A concerned individual recently asked whether their mother could face issues with the Department for Work and Pensions (DWP) if she used an inheritance to fund a wedding. The mother, currently claiming Universal Credit (UC), is about to receive an inheritance of £70,000 and wishes to gift some of it to her children for various purposes, including wedding expenses.
This raises concerns regarding the rules around “deprivation of capital,” a term used by the DWP when someone deliberately reduces their assets to maintain or increase benefit eligibility. According to Gov.uk, if a claimant knowingly reduces their money, savings, or investments—such as by gifting or transferring funds in order to increase Universal Credit—they may be deemed to have deprived themselves of capital.
However, not all spending counts as deprivation. The money spent must be for reasonable goods and services or to pay off debts in typical circumstances to avoid being classified as deprivation of capital. If the DWP concludes that money was deliberately given away to qualify for benefits, they consider it ‘notional capital’ and calculate Universal Credit as if the claimant had not spent the money.
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In a Reddit discussion, the individual explained that the inheritance will stop their mother’s UC and other means-tested benefits. They understand the rule against gifting to avoid deprivation but want to know if it’s possible for their mother to help pay for their wedding. The mother had not been able to support her children before due to health issues and wants to assist now.
Responses from the Reddit community highlighted the risks involved. Many pointed out that gifting large sums, especially shortly after receiving an inheritance, could be seen as deprivation. One user advised that while the mother can spend the inheritance as she wishes, giving significant amounts to family members might trigger scrutiny. They recommended seeking advice from a financial advisor to handle the windfall appropriately.
Others emphasized that deprivation of capital is judged based on the intent behind spending, not just where the money goes. Even moving funds to a pension might be considered deprivation if done to qualify for benefits. Some shared personal experiences of strict monitoring by the DWP concerning unusual spending during claims.
In summary, while the mother can use her inheritance, gifting it to family members, particularly for large purchases like weddings, may risk a deprivation of capital ruling by the DWP. Consulting a financial professional is advisable to navigate this complex situation safely.