ESA & Inheritance for a new home — Scope | Disability forum
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ESA & Inheritance for a new home

Hi guys

I've just joined the forum and must say it's a relief to find a good online resource that helps everyone's worries in difficult times.

A friend recently told me that receiving an inheritance doesn't mean your ESA Income Related will stop If you are going to use the inheritance to purchase a new home AND after the purchase your remaining savings still fall below the £16,000 threshold. The conditions supposedly are that you inform the DWP of the above and they will keep paying your ESA for 6 months provided you send them continuous proof of the buying/selling process. If after 6 months you have not managed to buy/sell they will at their DISCRETION keep paying ESA for a further 6 months provided you still supply regular proof that you are still engaged in the buying/selling process (these things can take time). Can anyone please confirm if this is true? Many thanks in advance. 

Comments

  • calcotti
    calcotti Member Posts: 6,379 Disability Gamechanger
    Not correct unfortunately. There is a disregard for money intended for the purchase of the home in certain circumstance, such as if the proceeds are from the sale of a former home, but inheritance is not one of them.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • Mikka
    Mikka Member Posts: 12 Listener
    edited June 2021
    Oh I see. Thanks for the reply. The source of the advice was the local CAB. Weird that they would give out such incorrect advice. The reason for the purchase of a new home was a more disability friendly environment and to move nearer to my son for general support. Are you still saying CAB advice is wrong?

    Edit: I would be selling current home and using inheritance to upgrade to a more suitable home. Didn't make that clear. Does this change things? 
  • calcotti
    calcotti Member Posts: 6,379 Disability Gamechanger
    Proceeds from sale of your existing home can be disregarded for six months while you are purchasing a new property. Of course this may not be relevant if you go straight from old home to new home as you will never have the proceeds.

    I do not think the inheritance can be disregarded.when you get it, if it takes your capital over £16,000 you will cease to be eligible for means tested benefits. Once your capital drops you can reapply.

    in respect of ESA, if any of it is contribution based that will continue and you can get income based added back at a later date. If the ESA is all income based it will end and when you want to reclaim it will have to be UC.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • Mikka
    Mikka Member Posts: 12 Listener
    Many thanks calcotti for your reply. Yes, technically as soon as I exceed the £16,000 in theory my ESA income based would normally stop. BUT because I am using the inheritance to purchase a new home as well as the proceeds from the sale of my current home they will not stop ESA payments for a period of 6 months plus a further 6 months at their discretion. Having purchased a new home THEN the £16,000 threshold will apply to any savings remaining. That is my understanding. Perhaps I need to speak directly with CAB to clarify this. Hope this helps anyone in a similar position. Regardless, I think it is so unfair to penalise anyone's inheritance but that's just my personal opinion. I think it is heartless and unfair in the general scheme of things. 
  • calcotti
    calcotti Member Posts: 6,379 Disability Gamechanger
    Mikka said:
    Many thanks calcotti for your reply. Yes, technically as soon as I exceed the £16,000 in theory my ESA income based would normally stop. BUT because I am using the inheritance to purchase a new home as well as the proceeds from the sale of my current home they will not stop ESA payments for a period of 6 months plus a further 6 months at their discretion. Having purchased a new home THEN the £16,000 threshold will apply to any savings remaining. That is my understanding. 
    It is not my understanding. The relevant guidance is in this document
    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932378/dmgch52.pdf

    I can find nothing in this document that would allow an inheritance to be disregarded.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • woodbine
    woodbine Member, Community Co-Production Group Posts: 7,760 Disability Gamechanger
    Sadly seeing people being given poor advice only confirms my opinion that CAB are not always the best to seek welfare advice from, I would suggest you contact your local welfare rights and have a chat with them @Mikka
    Be extra nice to new members.

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