Benefits/Savings

Hi all,

I'm looking for a little advice (aren't we all?!) - my sister, who is a mother of two, currently lives in a cheap flat for which she receives benefits (she also works part-time when the kids are at school).

She is due to receive some money from my late Grandmother's estate (~10K), and is wondering (since it's a relatively small amount - certainly not enough to buy a house!) if there is any way that she can put it in the children's names for the future, without it counting against her benefits.

She genuinely does not want to be a benefit cheat, and will declare this money if she has to, but in her situation it may be the only opportunity she has to provide for her children's future - she is looking for a legal loophole (I have explained to her that there may not be one, and she understands she will most likely have to declare it). I thought that she could perhaps put the money in Premium Bonds under the kids names/my name or put it in a trust under my name.

Clearly, you'll all have mixed views on this - no need for flaming, I understand what I'm asking and there will be NO problem declaring the money if no such loophole exists.

Many thanks in advance... DSt.

If all the beneficiaries agree, they can rewrite the Grandmother's will to say whatever they want it to say. The Grandmother could leave the £10k to the children by a Deed of Variation. Other relatives may stand to gain from such an arrangement, but you'll need a solicitor to advise you.

Whether cash in the children's hands will have any bearing on her benefits depends on the benefits. For certain classes of Working Tax Credit (for example) you can have as much savings as you like, and as many adults in your house earning, but when interest tips above £300 that is what triggers a reduction.

Troy, thanks for the reply, I missed out some details in the first post. The money has been in some kind of trust for a couple of years already, there is no way of changing the will...

As far as I know she gets housing benefit. She tells me she can have £1300 in savings, before it affects her benfits.I don't have exact details though...

Thanks for taking the time to reply.

DSt.

Likely it will be a discretionary or an accumulation & maintenance trust. Here's an overview of different trusts and strategies

Hopefully that will give you a better idea of what can and can't be achieved.

You might want to post on the uk.gov.social-security newsgroup.

Daytona

She can have 6,000 without affecting housing benefit, council tax benefit or IS. Capital above this is counted as 1 per wk income for every 250. Capital doesn't affect child tax credit or working tax credit (but income from capital can).