If someone is on pension credit and unexpectedly finds thier spouse will get 
an inheritance can they have it diverted to a son or daughter to help them 
get on the housing ladder without it jeopardising the pension credit?
I knows its quite legal to have the inheritance paid to them but no idea 
about the pension credit side with there being savings limit rules.
Thanks

dave hall wrote:
> If someone is on pension credit and unexpectedly finds thier spouse will get 
> an inheritance can they have it diverted to a son or daughter to help them 
> get on the housing ladder without it jeopardising the pension credit?
> I knows its quite legal to have the inheritance paid to them but no idea 
> about the pension credit side with there being savings limit rules.
> Thanks
> 

Although not illegal (you can do what you like with your own money) you 
would be depriving yourself of capital to gain extra PC even if it never 
went into your account but you had the solicitor pay it directly to you 
children.

If the DWP discovered this they could still take the capital you gave 
away into account even though you no longer had it which would affect 
and possibly remove entitlement to PC, HB and CTB.  If you hide the fact 
that you had these funds it could be considered fraud which might lead 
to prosecution.

It's difficult to say whether the DWP would discover it however it only 
takes one disgruntled or jealous relative to tell them and you'll be up 
a creek.  When it comes to inheritances you should not assume that 
everyone is happy!

Also if you have an Assessed Income Period the inheritance would not 
affect your PC/HB/CTB until the end of that period.  You could 
reasonably spend the money to benefit YOURSELVES without it being 
considered deprivation during this period and only the balance would 
affect your PC at the end of the AIP.

Mike

Thanks mike.
Presumably if i reached retirement age before any possible inheritance then 
my state pension wouldnt be affected by it anyway, only any pension credit 
element?
In those circumstances it wouldnt matter what we did with any money.
Dave


"Mike"  wrote in message 
news:g6vfqr$jri$1@registered.motzarella.org...
> dave hall wrote:
>> If someone is on pension credit and unexpectedly finds thier spouse will 
>> get an inheritance can they have it diverted to a son or daughter to help 
>> them get on the housing ladder without it jeopardising the pension 
>> credit?
>> I knows its quite legal to have the inheritance paid to them but no idea 
>> about the pension credit side with there being savings limit rules.
>> Thanks
>>
>
> Although not illegal (you can do what you like with your own money) you 
> would be depriving yourself of capital to gain extra PC even if it never 
> went into your account but you had the solicitor pay it directly to you 
> children.
>
> If the DWP discovered this they could still take the capital you gave away 
> into account even though you no longer had it which would affect and 
> possibly remove entitlement to PC, HB and CTB.  If you hide the fact that 
> you had these funds it could be considered fraud which might lead to 
> prosecution.
>
> It's difficult to say whether the DWP would discover it however it only 
> takes one disgruntled or jealous relative to tell them and you'll be up a 
> creek.  When it comes to inheritances you should not assume that everyone 
> is happy!
>
> Also if you have an Assessed Income Period the inheritance would not 
> affect your PC/HB/CTB until the end of that period.  You could reasonably 
> spend the money to benefit YOURSELVES without it being considered 
> deprivation during this period and only the balance would affect your PC 
> at the end of the AIP.
>
> Mike

Dave Hall wrote:
> Thanks mike.
> Presumably if i reached retirement age before any possible inheritance then 
> my state pension wouldnt be affected by it anyway, only any pension credit 
> element?
> In those circumstances it wouldnt matter what we did with any money.
> Dave
> 
> 
> "Mike"  wrote in message 
> news:g6vfqr$jri$1@registered.motzarella.org...
>> dave hall wrote:
>>> If someone is on pension credit and unexpectedly finds thier spouse will 
>>> get an inheritance can they have it diverted to a son or daughter to help 
>>> them get on the housing ladder without it jeopardising the pension 
>>> credit?
>>> I knows its quite legal to have the inheritance paid to them but no idea 
>>> about the pension credit side with there being savings limit rules.
>>> Thanks
>>>
>> Although not illegal (you can do what you like with your own money) you 
>> would be depriving yourself of capital to gain extra PC even if it never 
>> went into your account but you had the solicitor pay it directly to you 
>> children.
>>
>> If the DWP discovered this they could still take the capital you gave away 
>> into account even though you no longer had it which would affect and 
>> possibly remove entitlement to PC, HB and CTB.  If you hide the fact that 
>> you had these funds it could be considered fraud which might lead to 
>> prosecution.
>>
>> It's difficult to say whether the DWP would discover it however it only 
>> takes one disgruntled or jealous relative to tell them and you'll be up a 
>> creek.  When it comes to inheritances you should not assume that everyone 
>> is happy!
>>
>> Also if you have an Assessed Income Period the inheritance would not 
>> affect your PC/HB/CTB until the end of that period.  You could reasonably 
>> spend the money to benefit YOURSELVES without it being considered 
>> deprivation during this period and only the balance would affect your PC 
>> at the end of the AIP.
>>
>> Mike 
> 
> 

That's correct State Pension is unaffected by savings only your PC, HB 
and CTB.

Mike

"Mike"  wrote in message 
news:g6vkub$sfd$1@registered.motzarella.org...
> Dave Hall wrote:
>> Thanks mike.
>> Presumably if i reached retirement age before any possible inheritance 
>> then my state pension wouldnt be affected by it anyway, only any pension 
>> credit element?
>> In those circumstances it wouldnt matter what we did with any money.
>> Dave
>>
>>
>> "Mike"  wrote in message 
>> news:g6vfqr$jri$1@registered.motzarella.org...
>>> dave hall wrote:
>>>> If someone is on pension credit and unexpectedly finds thier spouse 
>>>> will get an inheritance can they have it diverted to a son or daughter 
>>>> to help them get on the housing ladder without it jeopardising the 
>>>> pension credit?
>>>> I knows its quite legal to have the inheritance paid to them but no 
>>>> idea about the pension credit side with there being savings limit 
>>>> rules.
>>>> Thanks
>>>>
>>> Although not illegal (you can do what you like with your own money) you 
>>> would be depriving yourself of capital to gain extra PC even if it never 
>>> went into your account but you had the solicitor pay it directly to you 
>>> children.
>>>
>>> If the DWP discovered this they could still take the capital you gave 
>>> away into account even though you no longer had it which would affect 
>>> and possibly remove entitlement to PC, HB and CTB.  If you hide the fact 
>>> that you had these funds it could be considered fraud which might lead 
>>> to prosecution.
>>>
>>> It's difficult to say whether the DWP would discover it however it only 
>>> takes one disgruntled or jealous relative to tell them and you'll be up 
>>> a creek.  When it comes to inheritances you should not assume that 
>>> everyone is happy!
>>>
>>> Also if you have an Assessed Income Period the inheritance would not 
>>> affect your PC/HB/CTB until the end of that period.  You could 
>>> reasonably spend the money to benefit YOURSELVES without it being 
>>> considered deprivation during this period and only the balance would 
>>> affect your PC at the end of the AIP.
>>>
>>> Mike
>>
>>
>
> That's correct State Pension is unaffected by savings only your PC, HB and 
> CTB.
>
> Mike

It takes a bit of absorbing doesnt it! lol
I reach retirement age in 2010 so even if we suddenly found ourselves with 
an inheritance were only looking at 2 years worst case and it sounds like 
the assessed income period would take care of that.
Not at all sure whether a possible inheritance will come our way anyway as 
no one knows what was written into the one and only will that may come my 
wifes direction.
We shall see.
Thanks for your answers Mike.

Dave Hall wrote:
> "Mike"  wrote in message 
> news:g6vkub$sfd$1@registered.motzarella.org...
>> Dave Hall wrote:
>>> Thanks mike.
>>> Presumably if i reached retirement age before any possible inheritance 
>>> then my state pension wouldnt be affected by it anyway, only any pension 
>>> credit element?
>>> In those circumstances it wouldnt matter what we did with any money.
>>> Dave
>>>
>>>
>>> "Mike"  wrote in message 
>>> news:g6vfqr$jri$1@registered.motzarella.org...
>>>> dave hall wrote:
>>>>> If someone is on pension credit and unexpectedly finds thier spouse 
>>>>> will get an inheritance can they have it diverted to a son or daughter 
>>>>> to help them get on the housing ladder without it jeopardising the 
>>>>> pension credit?
>>>>> I knows its quite legal to have the inheritance paid to them but no 
>>>>> idea about the pension credit side with there being savings limit 
>>>>> rules.
>>>>> Thanks
>>>>>
>>>> Although not illegal (you can do what you like with your own money) you 
>>>> would be depriving yourself of capital to gain extra PC even if it never 
>>>> went into your account but you had the solicitor pay it directly to you 
>>>> children.
>>>>
>>>> If the DWP discovered this they could still take the capital you gave 
>>>> away into account even though you no longer had it which would affect 
>>>> and possibly remove entitlement to PC, HB and CTB.  If you hide the fact 
>>>> that you had these funds it could be considered fraud which might lead 
>>>> to prosecution.
>>>>
>>>> It's difficult to say whether the DWP would discover it however it only 
>>>> takes one disgruntled or jealous relative to tell them and you'll be up 
>>>> a creek.  When it comes to inheritances you should not assume that 
>>>> everyone is happy!
>>>>
>>>> Also if you have an Assessed Income Period the inheritance would not 
>>>> affect your PC/HB/CTB until the end of that period.  You could 
>>>> reasonably spend the money to benefit YOURSELVES without it being 
>>>> considered deprivation during this period and only the balance would 
>>>> affect your PC at the end of the AIP.
>>>>
>>>> Mike
>>>
>> That's correct State Pension is unaffected by savings only your PC, HB and 
>> CTB.
>>
>> Mike
> 
> It takes a bit of absorbing doesnt it! lol
> I reach retirement age in 2010 so even if we suddenly found ourselves with 
> an inheritance were only looking at 2 years worst case and it sounds like 
> the assessed income period would take care of that.
> Not at all sure whether a possible inheritance will come our way anyway as 
> no one knows what was written into the one and only will that may come my 
> wifes direction.
> We shall see.
> Thanks for your answers Mike. 
> 
> 

Have you checked you have an AIP, the main criteria is that one of a 
couple must be over 65 and the other over 60.  Is your wife over 65 if 
not you definitely won't have one.

Mike

"Mike"  wrote in message
news:g6vfqr$jri$1@registered.motzarella.org...
> > If someone is on pension credit and unexpectedly finds thier spouse will get
> > an inheritance can they have it diverted to a son or daughter to help them
> > get on the housing ladder without it jeopardising the pension credit?
> > I knows its quite legal to have the inheritance paid to them but no idea
> > about the pension credit side with there being savings limit rules.
> > Thanks
> >
>
> Although not illegal (you can do what you like with your own money) you
> would be depriving yourself of capital to gain extra PC even if it never
> went into your account but you had the solicitor pay it directly to you
> children.

Does this apply even if the will is actually altered to benefit the children,
rather than the OP's spouse just telling the solicitor to pay it to the
children?

AIUI wills can be altered if all beneficiaries agree.

--
Andy

Andy Pandy wrote:
> "Mike"  wrote in message
> news:g6vfqr$jri$1@registered.motzarella.org...
>>> If someone is on pension credit and unexpectedly finds thier spouse will get
>>> an inheritance can they have it diverted to a son or daughter to help them
>>> get on the housing ladder without it jeopardising the pension credit?
>>> I knows its quite legal to have the inheritance paid to them but no idea
>>> about the pension credit side with there being savings limit rules.
>>> Thanks
>>>
>> Although not illegal (you can do what you like with your own money) you
>> would be depriving yourself of capital to gain extra PC even if it never
>> went into your account but you had the solicitor pay it directly to you
>> children.
> 
> Does this apply even if the will is actually altered to benefit the children,
> rather than the OP's spouse just telling the solicitor to pay it to the
> children?
> 
> AIUI wills can be altered if all beneficiaries agree.
> 
> --
> Andy
> 
> 

I doubt that it would but to be honest I've never heard of that.

Mike

I know this might sound a bit "controversial" but why should someone
deny themselves of a large amount of capital in order to continue to
qualify for public funds?

The welfare state is a system where taxpayers contribute to help out
those who need financial assitance.

I happily pay my taxes towards this end. I approve of the fact that I
share my dosh with others who don't have enough to live on.

I don't make any judgements. I don't need to know the reasons why
someone is hard up. Because I support the welfare state I share my
money willingly.

So I find it a bit strange that we are talking about helping to spend
my hard earned cash on someone who actually could get by using their
own resources.

Surely this is missing the point isn't it? If someone is due to get a
large inheritance then that's a good thing innit? They can then look
after themselves can't they. Y'know - with their own money? They don't
actually NEED the cash that I surrender to the Gov for distribution to
benefit claimants.

The money that comes from benefits isn't free money. All taxpayers
have to contribute it. You'll never hear me saying "please can I avoid
paying Tax and NI so I can help my kids get on the housing ladder".

As Mike (I think) pointed out, pensioners in many circs have an
"assessed income period" where sudden increases in capital are ignored
for up to five years. Also people over pension age are "allowed" to
spend money on products and services that will improve their lives and
secure future comfort. And (starting to rant now) the pension credit
system is pretty generous compared to what came before it (Oct 2003).
Pension credit has lifted many pensioners out of poverty for the first
time in generations. Before anyone points it out I realise that there
are still instances of fuel poverty but that's got more to do with
macro economics and world politics - rather than deficiencies in the
welfare state.

Please folks - the welfare state is about sharing and decency and
protecting the basic rights and dignities of our fellow citizens. Its
not about getting what you can and bending the rules to get more - no
disrespect to the original poster. Having said that, this to the
original poster - if you have got a shed load of cash coming why do
you need some of mine?

"Marvin"  wrote in message
news:4cc145d5-8e90-4641-a4e3-8d5ce366f01c@j22g2000hsf.googlegroups.com...
> I know this might sound a bit "controversial" but why should someone
> deny themselves of a large amount of capital in order to continue to
> qualify for public funds?

Why should the poor be effectively "taxed" on inheritances, or savings (through
capital based benefit reduction)?

> The welfare state is a system where taxpayers contribute to help out
> those who need financial assitance.

But not those who don't. Which creates poverty traps, high marginal effective
tax rates on the poor, provides huge disincentives to save and huge incentives
to become dependant on the welfare state. It rewards wastefulness, it punishes
prudence.

> I happily pay my taxes towards this end. I approve of the fact that I
> share my dosh with others who don't have enough to live on.
>
> I don't make any judgements. I don't need to know the reasons why
> someone is hard up. Because I support the welfare state I share my
> money willingly.

So, if Bill and Ben earn the same money throughout their lives, but Bill pisses
every penny up against the wall while Ben saves hard and builds up a decent
amount of capital and private pension provision, it is perfectly fair and
equitable for Ben's taxes to subsidise pension credit, housing benefit and
council tax benefit payable to the likes of Bill, but for Ben to be punished for
saving by being denied those same benefits?

Or the 90 year old widow who gets beaten up by a thug, and evetually gets
compensation, only to find that it all gets taken away by the state in reduced
benefits.

You might think these things are perfectly right and fair. I don't. I think they
stink.

> So I find it a bit strange that we are talking about helping to spend
> my hard earned cash on someone who actually could get by using their
> own resources.
>
> Surely this is missing the point isn't it? If someone is due to get a
> large inheritance then that's a good thing innit? They can then look
> after themselves can't they. Y'know - with their own money? They don't
> actually NEED the cash that I surrender to the Gov for distribution to
> benefit claimants.

They might not need their state pension. They might not need the taxpayer to pay
for their NHS treatment. They might not need free libraries. Maybe they should
pay twice for everything.

> The money that comes from benefits isn't free money. All taxpayers
> have to contribute it.

So they should *all* benefit from it. Not just those who are lazy, wasteful or
even genuinely needy.

I have no objection to my taxes paying for the state pension, for child benefit,
for non means tested disability allowances, for the NHS, for public parks and
libraries. Because when I'm old, when I have children, if I become disabled, if
I get ill, if I fancy a trip to the public park/library, I will benefit from
them.

I object strongly to my taxes paying for any benefit for others, which I am then
denied because I saved.

> You'll never hear me saying "please can I avoid
> paying Tax and NI so I can help my kids get on the housing ladder".
>
> As Mike (I think) pointed out, pensioners in many circs have an
> "assessed income period" where sudden increases in capital are ignored
> for up to five years. Also people over pension age are "allowed" to
> spend money on products and services that will improve their lives and
> secure future comfort. And (starting to rant now) the pension credit
> system is pretty generous compared to what came before it (Oct 2003).
> Pension credit has lifted many pensioners out of poverty for the first
> time in generations. Before anyone points it out I realise that there
> are still instances of fuel poverty but that's got more to do with
> macro economics and world politics - rather than deficiencies in the
> welfare state.
>
> Please folks - the welfare state is about sharing and decency and
> protecting the basic rights and dignities of our fellow citizens. Its
> not about getting what you can and bending the rules to get more - no
> disrespect to the original poster. Having said that, this to the
> original poster - if you have got a shed load of cash coming why do
> you need some of mine?

All means testing is the complete opposite of decency. It encourages all that is
wrong in our society, and discourages all that is right.

The idea that means testing is "necessary" because otherwise benefits would be
unaffordable completely misses the point that taxpayers would benefit, on
average, just as much as they lose. It would redistribute wealth in a much
fairer way than the shambles and injustices of means testing.

--
Andy

On 2 Aug, 21:51, "Andy Pandy" <spam8ti...@wonderful.spam.invalid>
wrote:
> "Marvin"  wrote in message
>
> news:4cc145d5-8e90-4641-a4e3-8d5ce366f01c@j22g2000hsf.googlegroups.com...
>
> > I know this might sound a bit "controversial" but why should someone
> > deny themselves of a large amount of capital in order to continue to
> > qualify for public funds?
>
> Why should the poor be effectively "taxed" on inheritances, or savings (through
> capital based benefit reduction)?
>
> > The welfare state is a system where taxpayers contribute to help out
> > those who need financial assitance.
>
> But not those who don't. Which creates poverty traps, high marginal effective
> tax rates on the poor, provides huge disincentives to save and huge incentives
> to become dependant on the welfare state. It rewards wastefulness, it punishes
> prudence.
>
> > I happily pay my taxes towards this end. I approve of the fact that I
> > share my dosh with others who don't have enough to live on.
>
> > I don't make any judgements. I don't need to know the reasons why
> > someone is hard up. Because I support the welfare state I share my
> > money willingly.
>
> So, if Bill and Ben earn the same money throughout their lives, but Bill pisses
> every penny up against the wall while Ben saves hard and builds up a decent
> amount of capital and private pension provision, it is perfectly fair and
> equitable for Ben's taxes to subsidise pension credit, housing benefit and
> council tax benefit payable to the likes of Bill, but for Ben to be punished for
> saving by being denied those same benefits?
>
> Or the 90 year old widow who gets beaten up by a thug, and evetually gets
> compensation, only to find that it all gets taken away by the state in reduced
> benefits.
>
> You might think these things are perfectly right and fair. I don't. I think they
> stink.
>
> > So I find it a bit strange that we are talking about helping to spend
> > my hard earned cash on someone who actually could get by using their
> > own resources.
>
> > Surely this is missing the point isn't it? If someone is due to get a
> > large inheritance then that's a good thing innit? They can then look
> > after themselves can't they. Y'know - with their own money? They don't
> > actually NEED the cash that I surrender to the Gov for distribution to
> > benefit claimants.
>
> They might not need their state pension. They might not need the taxpayer to pay
> for their NHS treatment. They might not need free libraries. Maybe they should
> pay twice for everything.
>
> > The money that comes from benefits isn't free money. All taxpayers
> > have to contribute it.
>
> So they should *all* benefit from it. Not just those who are lazy, wasteful or
> even genuinely needy.
>
> I have no objection to my taxes paying for the state pension, for child benefit,
> for non means tested disability allowances, for the NHS, for public parks and
> libraries. Because when I'm old, when I have children, if I become disabled, if
> I get ill, if I fancy a trip to the public park/library, I will benefit from
> them.
>
> I object strongly to my taxes paying for any benefit for others, which I am then
> denied because I saved.
>
>
>
>
>
> > You'll never hear me saying "please can I avoid
> > paying Tax and NI so I can help my kids get on the housing ladder".
>
> > As Mike (I think) pointed out, pensioners in many circs have an
> > "assessed income period" where sudden increases in capital are ignored
> > for up to five years. Also people over pension age are "allowed" to
> > spend money on products and services that will improve their lives and
> > secure future comfort. And (starting to rant now) the pension credit
> > system is pretty generous compared to what came before it (Oct 2003).
> > Pension credit has lifted many pensioners out of poverty for the first
> > time in generations. Before anyone points it out I realise that there
> > are still instances of fuel poverty but that's got more to do with
> > macro economics and world politics - rather than deficiencies in the
> > welfare state.
>
> > Please folks - the welfare state is about sharing and decency and
> > protecting the basic rights and dignities of our fellow citizens. Its
> > not about getting what you can and bending the rules to get more - no
> > disrespect to the original poster. Having said that, this to the
> > original poster - if you have got a shed load of cash coming why do
> > you need some of mine?
>
> All means testing is the complete opposite of decency. It encourages all that is
> wrong in our society, and discourages all that is right.
>
> The idea that means testing is "necessary" because otherwise benefits would be
> unaffordable completely misses the point that taxpayers would benefit, on
> average, just as much as they lose. It would redistribute wealth in a much
> fairer way than the shambles and injustices of means testing.
>
> --
> Andy- Hide quoted text -
>
> - Show quoted text -

OK I'm with you on some of that. But some of it leaves me a bit
puzzled.

I see your point about child benefit and state pension and disability
benefits. None of them are means tested. Well - I support them too in
principle. (hurrah for me!) But they are about basic levels of
protection built into the fabric of society for the potentially
vulnerable. Also libraries, health provision, and the other million
and one things that make a decent society. I would not like to live in
the USA for example where state provision is minimal despite its great
wealth.

Your point about Bill and Ben:  I used to hear that point a lot more
before the introduction of pension credits in oct 2003. A pensioner
with a private pension and some savings for old age would have it
effectively wiped out due to the Income Support means test. Someone
with no private pension or savings would end up with the same weekly
income as the more prudent one. However, that's what Savings Credit is
all about. Now, a person with a private pension gets savings credit
which gives them a genuinely higher weekly income that the other
pensioner who pissed their life's earnings up the wall. The intention
behind this was to reward/encourage people to make provision for old
age.

I don't really understand your point about giving financial assistance
to those who *don't* need it. Whats the point of that? And how does
that create a poverty trap? If they don't need it then they can't be
cast into poverty can they?

I smoke. If I'm out and about and smoking I occasionally get
approached by someone (normally young) who asks if I've got a spare
fag. I don't normally refuse unless they are obviously underage. I
figure if they are prepared to ask me for one then they don't have any
of their own. But if they had a carton of 200 fags under their arm I'd
say no. Are you suggesting I should give them one anyway?

And your point about high marginal tax rates on the poor. I agree that
HB and CTB tapers that are effectively 85% tax rates are bad -
particularly when used on working class families paying market rents.
But we are not talking about the poor here are we. The post is about
turning down an inheritance so they can *stay* poor. That's lame.

I don't think the maths work for your idea of non-means tested
benefits for all. Stands to reason that a system where everyone is
entitled to be fully supported by the state irrespective of their
means is not workable. With a nominal income tax rate of 20% and a
growing elderly population there just ain't the money to go round. Or
are you suggesting higher rates of taxation so that nobody who works
sees any of their wages - but gets free money back from the government
to live on and make up for the high taxes. Jeez - my head's spinning.

The welfare state is far from perfect but I wouldn't like the job of
redesigning it - and I certainly hope you don't get shortlisted either.

"Marvin"  wrote in message
news:5c95c4c9-2be2-4a16-9bb8-f7306ef517d2@27g2000hsf.googlegroups.com...
> > > I know this might sound a bit "controversial" but why should someone
> > > deny themselves of a large amount of capital in order to continue to
> > > qualify for public funds?
> >
> > Why should the poor be effectively "taxed" on inheritances, or savings
(through
> > capital based benefit reduction)?
> >
> > > The welfare state is a system where taxpayers contribute to help out
> > > those who need financial assitance.
> >
> > But not those who don't. Which creates poverty traps, high marginal
effective
> > tax rates on the poor, provides huge disincentives to save and huge
incentives
> > to become dependant on the welfare state. It rewards wastefulness, it
punishes
> > prudence.
> >
> > > I happily pay my taxes towards this end. I approve of the fact that I
> > > share my dosh with others who don't have enough to live on.
> >
> > > I don't make any judgements. I don't need to know the reasons why
> > > someone is hard up. Because I support the welfare state I share my
> > > money willingly.
> >
> > So, if Bill and Ben earn the same money throughout their lives, but Bill
pisses
> > every penny up against the wall while Ben saves hard and builds up a decent
> > amount of capital and private pension provision, it is perfectly fair and
> > equitable for Ben's taxes to subsidise pension credit, housing benefit and
> > council tax benefit payable to the likes of Bill, but for Ben to be punished
for
> > saving by being denied those same benefits?
> >
> > Or the 90 year old widow who gets beaten up by a thug, and evetually gets
> > compensation, only to find that it all gets taken away by the state in
reduced
> > benefits.
> >
> > You might think these things are perfectly right and fair. I don't. I think
they
> > stink.
> >
> > > So I find it a bit strange that we are talking about helping to spend
> > > my hard earned cash on someone who actually could get by using their
> > > own resources.
> >
> > > Surely this is missing the point isn't it? If someone is due to get a
> > > large inheritance then that's a good thing innit? They can then look
> > > after themselves can't they. Y'know - with their own money? They don't
> > > actually NEED the cash that I surrender to the Gov for distribution to
> > > benefit claimants.
> >
> > They might not need their state pension. They might not need the taxpayer to
pay
> > for their NHS treatment. They might not need free libraries. Maybe they
should
> > pay twice for everything.
> >
> > > The money that comes from benefits isn't free money. All taxpayers
> > > have to contribute it.
> >
> > So they should *all* benefit from it. Not just those who are lazy, wasteful
or
> > even genuinely needy.
> >
> > I have no objection to my taxes paying for the state pension, for child
benefit,
> > for non means tested disability allowances, for the NHS, for public parks
and
> > libraries. Because when I'm old, when I have children, if I become disabled,
if
> > I get ill, if I fancy a trip to the public park/library, I will benefit from
> > them.
> >
> > I object strongly to my taxes paying for any benefit for others, which I am
then
> > denied because I saved.
> >
> >
> >
> >
> >
> > > You'll never hear me saying "please can I avoid
> > > paying Tax and NI so I can help my kids get on the housing ladder".
> >
> > > As Mike (I think) pointed out, pensioners in many circs have an
> > > "assessed income period" where sudden increases in capital are ignored
> > > for up to five years. Also people over pension age are "allowed" to
> > > spend money on products and services that will improve their lives and
> > > secure future comfort. And (starting to rant now) the pension credit
> > > system is pretty generous compared to what came before it (Oct 2003).
> > > Pension credit has lifted many pensioners out of poverty for the first
> > > time in generations. Before anyone points it out I realise that there
> > > are still instances of fuel poverty but that's got more to do with
> > > macro economics and world politics - rather than deficiencies in the
> > > welfare state.
> >
> > > Please folks - the welfare state is about sharing and decency and
> > > protecting the basic rights and dignities of our fellow citizens. Its
> > > not about getting what you can and bending the rules to get more - no
> > > disrespect to the original poster. Having said that, this to the
> > > original poster - if you have got a shed load of cash coming why do
> > > you need some of mine?
> >
> > All means testing is the complete opposite of decency. It encourages all
that is
> > wrong in our society, and discourages all that is right.
> >
> > The idea that means testing is "necessary" because otherwise benefits would
be
> > unaffordable completely misses the point that taxpayers would benefit, on
> > average, just as much as they lose. It would redistribute wealth in a much
> > fairer way than the shambles and injustices of means testing.
> >
> > --
> > Andy- Hide quoted text -
> >
> > - Show quoted text -
>
> OK I'm with you on some of that. But some of it leaves me a bit
> puzzled.
>
> I see your point about child benefit and state pension and disability
> benefits. None of them are means tested. Well - I support them too in
> principle. (hurrah for me!) But they are about basic levels of
> protection built into the fabric of society for the potentially
> vulnerable. Also libraries, health provision, and the other million
> and one things that make a decent society. I would not like to live in
> the USA for example where state provision is minimal despite its great
> wealth.
>
> Your point about Bill and Ben:  I used to hear that point a lot more
> before the introduction of pension credits in oct 2003. A pensioner
> with a private pension and some savings for old age would have it
> effectively wiped out due to the Income Support means test.

Yes.

> Someone
> with no private pension or savings would end up with the same weekly
> income as the more prudent one. However, that's what Savings Credit is
> all about. Now, a person with a private pension gets savings credit
> which gives them a genuinely higher weekly income that the other
> pensioner who pissed their life's earnings up the wall. The intention
> behind this was to reward/encourage people to make provision for old
> age.

It hardly solves the problem - it's just a sticking plaster over the means
testing system to make it very slightly fairer. Someone who has saved will still
get much less PC than someone who hasn't, despite the savings credit - IIRC it's
an effective rate of tax of 40% on their savings. Remember that PC *makes income
up* to certain level - if you have a private pension of £30 a week then PC is
reduced by £30. The savings credit replaces some, but not all of that.

Then when you consider housing benefit and council tax benefit - there is no
saving credit there at all. So someone with a decent amount of savings will get
*nothing*.

I discussed this with Clive a couple of years ago, with real figures:

http://groups.google.co.uk/group/uk.gov.social-security/browse_frm/thread/fcce74ec7c716324/a951e140ff9947c8?hl=en&lnk=st&q=#a951e140ff9947c8

> I don't really understand your point about giving financial assistance
> to those who *don't* need it. Whats the point of that? And how does
> that create a poverty trap?

The poverty trap comes about because if you only give benefits to those who
"need" it, then you have to define a point, in terms of income/savings, where
the benefit is not needed. This could be a cliff-edge (like savings limits for
HB etc) or a prolonged very high withdrawal earnings band (eg the combination of
tax credits and housing benefit for families).

The result is that those who are getting the benefits see no point in trying to
escape from "poverty" because they find that earning more money makes them
trivially better off, after tax, NI, tax credits withdrawal and benefits
withdrawal. Or even worse off in some cases. So why should they put effort and
time into working harder/longer if they aren't going to benefit?

> If they don't need it then they can't be
> cast into poverty can they?

Well when you have definitions of "poverty" which are well above the level of
state benefits you can.

> I smoke. If I'm out and about and smoking I occasionally get
> approached by someone (normally young) who asks if I've got a spare
> fag. I don't normally refuse unless they are obviously underage. I
> figure if they are prepared to ask me for one then they don't have any
> of their own. But if they had a carton of 200 fags under their arm I'd
> say no. Are you suggesting I should give them one anyway?

Why do you give to anyone? Fags are hardly "needed". The government have been
trying to force the poor to stop smoking by raising taxes to astronomical
levels.

> And your point about high marginal tax rates on the poor. I agree that
> HB and CTB tapers that are effectively 85% tax rates are bad -
> particularly when used on working class families paying market rents.

And when you add tax credit withdrawal, income tax & NI to that, the marginal
rate becomes 95.5%!

Now do you understand the "poverty trap"?

> But we are not talking about the poor here are we. The post is about
> turning down an inheritance so they can *stay* poor. That's lame.

Why? What do you think the person who leaves the inheritance would have wanted
their money to be used for? For the benefit of people he/she loved, or for the
benefit of the government/taxpayer in general?

> I don't think the maths work for your idea of non-means tested
> benefits for all.

Of course they work - all it is a redistribution of income. Pay everyone a
"citizen's income", which could be the AA upgraded to include housing costs
(perhaps with regional variations in the housing element).

Then set a flat tax rate at whatever rate is necessary to make the scheme
financially neutral overall.

> Stands to reason that a system where everyone is
> entitled to be fully supported by the state irrespective of their
> means is not workable. With a nominal income tax rate of 20% and a
> growing elderly population there just ain't the money to go round. Or
> are you suggesting higher rates of taxation so that nobody who works
> sees any of their wages - but gets free money back from the government
> to live on and make up for the high taxes. Jeez - my head's spinning.

Well - obviously taxes would have to rise significantly. This has been discussed
lots of times here before - IIRC you'd need a flat tax rate of about 45-50%. No
tax allowances would be necessary as the CI is paid.

> The welfare state is far from perfect but I wouldn't like the job of
> redesigning it - and I certainly hope you don't get shortlisted either.

The welfare state in the UK is one of the worst in the world for enouraging
dependancy, dishonesty and wastefulness and discouraging self sufficiency.

A CI is probably far too radical, but there are much simpler steps which could
be taken towards making the system fairer, for instance getting rid of the farce
of independant taxation but joint benefit assessment.

In the meantime I consider it my moral duty to do all I can to find legal
loopholes in the means testing system and point them out to others :-)

--
Andy

For factual accuracy I should point out that HB and CTB allowances
increase by an amount equivalent to the maximum possible savings
credit when claimant or partner reaches 65. This means that the
claimant cannot be made worse off (i.e. get HB reduced) by getting
Savings Credit.

You said that the UK has [one of] the worst Social Security systems in
the world. So which is the better one? Any specific countries in mind?
Any details? Anything? I actually am interested if you have some
facts.

But I see now that you are not talking about the *Welfare State* in
any case. You are referring to a "Wealth Redistribution" system where
those who work harder and earn more have their income taken away and
replaced by a Citizen's Allowance which is the same for all. I'm no
supporter of right wing economics but I can't think of a better de-
motivator than that. Even China and Russia have abandoned that one as
unworkable (and requiring secret police, death camps and a
dictatorship to keep it all ticking over).

Perhaps you should be posting on a different newsgroup - but this is
not a reasoned position to take on a newsgroup called uk.gov.social-
security

PS. Keep it up though - I welcome the debate :)

"Marvin"  wrote in message
news:eb17598c-1489-49cb-abac-c9442293285b@34g2000hsf.googlegroups.com...
> For factual accuracy I should point out that HB and CTB allowances
> increase by an amount equivalent to the maximum possible savings
> credit when claimant or partner reaches 65. This means that the
> claimant cannot be made worse off (i.e. get HB reduced) by getting
> Savings Credit.

Not the savings credit itself, but their income from their private pension will
reduce HB & CTB.

The thread I gave a link to provides some numbers and effective marginal tax
rates for example private pensions, for someone entitled to a full basic state
pension and HB/CTB:

First £20 pw:  40%
Next £20 pw:  72%
Next £40 pw:  90%

> You said that the UK has [one of] the worst Social Security systems in
> the world. So which is the better one? Any specific countries in mind?
> Any details? Anything? I actually am interested if you have some
> facts.

Practically anywhere else in Western Europe. The systems are all different but
in general, the basic aspects are less means testing, fairer taxation (ie
allowing non earners to use their tax allowances) and higher rates of tax.

> But I see now that you are not talking about the *Welfare State* in
> any case. You are referring to a "Wealth Redistribution" system where
> those who work harder and earn more have their income taken away and
> replaced by a Citizen's Allowance which is the same for all.

No, I'm talking about a *consistent* rate of income withdrawal for all.

Some people with see their withdrawal rate go down from 100% (IS/JSA reduction)
to whatever the tax rate is (say 45%).

Others people will see their withdrawal rate go up from the current 31% (basic
rate tax plus NI) to 45%.

Others will be in between, eg higher rate taxpayers (41% to 45%) and mid-low
income families (70% to 45%).

As an example, currently a family with 2 kids will see a withdrawal rate
(benefits & tax credits) of at least 70% until their income is almost £30,000.
How will the inncentives change for them?

> I'm no
> supporter of right wing economics but I can't think of a better de-
> motivator than that.

Yeah, 45% instead of 70-100%.

Even China and Russia have abandoned that one as
> unworkable (and requiring secret police, death camps and a
> dictatorship to keep it all ticking over).

They never had anything close.

> Perhaps you should be posting on a different newsgroup - but this is
> not a reasoned position to take on a newsgroup called uk.gov.social-
> security

It's been discussed here loads of times.

--
Andy

Well - short of repeating myself I can't think of anything else to
add :(

Like I say - it ain't perfect but...

I guess we'll just have to wait until you are shadow chancellor and
see if anyone elects your party.

I wouldn't order that removal van just yet though...

Changed my mind:

~~~~~~~~~~~~~~~~~QUOTE~~~~~~~~~~~~~
>> But we are not talking about the poor here are we. The post is about turning down an inheritance so they can *stay* poor. That's lame.

>Why? What do you think the person who leaves the inheritance would have wanted their money to be used for? For the benefit of people he/she loved, or for the
benefit of the government/taxpayer in general?
~~~~~~~~~~~~~~~END_QUOTE~~~~~~~~~~~

Andy, Your arguments are a strange mix of the quasi-factual and the
emotive.
What have the wishes of the deceased and their familial love got to do
with this?

Why should I pay more in taxes because a deceased relative wants to
keep their wealth in the family - who in turn don't want it and give
it away to to benefit the financial institutions and middle classes
[through the grossly inflated housing market] and stay dependant on
public funds?

Grip - get one.

"Marvin"  wrote in message
news:d87587c4-17eb-4ee6-8eb7-b33569c90637@8g2000hse.googlegroups.com...
> Well - short of repeating myself I can't think of anything else to
> add :(

So no answers then? You don't want to see a tax rate of 45% but are happy that
families pay 70%+ right up to about £30,000? Oh well, you're not alone...

> Like I say - it ain't perfect but...
>
> I guess we'll just have to wait until you are shadow chancellor and
> see if anyone elects your party.

It's not really politically acceptable - after all successive governments have
been obsessed with lowering the basic rate of income tax because they think
people are stupid enough to think that low tax *rates* means low taxes. Whereas
the reality is that allowances can make a much bigger differences. For instance
in France a family of 4 on an average income will pay far less tax than the same
family here, despite France having significantly higher tax rates.

Unfortunately, history shows that voters in the UK *really are* that stupid. So
anyone who proposes a higher rate of tax but a fairer tax/benefits system
probably won't get very far.

In the meantime, like I said, I won't take any notice of those who somehow think
is morally unacceptable to find legal loopholes in the means testing system.

The 98% tax relief on pension contributions is a good one - as I posted a couple
of years ago - it used to be 96% but the recent changes to basic rate tax and
tax credit withdrawal rates now makes it 98%. I've got a few friends using it
successfully....

http://groups.google.co.uk/group/uk.finance/browse_frm/thread/6bfbbc2bcf3c968f/3aaf42244ef70b55?hl=en&lnk=st&q=#3aaf42244ef70b55

--
Andy

"Marvin"  wrote in message
news:ec1cca13-d52b-4623-9b4b-7e4e8f464700@d1g2000hsg.googlegroups.com...
> Changed my mind:
>
> ~~~~~~~~~~~~~~~~~QUOTE~~~~~~~~~~~~~
> >> But we are not talking about the poor here are we. The post is about
turning down an inheritance so they can *stay* poor. That's lame.
>
> >Why? What do you think the person who leaves the inheritance would have
wanted their money to be used for? For the benefit of people he/she loved, or
for the
> benefit of the government/taxpayer in general?
> ~~~~~~~~~~~~~~~END_QUOTE~~~~~~~~~~~
>
> Andy, Your arguments are a strange mix of the quasi-factual and the
> emotive.
> What have the wishes of the deceased and their familial love got to do
> with this?

Erm, a will is all about the wishes of the deceased, believe it or not. That's
the whole purpose of a will. If the wishes of the deceased didn't matter there
would be no need for wills, would there?

> Why should I pay more in taxes because a deceased relative wants to
> keep their wealth in the family - who in turn don't want it and give
> it away to to benefit the financial institutions and middle classes
> [through the grossly inflated housing market]

Don't forget the government (ie the taxpayer). The government benefits massively
from high house prices (through inheritance tax, stamp duty, care home fees).
The average person in the street, middle class or not, doesn't.  Even if most
are stupid enough to think they do (some people in some circumstances do,
obviously, but the majority don't).

Fortunately house prices are coming down now, but at the current levels the only
way some people can afford to buy a house is by inheriting from those whose
estates at death have benefitted from the massive rises.

I bought my house about 10 years ago when prices were reasonable, now they're
ridiculous. If my parents and parents in law leave an estate that is inflated
because of high house prices, it would be totally unfair if I and my siblings
(/in law), who already have houses, were to benefit from that excess, when our
kids, who don't have houses, would find it practically impossible to afford a
house.

So what the OP is proposing to do makes perfect sense.

> and stay dependant on
> public funds?

Why should the deceased end up donating it to the state, when they've probably
already paid tax on that income?

I would certainly never knowingly leave a will donating to anyone who wouldn't
see any benefit from it because the state would simply take it off them in
reduced benefits.

> Grip - get one.

Oh, I have one thank you! Perhaps if you understood the system a bit better
you'd understand why people have a problem with it. And will use every trick in
the book to get around the unfairness in it.

--
Andy

> Erm, a will is all about the wishes of the deceased, believe it or not. That's
> the whole purpose of a will. If the wishes of the deceased didn't matter there
> would be no need for wills, would there?

Yes - I get that simple point. I'm refering to "what do the wishes of
one deceased relative have to do with how the Welfare State should be
organised".

> > Grip - get one.
>
> Oh, I have one thank you! Perhaps if you understood the system a bit better
> you'd understand why people have a problem with it. And will use every trick in
> the book to get around the unfairness in it.

I understand the existing benefits and taxation sytem extremely well
as it goes (as distinct from your utopian ideas).
You have been a bit patronising there Andy - not for the first time in
this exchange I might add.

Its not compulsory to claim benefits is it? If someone does claim then
they should be aware that there are rules.
If they don't follow them I wouldn't lose sleep over it - but they
can't have the moral high ground aswell!

My final post on this thread. This to the original poster.

Seems to me you were seeking advice on what the rules allowed. So any
hypothetical arguments I have made about rule breakers etc are not
intended to reflect on you. Hope you have gleaned the info you
required.

"Marvin"  wrote in message
news:68308ec8-38de-409a-96ef-e94e462d2baf@p25g2000hsf.googlegroups.com...
> > Erm, a will is all about the wishes of the deceased, believe it or not.
That's
> > the whole purpose of a will. If the wishes of the deceased didn't matter
there
> > would be no need for wills, would there?
>
> Yes - I get that simple point. I'm refering to "what do the wishes of
> one deceased relative have to do with how the Welfare State should be
> organised".

Try leaving the context in.

You might as well ask what inheritance tax to do with it as well. Everything.

There are loads of articles on how to legally avoid inheritance tax if you want
your loved ones to end up with your savings and not the government.

I was hoping this thread would clarify how to do the same in this case.

> > Grip - get one.
> >
> > Oh, I have one thank you! Perhaps if you understood the system a bit better
> > you'd understand why people have a problem with it. And will use every trick
in
> > the book to get around the unfairness in it.
>
> I understand the existing benefits and taxation sytem extremely well
> as it goes (as distinct from your utopian ideas).

But you don't seem to understand how it causes poverty traps.

> You have been a bit patronising there Andy - not for the first time in
> this exchange I might add.

Oh, "get a grip" yourself.

> Its not compulsory to claim benefits is it? If someone does claim then
> they should be aware that there are rules.

Exactly, and they should understand those rules well enough to be able to
maximise the benefits they get and minimise what the state takes off them. Just
like people do wrt taxation.

> If they don't follow them I wouldn't lose sleep over it - but they
> can't have the moral high ground aswell!

The discussion was about acheiving the OP's aims *within* the rules, not
breaking them. Who suggested "they don't follow" the rules? The rich exploit
legal tax loopholes, so what's wrong with the poor exploiting legal benefits
loopholes? Assuming that the altering of the will is such a loophole, as there
was no definitive answer to my original question.

--
Andy

In message 
, 
Marvin  writes
>I know this might sound a bit "controversial" but why should someone
>deny themselves of a large amount of capital in order to continue to
>qualify for public funds?
>
>The welfare state is a system where taxpayers contribute to help out
>those who need financial assitance.
>
>I happily pay my taxes towards this end. I approve of the fact that I
>share my dosh with others who don't have enough to live on.
>
>I don't make any judgements.

You would appear to be...

>I don't need to know the reasons why
>someone is hard up. Because I support the welfare state I share my
>money willingly.
>
>So I find it a bit strange that we are talking about helping to spend
>my hard earned cash on someone who actually could get by using their
>own resources.
>
>Surely this is missing the point isn't it? If someone is due to get a
>large inheritance then that's a good thing innit? They can then look
>after themselves can't they. Y'know - with their own money? They don't
>actually NEED the cash that I surrender to the Gov for distribution to
>benefit claimants.
>
>The money that comes from benefits isn't free money. All taxpayers
>have to contribute it. You'll never hear me saying "please can I avoid
>paying Tax and NI so I can help my kids get on the housing ladder".
>
>As Mike (I think) pointed out, pensioners in many circs have an
>"assessed income period" where sudden increases in capital are ignored
>for up to five years. Also people over pension age are "allowed" to
>spend money on products and services that will improve their lives and
>secure future comfort. And (starting to rant now) the pension credit
>system is pretty generous compared to what came before it (Oct 2003).
>Pension credit has lifted many pensioners out of poverty for the first
>time in generations. Before anyone points it out I realise that there
>are still instances of fuel poverty but that's got more to do with
>macro economics and world politics - rather than deficiencies in the
>welfare state.
>
>Please folks - the welfare state is about sharing and decency and
>protecting the basic rights and dignities of our fellow citizens. Its
>not about getting what you can and bending the rules to get more - no
>disrespect to the original poster. Having said that, this to the
>original poster - if you have got a shed load of cash coming why do
>you need some of mine?

I see Andy has been suggesting that there are some current structural 
problems underlying all this.

If the state retirement pension in payment to our enquirer was £135 pw 
then he would probably qualify for much less in the way of means-tested 
benefits.  If his wife were also in receipt of a pension at that level I 
doubt they would even qualify for CTB.

Actually £135 pw is the rate that the SRP would be payable at to-day, if 
the link between prices and earnings used in its uprating had not been 
broken nearly 30 years ago.

So in this hypothetical situation he would not be claiming anything at 
all, and he wouldn't even have had to seek our advice.  He'd just have 
had the capital on top of his current income and good for him.  And 
people wouldn't really be troubling themselves quite so much about 
"benefit claimants" that they spend their taxes supporting.

Rather, they would have discussions about whether they could afford to 
pay "decent pensions" to "those who worked hard to put this country 
where it is to-day".  They would be aware that, theoretically at least, 
the pensioners had paid national insurance contributions throughout 
their lives to ensure themselves against the contingency of retirement.

One of the great benefits of means-tests, from the point of view of 
governments and perhaps others, is that it allows them to define 
"benefit claimants" as a problem.  Means-tests stigmatise - they are 
meant to.

What any society is faced with are groups within it that are simply old 
or unemployed or sick or disabled or caring for family members or 
whatever. And we should remember that any of us are in or could be in 
any of those groups and in a situation to want something back from 
society.

Clive

-- 
Clive Martin
my email address is cliveatcmartindotdemondotcodotuk