Housing and independent living
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Gift from Parents for House Deposit

SergeAndJanetSergeAndJanet Member Posts: 3 Listener

Hello lovely Scope friends.

My dad has just sent me a cash gift, as a deposit to buy my home.
Because it's over the 16,000 threshold, I have been told I will be penalised for receiving it!
I have been told I will lose all my Universal Credit and other benefits.
This is heart-breaking.
I hope they let me keep my PIP at least.

Now, we have to use the deposit to live on, which ruins our chance to buy the house.
Seems like a no-win situation for me.
What started off as a dream-come-true, has become an awful nightmare.

Any advice or suggestions please?

Thank you
Serge and Janet

[Email removed by moderator]


  • janer1967janer1967 Member Posts: 9,087 Disability Gamechanger
    Hi @SergeAndJanet Welcome to the community what an awful situation.

    Maybe you should have done this different and waited till you found a house and your dad pay the deposit direct I don't know if this would be a possible solution or if it would be classed as benefit fraud but seems so unfair you are now living off the money intended as a deposit

    I suggest you get some legal advice before doing anything as it will be hard to do anything if you have already declared this to DWP as they will want to know where the money has gone

    Your PIP is not means tested so this will not be affected
  • CressidaCressida Member Posts: 770 Pioneering
    edited June 2020
  • woodbinewoodbine Member Posts: 3,710 Disability Gamechanger
    Hi @SergeAndJanet, welcome to the scope community, I would agree with @janer1967 that the money could be sent by your dad direct to the lender, if you have already got the 16k in your account its too late for that, It will mean losing all means tested benefits, but won't affect PIP.
    Once your capital goes below 16k benefits will be reduced by £4.30 per £250 i.e £17.20 per £1.000.
    my advice is given freely and is correct to the best of my knowledge.
  • SergeAndJanetSergeAndJanet Member Posts: 3 Listener
    Thank you for your comments friends. I have rejected the payment and sent it back. Back to square one now! 
  • Adrian_ScopeAdrian_Scope Testing team Posts: 7,924

    Scope community team

    edited June 2020
    Hello @SergeAndJanet. Having capital over £16,000 will mean you're not entitled to Universal Credit, however using that money to put a deposit on a house that you're going to live in is usually okay and isn't usually seen as deprivation of capital. So once you've received the £16,000 and updated them, your UC would stop temporarily (PIP wouldn't be affected), then you'd update them again once you've used it for a deposit, and a decision maker would look at the circumstances and situation and should usually reinstate your UC.

    Sadly it's not as simple as giving the £16,000 back as that can be seen as depriving yourself of capital to claim more in benefits. 

    I'd strongly advise before you and your father transfer any more money around that you stop and get some advice from CAB, Welfare Rights or another benefit agency. You can find one near you at: https://advicelocal.uk/
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  • atlas47atlas47 Member Posts: 118 Pioneering
    Hi @SergeAndJanet

    A very warm welcome.

    As you have now returned the money, there should be no problems with the DWP.

    Looking to the future, if you find a property, then you need to take advice from a Mortgage Broker, that any money for deposit, is paid direct to the Mortgage Lender.

    We did the same for our daughter a few years ago, to get her on the housing ladder.

    A final point are you both in financial stability, to make mortgage payments?

    Best wishes
  • SergeAndJanetSergeAndJanet Member Posts: 3 Listener
    Thank you again friends for your useful advice.
    This whole situation is confusing and overwhelming, so I'm afraid I did just reject the money and it's now gone back.
    It seemed to me that I loose all ways, so I panicked. 
  • mikehughescqmikehughescq Member Posts: 5,916 Disability Gamechanger
    atlas47 said:
    Hi @SergeAndJanet

    A very warm welcome.

    As you have now returned the money, there should be no problems with the DWP.
    As the money has been returned with the sole intent of reclaiming benefit then there is very much an issue in terms of the deprivation of capital rules. A claim which ends because of capital followed fairly rapidly by a reclaim is likely to be a red flag in that respect. Reclaiming benefit doesn’t even need to be the main reason for disposing of the capital. DWP simply needs to show it was a ‘significant operative purpose’ i.e. it was part of the thought process for giving it back. 

    The comment from @Adrian_Scope is spot on in this respect. It’s unfortunately not as simple as giving the money back. I would strongly recommend welfare rights advice at this stage.
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