Inheritance and keeping below £6000 limit

RGBArgee
RGBArgee Online Community Member Posts: 4 Listener
in Employment and Support Allowance (ESA)

My son is likely to be receiving an inheritance later this year from his late Gran.

We understand he can repay a private Mortgage (trust document legally approved ) but we also understand that 'reasonable' purchases can also reduce his capital. Rather than ask DWP directly I wonder if anyone here can point us in the right direction as we do not want to do anything illegal!

He suffers from Social anxiety and depression and we wondered if buying a small care could be classed as reasonable expenditure without being picked up as deprivation of capital. He currently receives EESA Income related and lower rate PIP. Any advice would be helpful. Thank you.

Comments

  • RGBArgee
    RGBArgee Online Community Member Posts: 4 Listener

    Car not Care!!!

  • OverlyAnxious
    OverlyAnxious Online Community Member Posts: 4,619 Championing

    Hi,

    Any purchase that is made for the purpose of reducing capital is classed as deprivation. It is not about the item or the value, it is about the intent.

    If he needs a car, and would have bought one anyway, then that should be fine - although he may still be asked to explain it if reviewed in future.

    The upper limit for savings on IR ESA is £16,000. ESA do need to be informed of anything between £6,000-£16,000 as soon as it enters his bank account. They will then make a deduction of £1 per week for every £250 over £6000. If the total is still below £6000 including the inheritance then there is no need to inform them.

    PIP is not means tested so savings don't affect that and they don't need to be informed.

  • RGBArgee
    RGBArgee Online Community Member Posts: 4 Listener
    https://forum.scope.org.uk/discussion/comment/1027509#Comment_1027509

    Thanks - he has a very old unreliable car and receives PIP but only at the lower rate. The question really is if he spends £20k of his inheritance to buy a new(ish) small reliable car does he need to tell anyone at DWP. It would certainly help him and me to know that he is not going to breakdown/incur bills for a few years. I'm probably over anxious but I don't like asking a question of DWP when the answer might be unpredictable.

  • OverlyAnxious
    OverlyAnxious Online Community Member Posts: 4,619 Championing
    https://forum.scope.org.uk/discussion/comment/1027600#Comment_1027600

    Hi,

    If the inheritance is £20k, that will stop his income related ESA anyway.

    ESA would have to be notified immediately when the inheritance enters his account if it takes his total over £6k. Sadly there is no legal way around that.

    Once his savings drop below £16k again, then he can apply for Universal Credit. (New claims for IR ESA are no longer possible). However, UC will ask for past bank statements in a case like this, and in my opinion, spending £20k on a car just before applying for UC would most likely be seen as deprivation of capital.

    The DWP won't be able to offer advice on this even if you do ask. There are no hard rules for most of DOC. It has to go to a decision maker to decide whether it was DOC or not after it has been spent.

    None of this matters for PIP, because PIP is not means tested, so that will continue regardless of savings & inheritance.

  • RGBArgee
    RGBArgee Online Community Member Posts: 4 Listener

    Thanks. He does need a new car but I do not want to do anything that could come back and create issues. Also it is not great to come off EESA and then only get UC . Given his mental health I am trying to take as much boo the burden as I can as he has allowed DWP to lease with me on his behalf.

    Talking to a Car dealer many on high level PIP have cars - it seems a reasonable argument to suggest buying a car is to help him get out and about given his social anxiety and depression etc. I suppose I really need permission from DWP before doing anything or do we do it, tell them and hope for the best?.

  • OverlyAnxious
    OverlyAnxious Online Community Member Posts: 4,619 Championing
    https://forum.scope.org.uk/discussion/comment/1027617#Comment_1027617

    DWP won't give you permission unfortunately. You have to spend the money first. Only then will they decide whether it was deprivation or not.

    People with Enhanced Mobility awards can access the Motability scheme for a brand new car lease. There are currently over 750,000 of those! So the DWP will be aware of how much impact a car can have on a persons daily life. Though they may still decide that it was bought partly with the intent to reduce the savings in this case. Ultimately there's no way of knowing what they'll decide. You can appeal the decision with a Mandatory Reconsideration if they do consider it to be DOC.

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