Ask the Experts

Will inheritance hit benefits?

Q For almost 20 years, my husband’s severe mental health problems have prevented him from working. He gets Incapacity Benefit, Disability Living Allowance (DLA) and Income Support top up. I get Carer’s Allowance. We get full Housing Benefit. I am about to receive some inheritance money. I am aware that we will have to pay rent and rates, but I have received conflicting advice on how to spend any of the money without causing deliberate deprivation of income. Can you please help us?
Caroline Morgan, by email

Ken Butler of Disability Alliance says: Firstly, there are no capital (savings) limits with respect to non means-tested benefits. This means that irrespective of the size of your inheritance, neither your Carer’s Allowance nor your husband’s Incapacity Benefit or DLA entitlement will be affected.

However, there are capital rules for most means-tested benefits. In addition, if a claimant is living with someone as a couple then their joint capital is considered when assessing entitlement.

There is a lower capital limit and an upper capital limit. You cannot get most means-tested benefits if your capital is above the upper limit of £16,000. If your capital is at or below the lower limit of £6,000, your means-tested benefit is unaffected.

If your capital is between these upper and lower limits, an amount of “tariff income’”is assumed, i.e. your capital is treated as if it were generating income.

Normally, £1 a week for every £250 (or part of £250) above the lower limit is included as your income in this way. Each time capital moves into the next block of £250, an additional £1 is included as income. This tariff income is then added to your other income when calculating your entitlement to the means-tested benefit. This means that any effect on your husband’s Income Support, Housing Benefit and council tax benefit depends on the amount of your inheritance money.

However, the “notional capital” issue is likely to be of most concern to you. If someone is held to have deprived themselves of capital in order to get or retain a means-tested benefit, the capital can be treated by the DWP as if they still had it and classed as “notional” capital.

In some cases, the amount of notional capital along with actual capital will exclude people from a benefit. Or, people may still be entitled to the benefit but, because of their notional capital, the assessment is related to a higher tariff income than their actual capital would warrant.

However, if there are good and sensible reasons for someone spending their capital, and getting, retaining or increasing the means-tested benefit isn’t a significant motive for them spending part of their savings, they should not be affected.

I regret that there is no definitive list of items that can and cannot be bought in relation to this deprivation of capital rule and each case has to be considered individually. A Social Security Commissioner previously ruled on this very issue that: “... while a beneficiary under a will must not spend the money on the basis that if it is kept entitlement to income support will be lost or reduced, all the facts, and the reasons for the various items of expenditure have to be examined to see what, if anything, was spent in circumstances in which the forbidden purpose was a significant operative purpose and what would have been spent anyway on receipt of a windfall by somebody who had previously lived in relatively straightened circumstances. ... What the tribunal needs to look for is expenditure that, on the particular facts of this case, and taking into account the emotional state and budgeting capabilities of the claimant, would probably not have been made by her unless a significant motivation for it was to deprive herself of capital for the purpose of claiming income support or increasing the amount of that benefit.”

If, in the future, capital that you no longer have is taken into account in determining your benefit entitlement, you should appeal and seek support and help from a local advice centre.

How can I insure my scooter in the USA?

Q I want to take my mobility scooter on holiday with me to the USA. I will need public liability insurance in the US, but my UK scooter insurance does not cover this, nor does my travel insurance policy, nor do any UK insurance companies. What should I do?
David Johnson, by email

Andy Wright replies: A colleague in the travel insurance business tells me that travel and mobility scooter insurance policies tend to exclude public liability cover in North America and Canada. This is because claims costs are significantly greater in these territories because medical expenses are higher and the blame culture stronger.

To include that cover would significantly inflate UK premiums. It seems to me that the most practical solution is almost certainly to hire a scooter in the US as your rental agreement will include public liability insurance.

A good disability travel specialist should be able to arrange hire on your behalf: I know that Accessible Travel does so at many US destinations.

Can DWP raid other benefits to balance overpayments

Q The Benefits Agency wants to take money off my DLA higher rate mobility component to pay an overpayment of Income Support. Can it?
David Perry, by email

Ken Butler says: If an over­payment of benefit is held to be recoverable, the DWP can legally seek to do this through deductions from most benefits.

However, no deduction can be made from child benefit, housing benefit, guardian's allowance or council tax benefit to recover an overpayment of a different benefit. In addition, overpaid benefit cannot be recovered by deductions from tax credits.

Many overpayments of benefit can only be recovered if it can be shown that the claimant caused the overpayment by a failure to disclose or by a misrepresentation. It is therefore always worthwhile seeking advice to see if there are grounds for appealing against a decision that an overpayment is recoverable.

The DWP can also agree to vary the level of benefit deductions being made. Again, if the recovery of an overpayment is causing hardship, a debt advisor from a local advice agency may be able to help with making representations that any deductions be lowered.