What if my relative inherits a lump sum?

You may be worried about your relative’s ability to handle a lump sum of money. You might wonder whether:

• They would spend the money quickly rather than making it last,
• They would not spend it wisely,
• They would give the money away or be too vulnerable to look after the money,
• It would affect their benefits, or
• It would make them have to pay for social care or a care home.

Benefits

Your relative might be claiming benefits because of a low income. These are called ‘means-tested benefits’, and they include:

• Income-Related Employment and Support Allowance
• Income-Based Jobseeker’s Allowance
• Universal Credit
• Income Support
• Council Tax Support
• Housing Benefit

These benefits are affected by any income, savings or other assets that your relative receives. If they have over:

• £6,000 in savings, their benefits will be affected, and
• £16,000 will mean that they can't get means-tested benefits.

An inheritance paid as a lump sum would become part of your relative’s savings. This means a lump sum might lead their benefits to be reduced. 

Other benefits are not affected by income, savings or other assets under the current benefits rules. These are called ‘non means-tested’. They include:

• Disability Living Allowance (DLA)
• Personal Independence Payment (PIP)
• Contribution-Based Employment and Support Allowance (CB ESA)

CB ESA only lasts for 12 months if you are in the work related activity group. There is no time limit if you are in the support group.

If you want further advice on welfare benefits you can contact Citizens Advice. If you want face-to-face advice their website will tell you your local office. Or you can call them and ask:

Citizens Advice

Give free, independent, about your rights and responsibilities.

Telephone: 03444 77 20 20

Website: www.citzensadvice.org.uk

Care homes and social care services

Having savings could mean that your relative would have to pay costs if they live in a care home or get social care services. If you want more advice on this you can contact your local council.