The mum receives Universal Credit and is worried her claim will be closed
Woman on phone(Image: Getty Images)
A mum has questioned whether her benefits will stop if she uses £80,000 inheritance to buy a house.
She told how she receives Universal Credit from the Department for Work and Pensions (DWP) and is a full-time carer for her disabled daughter.
The mum said she wants to use the inheritance to buy a house under the shared ownership scheme but said this would ‘wipe out all most of the money once moving costs and legal fees are paid’.
If her benefits are stopped, she ‘won’t be able to afford to buy the house after a couple of months’.
The claimant took to Reddit and asked whether a ‘grace period’ could be put in place which meant she would be able to receive the inheritance, taking her over the £16,000 threshold, without closing her claim.
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On Reddit, they said: “My mum died a couple of years ago and has left me some money (around 80k) in her will.
“It has taken quite a while to go through probate and will probably be granted next month.
“I am on UC because my daughter has a brain injury and I am her full time carer so unfortunately I am unable to work.
“I know that having any savings over £16k automatically means that UC isn’t applicable anymore, but I am wondering what the rules are around purchasing property as I intend on buying a house under the shared ownership scheme which will wipe out all most of the money once moving costs and legal fees are paid.
“I have seen that money from a property sale that is intended to be used to buy another gets a six month grace period, but I can not see anywhere if that also stands if money is gifted or inherited so I am really worried that if it is a case of my claim closing due to the capital, then I won’t be able to afford to buy the house after a couple of months, which is a bit of a nightmare.
“We are currently in a private rental if that makes any difference.
“If anyone could please offer any advice on how to get around this I would really appreciate it.
“We have had a really rubbish time these past few years. I’m a totally lone parent since my daughters dad passed away around a year before my mum passed, and we have been bounced between private rentals for various reasons like the landlord selling while another gave us a section 21 after complaining about mould.
“I had to give up my job as a teacher because of my daughters disability.
“Things have been crap to say the least and I am desperate for a stable home for us. Thanks in advance.”
Fellow Reddit users responded to the query.
One said: “The six month disregard you’re referring to wouldn’t apply in this situation.
“You’ll need to report the change in capital once you receive it and your UC will end (along with any council tax reduction from your local council, if you claim that).
“When you’ve purchased a home then you can reclaim UC and CTR from the council again.”
A second said: “You can buy a house but whilst you haven’t yet the money won’t be disregarded as capital and you need to close your UC and reopen it when under £16k.”
A third commented: “I’m afraid that money gifted or inherited in a generic sense can’t be disregarded, even when you subsequently intend to use it to purchase a house.
“So on the basis, now that the inheritance is available you’re over the £16k limit and your UC entitlement would, if so, end until your capital reduces again.”
You must tell the DWP about any changes in you circumstances, including inheritance payments.
The DWP takes into account ‘all money, savings and investments you have in the UK and abroad’ when you claim Universal Credit.
It is likely your benefits will be stopped if you have more than £16,000.
Charity Shelter says: “You cannot get UC anymore if you inherit more than £16,000.
“If you inherit between £6,000 and £16,000, you can still get UC but it will usually go down.
“Savings or capital between these amounts affect how your Universal Credit is worked out.
“Be careful how you spend inherited money.
“The DWP could decide you have spent it deliberately to keep getting UC. This would affect your claim.
“You can use money you inherit to reduce your debts or for other reasonable spending without it affecting your claim.”
You can buy a property through the shared ownership scheme if you ‘cannot afford all of the deposit and mortgage payments for a home that meets your needs’, Gov.uk says.
You buy a share of the property – between 10 per cent and 75 per cent of the full market value – and pay rent to a landlord on the rest.
Usually, you pay monthly ground rent and service charges, for example towards the maintenance of communal areas
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