Inheritance, UC, PIP and bank account

Hi,

Unfortunately when a UC claim gets closed by excess capital it cannot currently be reopened. You would have to start the whole UC process again, and go through another WCA. You will also get the lower rate of LCWRA, and no Transitional Protection. Only when a claim is closed due to earnings from work can it be reopened within 6 months.

There is a potential loophole with this, though I'm still yet to see anyone complete this in real life. You can apply for New Style ESA online right now. You won't get any payments, but should get the NI credits to keep those going towards your state pension while you don't have UC. This should also mean that your LCWRA status is kept when reapplying for UC, meaning that you would not have to go through another WCA if this works as expected.

PIP payments count as income for the first period in which they are paid. They are should not technically be included in your overall capital until the end of the following period. Any PIP that is not used within those two AP's becomes capital and is included in the savings declaration. (So for example, you can't save PIP in a separate account, that would still count towards your capital).

How have you been made aware of this inheritance? If you have a letter from a solicitor or similar that should be proof if the transfer does get flagged.

Hi,

As I say, unfortunately a claim closed by excess capital cannot be reopened. The 6 months only applies to claims closed by excess earnings. I do not agree with it, and am still hoping they'll make it apply to both situations equally in future, but that is the way it works right now.

You can apply for a new UC claim as soon as the savings drop, but cannot reopen the old claim.

If you want to use the New Style ESA workaround to keep your LCWRA status, you must open the ESA claim before losing the UC claim. It will not work if you apply for ESA after losing UC.

If you can spend all of the money during one AP then that is the ideal scenario and means you 'shouldn't' lose the claim. However, it is possible that your bank flag the account to the DWP which could cause some hassle. There is a very high chance that you'll be expected to prove where the money has been spent at some point, so keep as much evidence of that as possible.

Don't inform UC when the money hits your bank account. That will close your UC account automatically. Only inform them at the end of the Assessment Period, when you (hopefully) have less than £16k left.

As said, you can apply for New Style ESA online right now. You'll get a letter saying you might need an assessment. Ignore it. Then you'll get another letter saying that they can't give you payments, but that they might give you NI credits. That's the important part. Those NI credits would continue if your UC account was closed, and that should keep your LCWRA status active as well (although it's called Support Group for ESA). I have done this process myself, as my situation means I've been close to £16k a few times, but haven't gone over so far to confirm whether it definitely works.

It is actually possible, and fairly common, for people to claim both UC and NS ESA at the same time. But if you haven't worked in the last 2 years, and you aren't migrating from legacy ESA, then it won't be possible for you to get the payments in this case. It's just the NI credits that are the important part.

Ok. That isn't what I'd advise, but you should make your own choice based on everything you've seen so far. I can't comment on advice from elsewhere without knowing exactly where it's come from.

Part of the problem here is that the system isn't designed for technicalities. If you declare £16k online, the claim could be closed immediately by the computer system. If that happens, you will lose access to the account and will not be able to declare the lower amount later in the day.

If you are going to declare more than £16k, then I would definitely want to set up NS ESA first, as a backup in case the UC account does get closed.

Please do keep us updated with what happens as I will change my advice in future if I am wrong. 🙂