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Possible move from IR-ESA to UC after inheriting?

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4 years 11 months ago #248181 by King_Drax_I
So my daughter has been 'lucky' in that she has inherited a biggish lump sum from a long-lost auntie. The stuff of dreams, eh ;)

Of course, this sudden increase in capital has meant that her income-related ESA has been stopped, although the claim is still active and she will still receive her National Insurance stamp.

I was told today by one of the DWP operators that in the unlikely event of her reducing the capital to below the threshold within 12 weeks (it's more likely to take a couple of years), her claim would be reconsidered - so far, so good.

But, if it was after that time, he said that as things stand at the moment she would be 'signposted' to apply for Universal Credit instead. Again, fair enough.

Now, to my question: if she were 'signposted' to Universal Credit in say two years' time, would her spending of that inheritance have to be accounted for? So, another way of looking at it is this: Is UC means-tested, and do we still have to be careful how we spend the money in case the DWP could see her spending as deprivation of capital? Obviously we are being completely transparent with the DWP, but if there is now no restriction on what she spends it on, then the freedom would be good to know about. I hope this makes sense!

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4 years 11 months ago #248187 by Gordon
Drax

If your daughter has savings and/or assets in excess of £16,000 then she is no longer eligible for Income Related ESA and her claim will have been closed. NI Credits are paid via the National Insurance Regulations not ESA.

When her savings/assets reduce to less than £16,000 she can make a new claim for Universal Credit. It will be on file that her ESA claim was closed due to her exceeding the limit and there may be questions on how she has disposed of the money, of course, they there may not.

There are no clear rules on how she spend the money as it usually at the discretion of a Decision Maker whether it has been reasonable or not but in general terms, replacing essential items such as kitchen appliances etc. will be OK, purchasing a car maybe but paying off a mortgage that is not due is unlikely to be.

One of the calculations the DWP may use is to look at how much her ESA was and use this as the basis for what they would expect her weekly expenditure to be.

Gordon

Nothing on this board constitutes legal advice - always consult a professional about specific problems
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