What Happens if You Inherit Money While on Benefits in the UK

1. What Happens if You Inherit Money While on Benefits in the UK? If you’re wondering, “will inheritance affect my benefits in the UK?” the answer is it might, but it depends on the amount and the type of benefit you’re claiming. Receiving an inheritance while on benefits can affect the benefits because most of them are means-tested. That means once the income or savings exceed the threshold, the benefits might get reduced or cease. Means-tested benefits that can be affected by inheritance and savings include: · Universal Credit · Employment and Support Allowance · Income Support · Housing Benefits · Council Tax Support · Pension Credit · Working Tax Credit · Child Tax Credit You need to let the Department for Work and Pensions (DWP) know if your savings increase and when you receive an inheritance. If you don’t, you might be fined and face a possible prison sentence. You can also lose the right to receive benefits for up to 3 years and be asked to repay overpaid benefits. What Are Savings Limits? The way that your benefits could be affected by inheritance is if said inheritance means you exceed the savings limit to claim them. When a benefit is means-tested, it has a lower capital limit of £6000 and an upper limit of £16,000. This limit is subsequently known as the Savings Credit threshold.

2. · Universal Credit: If you or your partner has managed to save £16,000 or more, then you will be unable to claim for universal credit. · Housing Benefit: If you’re over the state pension age, then the £6000 limit doesn’t apply unless you live with someone and claim housing benefits with them, and they are under the State Pension age. If you get housing benefits then you can save up to £16,000 before your benefits are affected. · Tax Credits: Your tax credits are not going to be affected by different savings limits. · Pension Credits: The only time your capital is going to have an effect on your Pension Credit is if you have over £10,000 in assets.

3. So, does inheritance have any kind of effect on the benefits you can claim within the UK? In short: yes. When you are claiming benefits in the UK and receive some kind of inheritance, the rule of thumb tends to be that if you receive enough inheritance that pushes you over the £16,000 savings limit, you are going to be unable to claim benefits or the benefits you claim could be reduced. There are, of course some exceptions to this rule.