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Forum Home  →  Discussion  →  Work capability issues and ESA  →  Thread

Disclaiming an inheritance - effect on means-tested benefits

Mairi
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Welfare rights officer - Dunedin Canmore Housing Association

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I’ve come into contact with a claimant who is likely to inherit a substantial sum from his late mother’s estate.  He’s been in receipt of means-tested benefits for a number of years and I’m working on the basis that he’ll inherit more than £16000.

He says that he intends not to accept any inheritance because he doesn’t believe in taking money from people who have died.

While I’m aware that he can disclaim any inheritance from a legal point of view I’m concerned that this might be considered to be deprivation of capital for benefit purposes and I can’t find anything definitive to be able to advise him that he can’t disclaim even if he wants to.  (I found something that said he couldn’t disclaim if on means-tested benefits but on further reading that turned out to refer to the USA!)

Does anyone have any thoughts?

Thanks.

Mairi

Surrey Adviser
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Benefits and debt adviser - Esher CAB, Surrey

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I haven’t had any experience of this but I would not be surprised if DWP regarded it as deprivation.  Unless there is some specific provision excluding it, it would seem to me to be an open and shut case.  The money has been left to him and he doesn’t HAVE to disclaim it.

Incidentally, his reasons appear a little unreal to me.  What does he think should be done with money left by deceased persons?  What will actually be done with this money if he does disclaim it?  Is he happy for it to go to someone who does not share his beliefs?

Jon (CANY)
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Welfare benefits - Craven CAB, North Yorkshire

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Couple of previous threads:
http://www.rightsnet.org.uk/forums/viewthread/5897/
http://www.rightsnet.org.uk/forums/viewthread/4241/

However, those are about giving away an inheritance, rather than disclaiming it. One difference in the case of disclaiming could be: does your client even have a reportable change of circs? If he never obtains any actual capital, and if he believes that nothing has happened to affect his entitlement, why should the DWP be made aware of it? Though personally, I think I’d advise him to let them know, and let them come to an informed decision.

As Derek says, I’d be wanting to know more about his reasons for disclaiming. Can he show that it was a pre-existing sincerely held belief?

NeverSayNo
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In deprivation of capital cases the DWP/PS/LA surely must look at the intention behind getting rid of the capital? In that case his principle that he does not believe in taking money from the dead needs to be considered. It may be considered by some to be an unusual belief (or not - I know of people who dont support the concept of inheritance - possibly the only thing me and Simon Cowell have in common) but if he is judged to hold such a belief then he did not get rid of capital in order to claim or increase benefit entitlement - and so the deprivation rules wont apply.

Gareth Morgan
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This is actually a fine point.  The deprivation rules don’t depend upon the acquisition or increase of benefits as the sole reason for the action, or inaction.  It has to be a significant operative purpose; that is one which affects the decision.

If he is aware that the acceptance of the inheritance would remove benefits that he’s currently receiving then, it seems to me, that he must be aware that rejecting it will give him entitlement.  If he was in a situation where rejecting the money would also stop his benefits, what would he then do?  If that would persuade him to take the money then does that change things about his ‘purpose’?

As for not telling the DWP because he would never have the money in his hands, there are a lot of notional income and capital rules (around pensions savings for example) that seem to make that a non-runner.

ikbikb
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Whether it is a material fact that should be declared if it does not occur is a relevant point. The Dept will take the view that it is for them to decide if it is a material CoC or not and a right to MR would exist if you disagree with any subsequent decision. If it could be Material CoC they will say it should be declared and their instructions state this unambiguously. If it is not declared and it turns out to be a material CoC then the claimant opens themselves up to at least a large overpayment or possibly worse such as Interviews, investigation, benefit suspension and drawn out appeals trying to explain things. If someone turns down a large amount of capital they could have been the beneficial owner of for whatever reason that arguably could be a material CoC because the potential material fact is refusing the capital not the receipt of it..

stevenmcavoy
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Gareth Morgan - 03 September 2015 05:24 PM

If he is aware that the acceptance of the inheritance would remove benefits that he’s currently receiving then, it seems to me, that he must be aware that rejecting it will give him entitlement.  If he was in a situation where rejecting the money would also stop his benefits, what would he then do?  If that would persuade him to take the money then does that change things about his ‘purpose’?
.

maybe but then he would only be keeping the money due to the impact giving it away would have which is different from it being a significant operative purpose in the first place which is arguable different..i hope that makes sense.

i had a colleague have a case like this when i worked with the a local authority.  slightly different in that the claimant didnt want the money due to significant historical issues with the family member that had died.

Mairi
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Thanks all for the responses.  Some great thoughts, largely along the lines of what my thinking was.

I saw something in a previous thread about a similar issue which said something along the lines of ‘of course this wouldn’t be an issue if the claimant had disclaimed the inheritance’.  The difference in that case was that the claimant had accepted and then given away the inheritance.  So I was being hopeful that there was a way around it because I too have concerns about convincing the DWP that the claimant’s belief that money shouldn’t be inherited from the deceased is genuinely held.

However we don’t yet know the terms of any will or the value of the estate (all based on guesswork so far), so here’s hoping that the claimant’s share will be under £16000 or that he’s not been included at all.

Mairi

nevip
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Derek - 03 September 2015 03:27 PM

I haven’t had any experience of this but I would not be surprised if DWP regarded it as deprivation.  Unless there is some specific provision excluding it, it would seem to me to be an open and shut case.  The money has been left to him and he doesn’t HAVE to disclaim it.

Incidentally, his reasons appear a little unreal to me.  What does he think should be done with money left by deceased persons?  What will actually be done with this money if he does disclaim it?  Is he happy for it to go to someone who does not share his beliefs?

If there are no other beneficiaries then it will, all things being equal, go to the crown