitor will charge fees for this service, covering administrative costs like fund management and regulatory compliance. If your inheritance is managed and held by a solicitor, it's important to report this to UC to comply with regulations and prevent any future issues or complications.

I understand your perspective on planning for the future without relying on benefits. However, UC is intended for individuals facing financial hardship with no other financial resources. If your income has decreased due to illness, using your inheritance to supplement it could be a practical option.

I recommend discussing with a financial advisor or your bank about potentially investing some of your inheritance wisely. This could generate additional income for you in the future.

Eudora

Thanks for that. Since posting my question here, I have actually found a flat that is affordable and under a government supported shared ownership scheme. I expect my inheritance will be forthcoming in a few weeks and the flat (seller has accepted my offer although no written confirmation yet). There will be a delay from his end as the flat was his mother's, who is now on end of life, so he said it will go to Probate, which he is going to deal with himself. So I guess there will be a period of time when I won't qualify for the UC support. I have written to them and they said this:

Once you have received the money, you would need to declare it via report a change, we would then ask you to provide evidence of the capital and book you an appointment. After that it would go to a decision maker to decide how to treat it and whether any of the disregards currently apply, if you bought a house in the same assessment period you declare it it would still go to a Decision Maker for them to look at.

At least it is worth a try and as you say, declaring the income will prevent the fear of any issues cropping up in the future.

poppy123456

As its inheritance it's unlikely that the money will be disregarded for you to buy the property. As it's shared ownership then you'll have some rent to pay the landlord on that too, just incase you weren't aware of that. Good luck with the purchase.

Eudora

Thank you.

FYI There is no rent as such to pay - it is a special government backed scheme. There is just the service charge to pay which covers quite a lot of things and is quite a modest sum compared to most shared ownerships and other leasehold properties with service charges, ground rent etc. With the property I hope to purchase, you can only own 70% of the property but you don't get charged rent on the remaining 30%. You have to be over 60 to qualify.