AIBU? Hiding money to obtain benefits.

Fraud is fraud, whether it’s benefit or tax evasion. They rest of us have to work and comply with regulations. The super rich have clever accountants., which is so unfair, that doesn’t make it right for the rest of the population to subsidise those that do get money by false pretences.

Similar social security system here
Post my father's death we sold my parents home. Mum was already in care . With the gifting of the funds to my son and i , mum became ineligible for payments. However her other resources paid for what she needed.
Seemed sensible to me.
Son inherited a substantial amount which set him up. We didn't need it and to be honest would have just had more holidays.
Mum wore the penalty which was appropriate

yggdrasil

I gave money to my grandchildren from the money I inherited from my mother. It is legal ( I have forgotten the term) but it means they can have more without paying inheritance tax.
There is a limit as to how much you can give to grandchildren or children as a gift per year, but this distribution is extra and doesn't count.
I don't claim any benefits but if I did I could have given the lot away without affecting my claim. Legally.

I think it’s called a Deed of Waiver when money received in an inheritance is passed on within 12 months, usually to avoid extra inheritance tax. I am looking into doing this when I receive some money from my Mum following her death. I don’t need it but it would greatly benefit my children. My children will pay a lot of inheritance tax on my death as my house alone is above the £500,000 limit ( divorced so only a single person allowance). This is perfectly legal and I will use a solicitor to take me through the process.

Totally different to just giving money away to relatives to keep collecting benefits.

When you claim benefits, they make a huge deal out of whether your pain is constant or intermittent.
Neither of the people I knew ever had bad back pain, enough to curtail them in any way (and yes, I was friends with one of them
)
Of course, they would take the precaution of making sure others did any heavy work or lifting whilst at work...
I don't find it hard to judge them at all.

Allsorts

Violet, if you ho on for many years living your life as normal, coffee mornings, holidays, doing the garden etc. You are not in excruciating pain.

I guessed there must have been something missing from your comment

Obviously you knew your friend well am made the right decision for you

I have a chdomic pain condition, it can come and go to a degree but I am very stubborn and love my job so still work. Some days I cant do much more than work and the basics of loving and looking after my 3 children who aren't grown up yet.

Others who have the same condition and discribe their pain the same do not work and have entitlement to help.

Sometimes on bad days I do think to myself, if I didnt work 35 hours a week I could manage so much more easily and do so much more, and be better off financially. I could live my life every day because we are supoised to work to live, not live to work.

So I find it quite hard to judge others because they may be well today but not well tomorrow.

I used to work with two people with the exact same pain, I reckon.
One did pole dancing and ice skating for hobbies, the other built summerhouses.
Both working full time, just quite a bit extra coming in each month, kept quiet, and squirreled away.

Violet, if you ho on for many years living your life as normal, coffee mornings, holidays, doing the garden etc. You are not in excruciating pain.

M0nica I'm not guilty of having the ideas you accuse me of. It just struck me that the OP had said that her friend had given her son a big chunk of money, and nearly everyone was condemning that. But we have had threads in the last where posters have vehemently defended their right to hold on to a large house they'll never live in again, just so they can eventually bequeath it to their children. There seems to me to be a mixed message there. I can't remember which particular posters I'm talking about, so nobody needs to get defensive.

Anyway the OP has explained that the friend is actually hiding the money in her son's bank account, not just giving it to him as a gift. It's always been my belief that no-one with significant assets should expect the State to support them. (Except with the Pension, of course.)

So, no need to get indignant.

Doodledog

No, mine neither, but I don't need to have something in front of me to be able to think about it.

I'm afraid I don't feel well enough to think about anything much at the minute.

I think it might be legal to gift money to children under various complex trusts etc in order to avoid inheritance tax - accountants are sorting these things out all the time via loopholes.

But to receive an inheritance and not declare it to the benefits agency is a crime, pure and simple. It is stealing from you and me.

She told you because it clearly never entered her head that anyone might find it objectionable in any way. Makes you sick .......

No, mine neither, but I don't need to have something in front of me to be able to think about it.

No idea.
None of my friends are in that position.
The ones on benefits absolutely need them.

Yes, the principle is there, but the practice isn't necessarily fair.

There is also the principle of what to do if a friend - someone who trusts you - tells you something in confidence. Do you betray that, as some have suggested?

Of course it's the principle.
I can only assume some people (and not always the "expected" people) have none.

You are, I believe, supposed to inform the appropriate department if your personal financial circumstances change. If you don't do it and they find out, they can reclaim money from you and prosecute you for fraud.

Either we believe in the system or we don't.

The very wealthy elite hiding their money offshore and avoiding tax is is galling (to say the least) and it shouldn't be allowed, but that doesn't alter the principle of a system whereby a safety net for those who need it is being abused.

We need to deal with both issues. And maybe the morality of both the benefit claimant and the tax-avoider are the same - they both want financial gain at someone else's expense.

However, I don't think fixing benefit fraud is going to alter the fact that such benefits are often unfairly with-held, often poorly distributed and for some - especially the sick and disabled, a minefield to navigate and simply not enough for their needs.

For me, it's just the principle.

I agree, VS. That does seem to be a perfectly sound case for claiming, unless there is something missing.

I don't see this as the same as people wanting to pass on money to children when in care. For one thing, wanting to be able to do something and defrauding the system in order to do it are two different things. For another, the funding system for people in care is manifestly unfair - as has already been said, if you save you pay and if you spend you get it free, which is indefensible, IMO. It should be funded for all who have paid in, and taxes should be raised to make this possible.

How much money is involved? *I know that it doesn't matter legally*; but all the same, if this woman has paid in all her life, and now needs benefits for whatever reason, it seems wrong that she can't benefit from an inheritance when she would be able to if she was working. If the sums are large, she should definitely declare it; but if it is just enough to allow a few treats, it seems unjust that she shouldn't be able to have them, as her father wanted.

Means testing keeps people down.

Volver I have said many, many times over all my years on GN that i can think of no good reason why someone should not be expected to sell their house to pay for their care.

We would all like to leave alittle something, or better still a big something to our children, but generally those who own their houses have been dealt a good hand in life. Their children are more likely to have had a culturally strong childhood, good education and further education and to have done reasonably well in life themselves, yes, their will be exceptions but I am talking generalities.

Why should taxpayers, many unable to buy their own homes and probably poorer than these house owners children pay taxes to support the parents of these potential inheritors, so that they can be more comfortably off.

As I said I have expressed this view many times and usually others have supported this stance.

So, volver if you were trying to suggest that people here who deplore this fraud, are more than ready to demand that they get favoured over others, I am sorry to disappoint you. Many of us are happy to accept that if we need care our houses will be sold and our children get less than they expected. What is more I have children who know my stance and support it.

Allsorts

I had my closest friend who falling at work, claimed Incapacity benefit as she could not walk without excruciating pain at the age of 48. She collected the benefit for years without me knowing that, I thought she retired early because she could afford to. The friendship ended you never really know with people.

Is there something missing from this Allsorts?

Surely excruciating pain is what that benefit is for? Or did she continue when no longer in any pain?

No one in our family has had enough to leave much to anyone after funeral expenses are paid. I think I am glad about that - not that we get benefits anyway. DH aunt and uncle put their house in their son's name many years ago and I thought that was a bit iffy though they ended up moving close to their son and needed him and his wife to do a huge amount of care over many years and were very well looked after till they both died in their 90's.

I had my closest friend who falling at work, claimed Incapacity benefit as she could not walk without excruciating pain at the age of 48. She collected the benefit for years without me knowing that, I thought she retired early because she could afford to. The friendship ended you never really know with people.

I agree Blondiescot I speak to so many parents transitioning back to work after children and so many are worse off working it is a bit soul destroying

Its all so broken

VioletSky

It has always baffled me that we spend so much more time and money catching those who commit benefit fraud than we do on tax evasion which is 10 times as much.

Especially when the benefits do at least go back into our economy

You took the words right out of my mouth. While I'm not condoning fraud of any nature, if the powers-that-be spent more time chasing up the millions (or probably even billions) hidden in shady tax evasion schemes, we could probably wipe out the need for food banks and funnel that cash where it's really needed.

If you don’t want/need all of an inheritance you can vary the will and pass it on to other family or put it into trust for grandchildren. It does not affect inheritance tax, for modest inheritances it is very useful if the parent does not need the cash.

I struggle with the ethical and moral issues raised here. I’m angry about any benefit or tax fraud. My working life exposed me to a small number of people adept at manipulating the benefit system. They were shameless, just like tax avoiders I’ve met, who use ‘advice’ from accountants to legitimately (and sometimes illegally) avoid tax.

The vast majority pay our taxes and don’t defraud our benefit system. I no longer feel conflicted. Off with their heads