inheritance and ESA

[mick.p.]

Hello.

I got dismissed from my job, due to my disability, in Aug 2012. After 36 years unbroken service, but that is a whole other story.

I had my ATOS medical, that's yet another story, and I am now on WRAG ESA.

In their wisdom they have placed me on both IB and CB. I don't understand why, there must be some kind of benefit (to them I imagine), if someone can tell me the answer to this I would be grateful.

 

But my real question is this,

it is looking as though I may be receiving some inheritance in the next few months. I don'y know how much this will be, but I think it will be between 50 and 100 thousand pounds. When I look at what I have just written it seems like one hell of a lot of money.

I know this will effect my ESA and I understand that, what I was wondering is, are there some things that I am allowed to spend some of that money on. For example, can I pay my mortgage or any loans off without the DWP penalizing me? What about a car, my present car was quite second hand when I bought it. If I replaced it with a better one, would that be OK, or would I be penalized, somehow for that? What if the car I bought was a new one, what would be an acceptable amount to spend?

How about a holiday? would that be OK?

 

Looking back through all of this, it looks as though I am being very greedy. Wanting to spend all of the money so the DWP can't get there hands on it. I am sorry if I give that impression, what I really want to know is, I will never have this much money in my bank account again, so I would like to get some enjoyment out of it. But if my benefits will be stopped, because I have "savings", and I have spent the money on various things, i'll be stuffed. So I would rather know now if I am not allowed to spend any of it, and invest it all to provide some kind of income, before I do something I will regret in the future.

 

I will appreciate any advice on this, things that I want to hear and things I don't'. Don't pull any punches, tell me what you think.

 

many thanks, Mick.

[Nystagmite]

Your CB ESA won't be stopped due to your savings.

 

With mortgages, you can pay the minimum repayments; but you wouldn't be able to pay the whole thing off. Well, you can; but you'll still be treated as having the money.

[antone]

Well yes, that's a lot of questions So, let's see what we can do:

 

Cont and income related: you've been awarded both because you qualify for both, it's not a plot by the DWP. In other words, you have paid enough into the system while working to get ESA© and your household income/savings are low enough that you qualify for ESA(IR) as well. If the amounts for each benefit are the same, ESA© takes precedence, but you still have what's called an "underlying entitlement" to ESA(IR).

 

This is important because ESA© can last for a maximum of 365 days for those who are in the WRAG. Now, as Nystagmite mentioned, your ESA© will not be affected at all by your inheritance, but should your condition keep you out of work beyond those 365 days (the count starts from the first day of your claim, not the date you were placed in the WRAG) then you would transfer to ESA(IR) where your capital would be important.

 

If you spend some of the money, the issue at hand would be "deprivation of capital". What this means is that if the DWP thought you had intentionally and unnecessarily spent money with the intent to secure entitlement to benefit, you would be treated as if you still had that money when your benefit is calculated. The law does not formally define what's "necessary", each case is considered on its merits by a DWP Decision Maker (DM).

 

In the examples you gave, all we can do is try to guess at what a DM might think - we can't say for sure. Nystagmite also mentioned paying off your mortgage - as she said, it would probably not be seen as reasonable to pay off the whole thing, but you could use the money to make the scheduled repayments as they fall due. Same applies to any other loans etc.

 

A car? Well, if your car is falling to bits then I imagine most DMs would be OK with you getting another one that's appropriate to your needs, but probably not with you getting a Ferrari. In the case of a holiday, I've heard of DMs accepting this within reason, but I wouldn't like to swear one way or another.

 

Savings above £16,000 disqualify you from means tested benefits such as ESA(IR) altogether. Savings below £6000 are ignored. For an amount in between, £1 income per week is assumed for each £250 (or part thereof) of savings between £6000.01 and £15,999.99. That assumed income is deducted from your weekly benefit amount. And I repeat, ESA© is not affected by savings.

[abc123def]

A friend got £46,000 from a house sale following a divorce and went on holiday to the US and bought herself a Landrover, the DWP and LA knew and said that was fine. Her money lasted about a year and she was back on full benefits. However it is discretionary, so what one decision maker may say, another may not. She checked out her intentions with them before she spent the money.

[mick.p.]

That's brilliant, thanks for that.

 

These are obviously not the circumstances that I would choose to have some money given to me, I would much rather my relative could live longer. It looks as though all this money will do is give me even more things to think about.

If I just simply pay my loans off, it will effect my benefits just like I still had the money. If I put the money in an account and arrange a direct debit so the loan is paid monthly from the account, I will actually have savings, so my benefits will be reduced exactly the same. So maybe I'll pay the loan off, receive reduced benefits but not pay interest on the remaining period of the loan so, in the long term, it won't cost me as much.

As i am on IB and CB now, does that mean I can have savings now but when my CB stops and I am only on IB, any savings will reduce my ESA. If so and I pay the loan off now while I am on CB, in OCT when my when I go onto just IB will the DWP look back through my financial records, see that I have spent loads of money and treat it as though the money was actually still there.

 

I always thought having a lot of money (Paul McCartney type money) would bring problems with it.

In the grand scheme of things. I am not talking about that much, but it seems to be bringing problems/worries with it.

 

Thanks for your help, Mick.