Q&As

If a recipient of Employment and Support Allowance inherits a large sum of money and uses it buy property, will their allowance be withdrawn?

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Published on LexisPSL on 11/12/2015

The following Local Government Q&A provides comprehensive and up to date legal information covering:

  • If a recipient of Employment and Support Allowance inherits a large sum of money and uses it buy property, will their allowance be withdrawn?
  • Purchase of a property

If a recipient of Employment and Support Allowance inherits a large sum of money and uses it buy property, will their allowance be withdrawn?

The Employment and Support Allowance (ESA) is a means tested benefit. The amount of ESA a person receives will depend on an assessment of their income and capital. A person whose capital exceeds £16,000 will not be entitled to any income-related ESA.

Our Practice Note: Benefits and means testing states that assets will be treated as capital for the purpose of means-testing assessments. Any inheritance (ie money) a person receives will therefore count towards their allowable capital.

If a person spends their inheritance on purchasing an asset, this may be treated as deprivation of capital. This is where a person deliberately deprives themselves of capital for the purpose of securing entitlement to a benefit or increasing the amount of that allowance. In those circumstances, regulation 115 of the Employment and Support Allowance Regulations 2008, SI 2008/794 (ESA Regs) provides that the claimant will be treated as possessing the capital when calculating their

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