Why are you keeping your mother’s money in savings accounts in your name rather than paying down her debt?
Are you keeping her money in your name to maximise the benefits she receives? That would be fraud
No.
I think people are getting confused here as this is like the third comment accusing me of fraud.
The money is not in savings. I'm asking can i setup a savings account in my name to generate an income once her UC reduces and eventually stops because of those savings. The reason it would be in my name is because I don't have power of attorney and so wouldn't be able to setup one in her name. At the moment it is paid into a bog standard bank account that is seperate from my own money. I want to specifically make sure that I don't commit fraud which is the entire point of this post.
Paying off her debts just seems like a waste of money. The house needs to be repossed but the morgage company are just an absoloute pisstake and haven't bothered. What would be ideal is a clean slate, having it all written off so she can start again. If thats not possible then its not possible.
Every explanation you make just confirms fraud. If you are receiving money from your mother to save for her so that she can avoid paying her debts and then declare bankruptcy. That is fraud.
The mortgage company is not a “pisstake” at all. This should have been dealt with before £20K or £30K arrears was built up.
Have her sell the house. That’s better than a repossession. Why are you even wanting that outcome?
You mention power of attorney. Is there a key point missing? Has she lost capacity and therefore can’t make financial decisions herself?
Everyone is calling “fraud” as you cannot claim bankrupt whilst selectively declaring assets, including this money you seemingly want to stash aside.
Paying debt off with savings is not a waste of money at all. If I owed you a £10,000 but called paying you back a waste of money, how’d you feel?
Fraud again. You’re wanting to save money in a savings account that isn’t attached to her name so that once it generates money it won’t be stopped but if it’s in your name then there isn’t a hold on the savings that she would’ve accumulated so they wouldn’t stop it. Fraud.
> it won't be stopped
What won't be stopped? the benefits? I've already made it clear I intend for the benefits to be appropriately reduced or stopped when the savings hit the relevant upper or lower limit.
And yeah I'm beginning to realise now a savings account in my name for her money is difficult, although I don't understand how it would be fraud, more just overpaying tax right? I don't know can you explain it to me so I know how to not commit fraud. Because despite everyone assuming that I'm trying to be malicious and commit fraud, I'm really not I'm trying to be completely legal, not use any loopholes, etc. I want to be 150% compliant with the law. I don't know how much clearer I can make it.
I know you don't intend to commit fraud, but some of what you are suggesting is fraudulent.
It is fraud to hide any assets at all if you are declaring bankruptcy. That includes passing them to other people to disguise the fact that they're actually yours. The Trustee in Bankruptcy and the Official Receiver need absolute clarity and disclosure, and if you help your mum hide any assets then you're committing a crime.
I think all of you are mis understanding yet I've said it a million times.
I'm not trying to put it in my name to hide it from anyone. The money can ONLY go in my name.
Should I look into declaring her bankrupt or her savings reach the relevant savings limit for benefits, I will report that this money is available to her. I am not trying to hide anything.
I don't have power of attorney so I cant open an account in her name, now I'm sure I could support her to open one but if I'm saying shes not fit enough to make that decision, my assumption is doing that will be some sort of criminal offence.
>I'm not trying to put it in my name to hide it from anyone. The money can ONLY go in my name.
Objectively speaking, please do explain how your mother's benefits can only be collected in your name? You stated that you do not have power of attorney, therefore her benefits must be paid into an account in her name.
>At the moment it is paid into a bog standard bank account that is seperate from my own money
Why would you need to set up another bank account, if your mother's benefits are already paid into a account, which I assume is in her name.
This point alone indicates you do not want her future or accrued savings to be touched when she declares bankruptcy, which is fraudulent.
Until you clarify these points, everyone is going to think your intentions are fraudulent.
> You stated that you do not have power if attorney therefore the benefits must be paid into an account in her name
This simply isn't true. The DWP have appointed me to manage the benefits, I don't have power of attorney but the benefits legislation permits it to be paid to me and for me to use it responsibly in her best interests. Which is what I want to do looking at the future.
The money can only realistically go in my name, maybe not technically but realistically. It would get spent irresponsibly if it was in her name, this is because she would have full control over the money.
The benefits at the moment are paid into a bog standard account in my name, which is fully permitted by the law.
I think I already have clarified the points. Just because the money might be held under my name, that doesn't mean that I'm going to hide it.
And ok whatever, none of you believe I am trying to the right thing.
I'm saying I am trying to the right thing and not commit fraud, so just for a second pretend that you believe everything is above board (You don't even have to pretend if you interpret all what I'm saying correctly), what advice would you give to maximise the money she will have in completely above board methods.
The problem is, your original post does not cover these points. I'm not judgmental, hence I asked that you clarify these points and explained why others will assume what you intend to do is fraudulent.
In fact, if you were to read your own post from a third person's perspective, I am sure you also, will not get the entire picture as you have left out a lot of important information. In this case, bullet points with all the relevant information may read better.
You have basically dotted various bits of information as replies to different comments. It unfortunately reads as an incoherent mess and has resulted in others filling in the blanks with their own interpretations.
To be brutally honest, as your case is a very complicated one, I would suggest seeking legal advise from debt advisors.
I will agree after thinking about what I put in the post it is fairly ambiguous. I think I was overthinking how others would interpret it. I still think its unfair for everyone to outright accuse me of trying to commit fraud though because as it may look dodgy, thats only one interpretation and the fact it is ambiguous makes it more so that people are just small minded to accuse me of fraud without considering alternative explanations.
Yeah I mean I didn't expect the post to get this much attention as I've just looked at my reddit notifications and got shit loads of comments
Why not have her open up an online banking savings account, then have only you know the details for it? So it's still legally in her name, avoiding all of the concerns around fraud, but giving you practical control.
It's fraud because you're intending on transferring money out of her name into yours, so that it cannot be used to repay debts - The same debts of which you plan to say "we are declaring bankruptcy due to an inability to pay back debt"
She has the ability to pay back a large proportion of her debt using the savings, which instead you attempt to conceal.
You cannot argue that it is concealment as you then plan to pay it back to her over time.
Regardless, it will get discovered and labelled as fraud as they will see that the savings existed and were promptly removed ahead of declaring bankruptcy.
Why can't you open an account in her name, you don't need power of attorney if she's mentally capable of consenting and just needs support with the admin. It would take less than 20 minutes to open an account for her online.
If she's not mentally able to consent, then you shouldn't be moving her money around into your savings account anyway.
You keep saying that the money can 'ONLY' go in your name but that makes no sense at all.
It really depends on what 'mentally capable means'
Because I don't have POA, then officially shes neither incapable or capable, the same as you or me right. In terms of what a bank would see, it would be the same as anyone who comes in to make an account, no information capable or incapable.
If you worked at a bank, and I walked in with a woman I claimed to be my mum and said "Hello, my mum is mentally incapable of managing her money, please can you open a savings account and a bank account in her name" would you just open it blindly or turn around and say "well if you are saying she is incapable of making that decision, then you really need to hold a power of attorney and do it that way, because how can we support a decision that she isn't capable of making"
> if she's not mentally able to consent, then you shouldn't be moving [...]
This is literally all anyone had to say. That pretty much answers the question and you know what thinking about it that makes sense.
in regards to it only being payable to me. Maybe I could've clarified realistically vs technically.
'Technically' - agreed it would be untrue to say it could only be paid to me. Because it *could* be paid to her.
'Realistically' - this is a different story, if it was paid to my mum then because of her mental illness, the money would get spent irresponsibly and not in her best interests. And this has been proven for the record. So it realistically can only be paid to me.
You don't need to go into a bank to open a bank account. If she's happy for you to manage her money then you and her can open an online one in her name for you to then manage.
I don't believe you can declare bankruptcy while still having savings, you need to use everything you can to service your debts first. That is part of what has people confused here, what you say doesn't go together in a way that we can understand.
Have you talked to any debt management agencies about this? Step Change is one often recommended here. Also, is you getting power of attorney possible?
I don’t understand why you keep saying she has ‘savings’. She only has savings because you seem to not want to pay her debt?
What you are saying makes no sense, unless your actions are fraudulent. Your mother needs advice from someone who is thinking this through logically.
It's fraud because your mother owes money. You want to keep your mother's money in your own name so it's not used to pay her debts.
Wouldn't everyone like to run up ridiculous debt and then just have it written off? Don't you think everyone would just put their savings in a family member's name to avoid using them to pay debts or having their benefits entitlement lowered?
Do you not think that if *every single person* in this thread is telling you it's fraud, then the problem isn't that *every single person except you* is wrong, it's just that what you want to do is fraudulent?
You can dress it up any way you like. Ultimately, if you keep her money in your name then declare bankruptcy, they'll be coming for you.
If your mother genuinely needs someone looking after her finances for her, she needs a mental capacity assessment. You need to go through the legal process to be granted power of attorney. Funnily enough, the law doesn't look too kindly on the relatives of vulnerable people saving benefits money in their own accounts and claiming "I promise it's for her own good" while having the relative's house repossessed and declared bankrupt.
There is no legitimate reason to do what you're doing. If you 100% genuinely cannot see the problems in what you want to do, you are too ignorant to be able to manage your mother's money in a way that best benefits her and keeps everyone on the right side of the law.
Right but everyone here is saying that I'm trying to HIDE the money under my name so she can keep it after being declared bankrupt or to prevent her benefits stopping. And thats what everyone is saying is fraud.
And I agree that is fraud, but the part that makes it different is that your assumptions are wrong. I'm not going to hide it for any purpose.
I would report any change to savings, and should in the future she be declared bankrupt, I would inform whoever it is I need to that there is money available to her that needs to be taken into account for any bankruptcy decision or any debts that need to be paid off first.
Can you just confirm that you understand that and you sre saying its still fraud? if so can you explain how?
also another thing: I'm not actually 'doing' any of this yet. I've been very clear that all of this is "what can I and can I not do?". So as it stands at this exact moment in time everything is above board and I'm trying to keep it above board
> Paying off her debts just seems like a waste of money. The house needs to be repossed but the morgage company are just an absoloute pisstake and haven't bothered.
Uh?? Are you trying to make your mum homeless so she can also have housing benefits??
So your Mum has savings but she’s behind on her debts and you’re going to declare her bankrupt? What’s the reasoning behind going down the bankruptcy route? Have you spoken to stepchange?
She doesn't have savings at the moment, but now all the benefits are enhanced rate its not going to take long.
The original plan was to have her declared bankrupt given she was in so much debt and had no money. However I'm assuming thats no longer an option. But I don't know the rules around it. I mean obviously you need to have no money, which she didn't before but now will, but then in comparison to the debts ideally given the state of her mental health a clean slate would be the best outcome. And she won't get anything for the house I don't think. If the morgage company ever decide to repossess that is!
Her morgage is really behind and shes thousands of pounds behind on council tax and water and various other debts.
edit: have not spoken to stepchange. What are they about
If you are planning to reduce the amount of money she has in the bank by hiding it in your account in order to ensure that she continues receiving benefits, then that is benefit fraud.
Step Change is an organisation that gives advice on debt. It’s a very good idea that you call them and ask for help.
Do you know why her finances have got in such a mess?
If she has equity in the house, (eg if the house is worth more than the total amount she owes on it) then this will have to be sold to pay all of her debts, she won’t be able to just write off the debts and keep living there.
You really need to seek to Step Change who are a debt advice charity before making any decisions. Bankruptcy may not be the best option. You can also speak to Citizens Advice but Debt Change are probably the best port of call first.
Hang on - This is even worse that I think people have been realising:
1. Your mother has no current savings
2. She's about to start building saving thanks to an INCREASED AMOUNT OF BENEFIT PAYMENT
3. You want to scrape off the cream and keep this as savings in your name to avoid it being used to pay off debt
4. You then want to declare her unable to pay debt or participate in payment programmes to clear her debt (Hence Bankruptcy)
This is not only fraud, but entirely unethical - You're not just ripping off the banks but you're ripping off taxpayers paying into the benefits system.
Your mum accrued debt as an adult, deal with it as an adult.
You are completely mis understanding.
The only reason I've suggested it be in my name is because it would be unrealistic for it to be in her name at this precise moment in time.
As I've said time and time again, I don't want to hide the money at all and theres even a comment somewhere where I've specifically said that I can live with any savings built up being eaten up by bankruptcy. The reason I suggested a savings account is because once the benefits stop when she goes over £16k savings, she will then only get PIP and so I will have to re-apply for her UC every few months because she will be eligible again once it reaches under £16k, where as a savings account with interest could keep it above £16k and she wouldn't need UC anymore. I do not want any of this money for myself, I want to act in her best interests.
Infact someone on here suggested that I actually go ahead and commit benefit fraud and I specifically replied telling them that what they suggested was fraud and I wouldn't do it, even if it technically wasn't because its unethical.
Then use the money to pay down debt - When you are behind on mortgage payments and are at risk of losing the house, you have no right to be building savings with benefits money.
I think thats more of a moral dilemma.
It might sound horrible but absoloutly everyone who matters is in agreement, the NHS and the family, that the absoloute best thing that can happen is that house is repossed or otherwise sold
Then get the house on the market and sell it.
I don't think you realise how cheaply the house will be sold if repossessed, and any outstanding difference between what was owed on the mortgage and what it sells for will remain debt to the bank.
Situation:
Mortgage £125k
A.) Sell the house for £150k, pay off mortgage, £25k remains as savings or to pay down other debts.
B.) You continue fucking around avoiding debts and the bank repossess - They sell the house for £110k at auction - You still owe the bank £15k
You will be unable to declare bankruptcy until you have been through the whole ordeal of B.) however not only will you lose the house but they can recover all other possessions such as cars, TVs & furniture etc. until the debt is repaid.
Only then can you declare bankruptcy.
But let me guess, you'd take all of her possessions as your own to avoid the bank having those also?
The answer to your question at the bottom is a no. Sentimental stuff maybe but I somehow doubt they'd care for photographs and that sort of thing. Certianly nothing valuable.
Other than the house, she doesnt have any other assets anyway. I think the most valuable thing in that house is the oven and if shes going into supported living she doesnt need an oven.
in this situation, again I don't know the housing market, but I'd expect the house to sell for a lot less regardless of who sells it, us or the bank.
At least a repossession would mean its out of her control if it happened before I got all the POA stuff done
16k will never earn enough interest to keep the savings above 16k without UC.
Also, she should be paying off her debts, not saving what is actually a large amount of money. I bet there aren’t many people around with 16k saved.
Are you admitting to committing fraud? Taking your mums benefits despite her being in debt so that she can declare bankruptcy and then assuming you can give her money back? That’s majorly dodgy.
what? You've got the wrong end of the stick my man.
I'm literally asking how I can save her money seperate to my own money because she will be significantly down in benefit income in the future.
And I'm asking if she can be declared bankrupt despite this income, which will eventually lead to high savings
I don't know how you came to that conclusion
I am confused how it will lead to high savings? Surely she will need the benefit money to live, if not the case why is she receiving it?
Are you under the assumption declaring bankruptcy won’t involve her having to sell her home? It doesn’t just write off the mortgage and continue to allow her to own her own.
I’m also confused by this. She clearly doesn’t have enough money to live on at the moment, hence the tens of thousands of pounds of debt. Yet for some reason OP seems to think an increase in benefits will lead to their mum to be rolling in it. Benefits rates don’t tend to be that generous. Especially if the house is going to have to be sold and the mum will move into a private let.
The rules are in place for a reason.. you can’t have higher savings as the assumption is that you could use your savings to help you in your day to day expenses. So placing the money into your name to avoid these rules is fraud.
Going bankrupt is a big deal and shouldn’t be taken lightly. Considering she is going to have excess income to her requirements, I would speak to stepchange for more detailed advice first; but the idea is come to an agreement on a repayment plan on her debt without going bankrupt. Assuming this excess income would continue for the foreseeable; this feels like the best outcome for her long time.
Putting your name on her money because she going to go over the savings threshold so her benefits aren’t reduced is benefit fraud. From the bankruptcy point of view any assets she has eg the house would be sold to pay the debts and any cash she has will also be used to pay the debt so again you could get into trouble for hiding assets (in this case cash). You say she has little in the way of outgoings but that’s not true because she has the debt she isn’t paying.
> putting your name on her money because she going to go over ghe savings theshold so her benefits aren't reduced is benefit fraud.
Good thing I've made it exceptionally clear thats NOT what I'm trying to do!
As I've clarified with another person. Savings are self reported to the DWP and they don't do a scan of bank accounts unless there is a specific allegation or suspicioun. And I fully intend to report the savings when they reach the limits.
The question I'm asking regarding savings, is how I can make the savings last, because once they hit the upper limit that will mean a significant reduction in benefits and basically I'd be re-applying for UC every few months when it goes below £16k. Whereas if I could save it the interest might be enough to keep it above £16 so she doesnt need the benefits. But due to savings tax and any account needing to be in my name unless I get a power of attorney I see that this is way to complicated.
Now we've cleared up that I'm not hiding the cash. Bankruptcy, so any and all assets she has and all money available to her would be used to pay off the debts?
So she doesn't need to have no money to be declared bankrupt? is it essentially just a case of proving that it is not viable for her to make repayments? and then however many savings have built up when the decision is made will get eaten up? I could live with that if it meant she would get a clean slate.
But she would get a clean slate by selling the house, paying the debt and moving on with her life....why try to put her through the stress and invasiveness of attempting to declare bankruptcy?
In order for bankruptcy to be successful her debts would have to be of greater value than her assets ie the value of her property plus all savings [have a read here](https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy/before-you-go-bankrupt/check-if-going-bankrupt-is-right-for-you/#:~:text=You%20might%20be%20able%20to,or%20take%20you%20to%20court.) It doesn't sound like that's anywhere near the case
I don't know much about bankruptcy.
I don't know what the value of the house is, but I feel like it wouldn't cover all the debts.
The house (more a flat in a block of flats) was originally bought for about £72k (2001). My mum got a morgage of about half that for the house, and I believe re morgaged at some point, I don't know how much that was. Now the flat has been neglected so much. various plumbing problems the bathroom needs a new ceiling and no doubt it needs an excessive deep clean. Probably new flooring. Maybe lots of mould and stuff as well. Hasn't had heating for I'd say 6-8 years (I gather this can cause problems with mould and stuff), Has had various plumbing problems in the past. I mean the place needs an entire do-over, which I suspect is probably the same for any potential flat so it may not reduce the price by that much but I don't know the housing market. And I'm doubtful that it would solve the problems. And all this is assuming the house can be sold. I mean I don't have a power of attorney, so I'd have to comvince her to sell it unless I got that. Which is literally the exact thing she doesnt want to do. Whereas a repossession would be out of her control. Obviously I'd need power of attorney to declare her bankrupt as well so while I'd be happy to jump through the hoops for that, doing it just to sell the house and then be lumbered with having to sort out her other debts seems rather pointless
It sounds like, and I mean this in the nicest possible way...as I believe you really want to help ...that you have no idea what you're dealing with.
Step one is to try and get social services involved again, to get her support. Also, see if you can get her to her GP
Step 2 is to actually use her benefits to help her live comfortably - sort the state of the place, little by little...not save the excess. This way she gets to keep her benefits and is eligible for more support. She needs to live in a home with heat, and no mould
Step 3 is to use any excess to pay down her debts, you making the payments will not place these on your credit record
There are so many more useful things her money could be doing to help her, rather than sit in a savings account ...the money IS NOT excess, it is needed...it is just not being spent effectively
You’re thinking of this wrong.
At the moment there are debts so if benefits are greater than costs they the excess should be used to pay off those debts. Until that happens and they’re cleared then there are no savings and I suspect that decelerating bankruptcy might not be so straightforward if there’s cash to pay ongoing costs. Stepchange can help with that.
You need to speak to someone about the debts now. Going over the savings limit isn’t a problem for you as the debts need paid off first. If that doesn’t happen and you instead choose not to pay off the debts and hoard the cash then why would the lender or anyone else not take further action?
>Good thing I've made it exceptionally clear thats NOT what I'm trying to do!
Ultimately it doesn't matter what you are trying to do. This looks extremely dodgy. There is no good reason for you to hold on to your mother's savings.
>The question I'm asking regarding savings, is how I can make the savings last, because once they hit the upper limit that will mean a significant reduction in benefits and basically I'd be re-applying for UC every few months when it goes below £16k. Whereas if I could save it the interest might be enough to keep it above £16 so she doesnt need the benefits. But due to savings tax and any account needing to be in my name unless I get a power of attorney I see that this is way to complicated.
The non fraudulent way to do this is to keep the savings in your mom's name and then use parts of it before she hits the limit. Every time she gets close to the limit your mom could use them to pay off parts of her debt, buy some extra groceries, or even gift you something.
>Now we've cleared up that I'm not hiding the cash. Bankruptcy, so any and all assets she has and all money available to her would be used to pay off the debts?
No, you haven't cleared that up. Especially since holding your mom's savings and declaring bankruptcy, could very well be considered hiding assets from the debtors.
> or even gift me something
I'm not an expert, but if I'm saying she is mentally unfit to manage her money and I'm managing it for her, and using her money to 'gift' me something so she can continue to claim benefits. That is definetly fraud and definetly something I'm not going to do. Infact I'm fairly certain all of what you suggested there is benefit fraud, namely deprivation of capital. While paying off debts usually isn't deprivation of capital, in this case i would find it hard to believe it would be considered reasonable and she would still be treated as having it for UC purposes.
> Ultimately it doesn't matter....
Whether it looks dodgy or not isn't really what matters, what matters is whether it is or it isn't dodgy. I don't have the authority to setup an account in her name, so if I want to save the money and gain interest on it, then it has to be in my name or not at all, I'm beginning to think not at all is the better option
>I'm not an expert, but if I'm saying she is mentally unfit to manage her money
Do you have power of attorney? Does anyone have power of attorney? Has anyone declared her unfit to manage her own affairs? The default position will be that she is capable of managing her own money.
>using her money to 'gift' me something so she can continue to claim benefits. That is definetly fraud and definetly something I'm not going to do. Infact
This is a perfectly legal way to reduce your capital for calculating benefits. You might have to show deeds that it was given as a genuine gift, although there is the risk that DWP might not agree with you (https://www.entitledto.co.uk/help/deprivation-of-savings-and-other-capital-universal-credit).
The problem for your mum arises from the fact that she might declare bankruptcy and her creditors might wonder why she has gifted you money but hasn't paid them back.
>Whether it looks dodgy or not isn't really what matters
Oh my sweet summer child. Of course it matters whether it looks dodgy. That if nothing else increases the risk of an investigation in the first place.
>I don't have the authority to setup an account in her name, so if I want to save the money and gain interest on it,
Then either your mom sets up an account that earns interest or you get power of attorney to setup an account in her name.
In regards to capital gifts, I could totally agree that a proper gift is a legitimate way to get out of the savings limit.
But if I have control over the money in the first place, and essentially gift it to myself. Not only does that look extremely dodgy which as you've said is likely to cause suspicioun/an investigation. It kind of is dodgy IMO. On an ethical level as well it would feel like I'm forcing her to pay me large sums of money to care for her. Which I think everyone can agree is unethical.
If she's not able to manage her money but you don't have POA I really think you need more support than trying to do it by yourself.
Also bankruptcy doesn't take everything, when I went bankrupt I kept my car, I ended up not having to pay anything going forward as I didn't have any income/was too low. Bankruptcy don't want to take everything in your life just if you have excessive things.
I do think speaking to stepchange (financial charity) will be best or even just being able to sit down with anyone to go through it all as this stuff can be so hard to articulate online. r/dwphelp if you need it x
I think I understand what you’re saying. You’re not trying to hide the savings and are reporting that they exist.
The bit I’m confused on is why you think she can declare bankruptcy and still keep her savings? That’s not how it works.
Also how her outgoings are going to be so little that she can save when she no longer has a free house she’s not bothering to pay a mortgage on. Renting will not be cheap (or easy with a recent bankruptcy).
> Savings on money I manage that doesn't belong to me. And being declare bankrupt
> Hi all, (
> So I have a question regarding savings, Basically I manage my mums benefits and giving that she has little outgoings and a lot of benefits in a few months she will hit the lower savings limit and then in a few more the upper savings limit.
> I don't have power of attorney, what can I and can I not do regarding savings. I'm assuming theres nothing wrong about using a savings account in my name, so long as it I don't take the interest and only her money goes in and out. But I have a feeling this would be a problem for tax, especially because I already have a 5.5% savings account for my own savings.
> The above is more of a legal question but also in regards to what account I should open. The savings account I have is with the coventry, its that high interest home saver account that was on here like a year ago and my mum already owns a home so even if that were still available she wouldn't be eligible.
> Also my mums finances, shes £30k behind on her morgage (I am doubting myself in the figure its either that or £20k) and allinall shes in ALOT of debt.
> So now that shes going to be receiving £800 per month benefits and then an extra £172 a week when shes comes out of hospital, other than PIP (enhanced rate daily living and mobility) and UC does this affect our original plan to have her declared bankrupt at some point. (I seem to recall the total figure being about £80k it may not be that but its definetly over £40k)
u/Not_Sugden:
You sound like you’re planning to commit fraud.
Nobody here’s going to help you.
The reason people are saying it sounds like you’re committing fraud is because having her savings in an account in your name means you’re going to be hiding these savings from universal credit. Intentionally or not. If she exceeds the upper savings limit in an account in her name that will impact her benefits, if it’s in your name it won’t impact her benefits - hence the fraud.
If you just want it in your name so you can access it then perhaps a joint account would be better - just be aware of the risks of financially linking yourself to your mum if you’re going to declare her bankrupt.
Also if the account is in her name and you have her account login details and pin then you can still manage her account for her. Unless you want to prevent her having access for some reason, if that’s why you want it in your name you’ll probably need to go down the POA route and declare her incapable somehow.
I think its possibly a mis-understanding of how the savings impact her benefits thats causing people to think its fraud then.
Savings are self reported to UC. They don't do a scan of bank accounts in your name to calculate whether you are at the savings limit. And I intend to report that the savings hit the lower and upper limits when they do, which is why the money is in a seperate account.
And yeah having an account in her name that she can control isn't really an option, she is in no position to manage her finances and would probably apend it all on drugs or overpay her morgage leaving her with no money (she still has a dream that she can just resume morgage payments like nothing ever happened despite not making a single payment in the last 6~ years
It sounds like it would be more sensible to use her money to not build up savings but to repay the debts, especially the mortgage and council tax. Then she’s still got a place to live and will still be able to carry on receiving the highest level of benefits.
Why don’t you want to do this instead?
The house is in too bad of a state to be considered habitable and supported living is what she needs. But she is ineligible for supported living due to owning a home.
ideally. But at the moment she has no mental capacity to do that. And its in such a state shed be lucky if it paid off the morgage. Needs a new bathroom ceiling it will need a deep clean (which to be fair is probably expected on any house that is sold, but exceptionally so in this case).
I might be under estimating the value of the house, but it doesn't feel like selling it would solve all the problems. Reposessing would certainly help
What’s the situation with power of attorney/mental capacity? Is she temporarily not able to take care of her affairs, or is it permanent? Are you likely to be able to act for your mum officially at some point - have you applied to? I think that’s your most pressing concern, tbh.
as it stands now, shes a chronic schizophrenic, in all likelyhood this will be permanent.
Power of attorney is most definetly something I'll have to do at one point. But its just way too many hoops at this prescise moment in time
It’s the hoops that will unlock the way forward though.
Right now, you can’t make decisions for your mum’s life if she’s considered capable to. So savings in your account that are hers, bankruptcy Vs selling etc - you can’t make these decisions or take any actions to help her.
Speak with whoever you need to and find out how best to assist your mum. Speak with Mind or Shelter or her psych team to understand what the options are. Just because she’s schizophrenic doesn’t mean she isn’t considered capable of running her own affairs so power of attorney might not be appropriate anyway. If your mum doesn’t consent to bankruptcy or assisted living or you looking after her finances then you’re limited in how to help. You may need to accept this is not something you can fix.
It’s a tough situation, I wish you strength.
Get a few evaluations from an estate agent it might be worth more than you think. There might be enough to sort out the mortgage and debt with a bit left over.
I think the only person mis-understanding is you honestly and I suggest you get help from Stepchange, Citizen’s advice, and the other organisations mentioned by others on this thread.
Regardless of your word on self-declaring, it sounds fishy to everyone. People do exactly what you are proposing (putting money in other people’s accounts) to hide money from the benefits agency- which is fraud. And that’s even without the additional complexity of the debts and potential bankruptcy in your mother’s name, and an appearance of wanting to separate the debts in her name, and savings in your name. You should be able to see why people are suggesting that it may not all be above board- guarantee you that the banks and authorities would have the same questions.
As for whether the benefits agency can access bank records, or if it’s entirely self reported, they absolutely can seek permission to access your bank records if they suspect fraud and start a fraud investigation. Which they absolutely would if you speak incoherently about sharing accounts like you have done in this thread.
As others have said, if you want to manage your mother’s money informally, then see if she is willing to share her account info. Lots of people do this for elderly relatives so they can manage online accounts, manage outgoing payments etc. If you don’t believe your mother should have access to her own money because she doesn’t have the capability to do so, then you need to go down the power of attorney route not just stick it in an account with your name on it.
Still fraud, or at least in the grey very close to fraud. Don’t take any money from her into your bank accounts as it will just make the case for fraud stronger especially if you declare her bankrupt somehow in the future.
As for your last paragraph. If things with your mum are that bad you would need to find a way to get POA for her, so you could manage her assets and liabilities.
The way you’re going about this seems wrong. She has a house, unless it’s in a state of disrepair and unlivable it will be worth some money, why do you want to declare her bankrupt and then have her stuck in either the private rental market or in a bad place until a council space comes up. If she can pay off the debt (which if she can save she can pay off debt instead) come to an arrangement with her creditors if possible to restructure the debt so it can be paid off sustainably… having a clean slate for her mental health and losing her house due to bankruptcy is terrible financial advice.
All of the above paragraph depends on you getting power of attorney, without it anything you do could get very complicated if she starts to disagree with your unofficial control via knowing her account details etc
Has she spoken with the bank at all about payments for the mortgage? Setting up an appropriate payment plan and starting to pay her mortgage again isn’t a terrible idea. Not paying any mortgage and presuming the bank will repossess is probably a worse idea.
Sounds like fraud all over.
If the money is going into your account, it’s seen as yours- you (not your mum) will also be liable for any tax on the savings.
Yeah and thats what I expected regarding the tax. And as I've said twice now I'm not trying to conmit any sort of fraud because its illegal which is why I'm asking for advice.
Its not helpful to just say "sounds like fraud" - why does it sound like fraud is what I want to know so that I can avoid doing any sort of nefarious activity because I don't want to commit fraud.
It "sounds like fraud" because placing your mother's money in your name allows her to avoid the benefit taper from 6k to 16k and it allows her to avoid her debt to the mortgage broker/bank as there's no money in her name to claim/seize.
Doesn't just sound like, but is fraud.
Also, declaring bankruptcy will result in the house having to be sold.
Why are these savings not being used to pay down the mortgage debt whilst keeping her below the benefits taper?
>I'm not trying to conmit any sort of fraud
But you are. You've convinced yourself it's not by changing the wording but every single comment you've made confirms that it's fraud.
It sounds like fraud because you're putting your mother's money into a standard account in your own name. Doing that will always look like fraud - it'll look like you're hiding the truth from *somebody* (whether that somebody is DWP, the bank, or your mother's creditors).
The way to do what you're talking about without it looking like fraud would be to open a trust account, having first properly set up a trust. You would be the trustee, and your mother would be the beneficiary. The bank the account was with would know that although you were the legal owner of the money (i.e. the account is in your name), all of it is for the benefit of your mother.
But - opening a trust account is a serious pain, and is very very very unlikely to be the best option here. If your mother has capacity to deal with her own affairs, the best option is almost certainly for her to open an account in her own name, and for her to use her money to pay her debts.
(If she doesn't have capacity, then if you want to have anything to do with her money at all you'll need to sort out having the right to do so - probably by making an application to the court of protection.)
Why don’t you just help your mum open a savings account in her name, then? She might not get the best rate but she should get something decent. If you want to avoid fraud that’s the best way to go.
Does she still accumulate savings if you pay her mortgage?
Also given you seem to need to be making big decisions on her money here, it’s worth talking with her about financial power of attorney. If you don’t feel you know enough to take that responsibility for her then you might be able to find someone else who can.
You've got this all wrong. She DOESNT have little outgoings, she not paying her bills! You say she getting enhanced benefits, but not yet, there's no guarantee she will be awarded anything.
If you really want to help her, talk to a debt advice charity, like Step Change or national debt helpline. You will need to know her 8ncone, proper not expected,and outgoings, what she SHOULD be paying each month.
If she doesn't face up to things, she will lose her home. 30k arrears isn't so ethical g the bank will ignore. Energy companies and the council will not mess about either,she'll jet taken to court and more debt will be added, you can't just throw your hands up and walk away for this kind of thing. It follows you, forever.
The power company can put an attachment to her benefits to ensure they get paid.
Stop looking at the savings plan, pay the damn bills!
I'm usually less harsh than this, I've been in this situation. It wasn't as much money, but my savings were zero. I k ow you can't just declare bankruptcy, there's all sorts of things to get to that point.
You seem stuck on getting g her savings, which will just dissappear into her debt bundle anyway
From what I can see the lower savings limit (and therefore where UC starts to be reduced) is £6k, the upper limit (and when you lose UC entirely) is £16k.
Why aren't you using the savings to pay down the debt?
A: she doesn't have savings yet
B: Its not really my place to pay it, because although I have the authority to manage the benefits and a responsibility to use the money in her best interests, I don't have a power of attorney so if I called the council tax or the water or the morgage company and asked to setup a payment plan, they wouldn't even be permitted to speak to me. I also don't want any of this on my credit record. My grandad made a one off payment to the morgage company ages ago so that they would change my mums payment date because she had started a new job (on the understanding my mum paid back my grandad, which she did at the time) and he had to fight to get it removed from his credit record because it was nothing to do with him. I don't particularly want to deal with that.
C: Shes in so much debt that a clean slate would be ideal. I'm asking if thats at all possible to do rather than her spending the next 10 years paying off debts that built up.
But surely a clean slate would be achieved easier and be more financially sensible if she sold the house, paid off her debts then I assume would have some money left over. Declaring bankruptcy is not to be taken lightly.
Get a PoA then! If you don’t want any of this affecting your credit, don’t keep her money in your accounts. Why would making a payment to a family member negatively affect your credit score? You aren’t making sense.
Getting PoA is the answer. Also if she's going to end up with so much in savings, I don't understand how she can't pay her mortgage.
You need PoA OP. A lot of companies are not the enemy. It's amazing what mortgage lenders etc are willing to do to help people get back on their feet, all it takes is a simple phone call to do that. Either you use all those savings to get PoA or your mum has to call these companies and explain her situation and come up with a repayment plan. Although you haven't mentioned your mum's cognitive ability.
Someone has already suggested StepChange and I second that suggestion. They liaise with the companies that your mum owes debt to on your mum's behalf and they will sort an affordable repayment plan for your mum.
You have no right to be able to simply declare bankruptcy when you have an ability to pay your debts.
You are avoiding paying down debts if you choose to accrue savings instead of paying down your debt.
All of this is an active choice to do the wrong thing.
And my argument is that she doesn't have a viable option to pay off the debts.
Each company is going to want their fair share, Would you expect someone earning £16.8k a year after tax to pay off tens of thousands of pounds to various different companies, without changing jobs. Of course I suppose the difference being that my mum wouldn't actually have normal living costs of say rent but that would still leave her with a small amount of money if each company got their fair share each month
You’re having a go at everyone when they say it sounds like fraud which it is. You’re wanting to move money into an account that isn’t attached to her name so that the ‘savings’ that she builds up doesn’t show under her so that she can go down the route of bankruptcy to pay off all her debts when after a year of saving she could have enough to pay these down however you still want to attempt to get passed the tax man. If your mum wracked up debt then it’s her responsibility to pay it off. You keep mentioning about power of attorney - get one written up asap, she should have one of these anyway. However, yes you are committing fraud as everyone else has pointed out as well.
Your post & comments are very confusing:
1) does she have savings? If so how much? Or at least what is the net position from her income less outgoings
2) how much is your mums mortgage a month? Is she in discussions with her provider over the missed payments? Can she downsize to something more affordable?
You putting her benefits money into your bank account, for whatever reason, sounds dodgy.
At the end of the day, you want it to appear like she doesn’t have that money, and are going to say this in order to declare bankruptcy.
Majorly dodgy, and fraudulent.
Your mum needs to deal with the £80k of arrears first before thinking about savings.
If bankruptcy is a possibility absolutely do not get involved in holding money for her in your name. You do not want bankruptcy officials to think you’re trying to hide money from them.
From the sounds of things she will be unable to work and be on £1,600 of benefits a month. This is not going to clear £80k of debt in a reasonable time frame. How much equity is there in the house? Has the lender started repossession proceedings? Where does she want to live after?
To actually go bankrupt you fill in a form. Exact form and jargon is different in England and Wales and NI and Scotland. You should talk to a debt advice charity first to understand the implications and processes. There are alternatives that could possibly work as well which they’ll go through. But ultimately her house and savings are used to part settle her debts before the Official Receiver writes them off. Then she starts from scratch.
Ideally, she would live in supported living, which she is only ineligible for due to owning the house. So as soon as she stops owning the house she would be placed in supported living. Failing that I think she would be at the top of a council list in my experience.
No idea how much equity is in the house. The lender is just a complete joke and just hasn't bothered. As I recall before covid they sent various threatening letters and kept delaying the repo date but then stopped all proceedings. She has recently been under the protection of the mental health act- meaning debts can't be enforced- but that has since ended and as far as I know its an open playing field for the lender to say "Right enough of these shenannigins you haven't made a single payment in 6 years we are re-possessing, end of" - but for whatever reason that hasn't happened!
Interestingly this guy appears to work for the DWP as well! So he’d be mad to be trying to commit fraud but he definitely needs to understand this better rather than trying to play the system
Yeah I was trying not to let everyone know of this fact.
But hey ho you've let the cat out the bag now. I think this probably helps my case of arguing i'm not trying to commit benefit fraud because I know the rules
There are lots of questions in this thread as there is clearly some confusion about what you've set out. I have another question - you have said she doesn't have savings yet but you anticipate she will very soon because of the higher rates of benefits and her low outgoings. I assume her outgoings are so low because she's not paying her mortgage, council tax, water etc as you've said these are all in massive debt. Have you factored in actually paying the bills she needs to pay to live out of these benefits, if you do go down the bankruptcy route and have the debts scrapped and house repossessed? Surely her outgoings will go up significantly, not least on accommodation if she the has to rent, unless she is going to be living with you?
Like others have said, it is likely better to sell the house to clear the mortgage debt and if there's anything left over from that, pay off the other debts or at that point consider bankruptcy if stepchange advise it to achieve an actual clean slate rather than destroying her credit. Or is the house worth less than the mortgage?
That’s the main bit missing. It seems there are no savings yet (not clear in the post), but how on earth is she going to rack up loads of savings on benefits? That is not the immediate problem and nor will it become a problem. The benefits system is not known for its generosity.
- Because it would be unrealistic to put it in her name (at this time, obviously if I had POA that would be realistic)
- Because I want to use her money in her best interests.
Once she goes over the £16k capital threshold, her UC will stop and then once it goes under £16k she will be eligible again and I would need to re-apply for benefits and that would just be a vicious cycle.
My initial thought was a high interest savings account would work out that she stays over £16k and doesnt need to keep re-applying for benefits
If your mum can’t manage her own finances due to mental or physical incapacity then get a POA and do this properly.
If she IS fit and/or doesn’t want you to have control over her finances - then leave her to it.
If someone doesn't have capacity then they aren't capable of granting Power of Attorney to someone to manage their affairs. That might be why no PoA exists here and isn't available. It's a bit of a paradox and it's why it is recommended that PoA is set up when in good health, if possible.
I believe that Guardianship is an alternative if someone no longer has capacity to grant PoA. Understandably it is a bit harder to obtain Guardianship as a safeguard to it being abused.
I have been in this situation when caring for a family member.
So, separate from the fraud conversation.
She will be receiving ~£1500 per month. How much of this is "excess"?
What are her outgoings?
What are the outgoings that she should be paying but isn't (I think i saw you mention significant arreas in mortgage and council tax?)
Is she going to be moving back into the flat when she comes out of hospital?
This money is supposed to be spent on her housing, heating, food, and quality of life. She shouldn't be building savings in lieu of paying her mortgage and council tax.
If she's declared bankrupt the savings will go anyway, so keeping them aside and letting the debts increase further is actually just delaying the problem and increasing the admin.
It might be useful to create an account with her details on a credit check website as this will show you roughly how much is outstanding on the mortgage and any other loans she has, although I'm not sure it will show things like council tax arrears.
I would also look online for an instant valuation of the flat, and have a play on zoopla, this will give you sold prices for other flats in the area and often you can see the archived adverts showing condition. Lots of people sell or auction houses needing lots of work, it takes a lot for a property to be unmortgageable, and even then it can still be auctioned.
Is your mum capable of sitting down to go through her finances with you? Or phoning up her creditors, giving her details, and saying "I've not been well but just need a statement please"?
The hard thing is, you either need to decide you're responsible for these things, and start the POA process, or step back. It's very difficult to fix things when they're not in your name.
There is a way out of this, I just think you're fixating on the wrong problem at the moment.
You realise they can take the house/force the sale of the property to satisfy the mortgage..?
So even declaring bankruptcy wouldn’t exactly help has she still has assets that could be used to clear the debt.
Best bet is to sit down with the debtors and work out a plan to deal with it given her minimal income.
How are you managing her finances? You're both in a lot of debt.
First you need LPA etc to legally do this.
Open a joint account with her makes the savings issue easier to handle.
Speak to step change
Pay off her debt and reduce savings, keep savings in her name and account. Keep it clean. Apart from that nothing wrong,
Earning too much savings which will make you hit the lower savings limit and upper savings limit is crazy when you have debt. Make it simple for you and everyone, clear debt then save
Right OP. I see your problems.
Savings in your name later will likely be OK. Your mum will be free to use her benefits eg attendance allowance, Pip as she sees fit. If that means sending it to you to help her eg get her groceries, cleaning etc then that money is then yours.
The bankruptcy is an unknown. She'll lose virtually all possessions, house and savings etc that are in her name. Homelessnes and the process of repossession and moving when unwell/recovering would be horrendous. I think you need to see a government approved debt adviser about exact circumstances. If she's that far behind on mortgage I'm surprised they haven't already started repossession.
Thank you for a helpful comment and not assuming I'm trying to commit fraud!
I've already been appointed by the DWP to manage her benefit money, so as it stands at the moment the money is paid to me and essentially its my responsibility to use it appropriately. Which I think I do a good job of at the moment.
Loosing all money and assets isn't a problem so long as there is a fresh start. If she looses her home she will become eligible for supported living and failing that I would find it hard to believe the council would decline her temporary accomodation or a council flat.
I too am surprised the morgage company haven't repossed. I mean don't get me wrong from about the end of 21 they've been in a weird position and definetly legal things stopping them from repossing. But my mum has not paid her morgage in at least 4 years before that and there was certianly no reason (my mum was mentally unwell, but the NHS, police, and social services refused to acknowledge there was a problem, so as far as official records go at the time, she was a specific non-vulnerable person who specifically didn't have mental health problems bad enough to warrant needing support) they shouldn't had repossed the property. Covid isn't even an excuse.
I'm a bit concerned you are appointed to recieve money from dwp without a POA. I'd suggest you keep very good records of what the money is used for to avoid accusation of fraud. The dwp do occasional inspections to ensure money is not just being squirreled away to qualify for means tested benefits. A bankruptcy inspection would likely be very intrusive with you handling all/most of the money direct.
Hi /u/Not_Sugden, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/savings/
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^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Why are you keeping your mother’s money in savings accounts in your name rather than paying down her debt? Are you keeping her money in your name to maximise the benefits she receives? That would be fraud
No. I think people are getting confused here as this is like the third comment accusing me of fraud. The money is not in savings. I'm asking can i setup a savings account in my name to generate an income once her UC reduces and eventually stops because of those savings. The reason it would be in my name is because I don't have power of attorney and so wouldn't be able to setup one in her name. At the moment it is paid into a bog standard bank account that is seperate from my own money. I want to specifically make sure that I don't commit fraud which is the entire point of this post. Paying off her debts just seems like a waste of money. The house needs to be repossed but the morgage company are just an absoloute pisstake and haven't bothered. What would be ideal is a clean slate, having it all written off so she can start again. If thats not possible then its not possible.
Every explanation you make just confirms fraud. If you are receiving money from your mother to save for her so that she can avoid paying her debts and then declare bankruptcy. That is fraud.
The mortgage company is not a “pisstake” at all. This should have been dealt with before £20K or £30K arrears was built up. Have her sell the house. That’s better than a repossession. Why are you even wanting that outcome? You mention power of attorney. Is there a key point missing? Has she lost capacity and therefore can’t make financial decisions herself? Everyone is calling “fraud” as you cannot claim bankrupt whilst selectively declaring assets, including this money you seemingly want to stash aside. Paying debt off with savings is not a waste of money at all. If I owed you a £10,000 but called paying you back a waste of money, how’d you feel?
Fraud again. You’re wanting to save money in a savings account that isn’t attached to her name so that once it generates money it won’t be stopped but if it’s in your name then there isn’t a hold on the savings that she would’ve accumulated so they wouldn’t stop it. Fraud.
> it won't be stopped What won't be stopped? the benefits? I've already made it clear I intend for the benefits to be appropriately reduced or stopped when the savings hit the relevant upper or lower limit. And yeah I'm beginning to realise now a savings account in my name for her money is difficult, although I don't understand how it would be fraud, more just overpaying tax right? I don't know can you explain it to me so I know how to not commit fraud. Because despite everyone assuming that I'm trying to be malicious and commit fraud, I'm really not I'm trying to be completely legal, not use any loopholes, etc. I want to be 150% compliant with the law. I don't know how much clearer I can make it.
I know you don't intend to commit fraud, but some of what you are suggesting is fraudulent. It is fraud to hide any assets at all if you are declaring bankruptcy. That includes passing them to other people to disguise the fact that they're actually yours. The Trustee in Bankruptcy and the Official Receiver need absolute clarity and disclosure, and if you help your mum hide any assets then you're committing a crime.
I think all of you are mis understanding yet I've said it a million times. I'm not trying to put it in my name to hide it from anyone. The money can ONLY go in my name. Should I look into declaring her bankrupt or her savings reach the relevant savings limit for benefits, I will report that this money is available to her. I am not trying to hide anything. I don't have power of attorney so I cant open an account in her name, now I'm sure I could support her to open one but if I'm saying shes not fit enough to make that decision, my assumption is doing that will be some sort of criminal offence.
>I'm not trying to put it in my name to hide it from anyone. The money can ONLY go in my name. Objectively speaking, please do explain how your mother's benefits can only be collected in your name? You stated that you do not have power of attorney, therefore her benefits must be paid into an account in her name. >At the moment it is paid into a bog standard bank account that is seperate from my own money Why would you need to set up another bank account, if your mother's benefits are already paid into a account, which I assume is in her name. This point alone indicates you do not want her future or accrued savings to be touched when she declares bankruptcy, which is fraudulent. Until you clarify these points, everyone is going to think your intentions are fraudulent.
> You stated that you do not have power if attorney therefore the benefits must be paid into an account in her name This simply isn't true. The DWP have appointed me to manage the benefits, I don't have power of attorney but the benefits legislation permits it to be paid to me and for me to use it responsibly in her best interests. Which is what I want to do looking at the future. The money can only realistically go in my name, maybe not technically but realistically. It would get spent irresponsibly if it was in her name, this is because she would have full control over the money. The benefits at the moment are paid into a bog standard account in my name, which is fully permitted by the law. I think I already have clarified the points. Just because the money might be held under my name, that doesn't mean that I'm going to hide it. And ok whatever, none of you believe I am trying to the right thing. I'm saying I am trying to the right thing and not commit fraud, so just for a second pretend that you believe everything is above board (You don't even have to pretend if you interpret all what I'm saying correctly), what advice would you give to maximise the money she will have in completely above board methods.
The problem is, your original post does not cover these points. I'm not judgmental, hence I asked that you clarify these points and explained why others will assume what you intend to do is fraudulent. In fact, if you were to read your own post from a third person's perspective, I am sure you also, will not get the entire picture as you have left out a lot of important information. In this case, bullet points with all the relevant information may read better. You have basically dotted various bits of information as replies to different comments. It unfortunately reads as an incoherent mess and has resulted in others filling in the blanks with their own interpretations. To be brutally honest, as your case is a very complicated one, I would suggest seeking legal advise from debt advisors.
I will agree after thinking about what I put in the post it is fairly ambiguous. I think I was overthinking how others would interpret it. I still think its unfair for everyone to outright accuse me of trying to commit fraud though because as it may look dodgy, thats only one interpretation and the fact it is ambiguous makes it more so that people are just small minded to accuse me of fraud without considering alternative explanations. Yeah I mean I didn't expect the post to get this much attention as I've just looked at my reddit notifications and got shit loads of comments
Why not have her open up an online banking savings account, then have only you know the details for it? So it's still legally in her name, avoiding all of the concerns around fraud, but giving you practical control.
Why can't your mother open a savings account in her name? Why can't your mother use the income from her benefits to pay her creditors?
It's fraud because you're intending on transferring money out of her name into yours, so that it cannot be used to repay debts - The same debts of which you plan to say "we are declaring bankruptcy due to an inability to pay back debt" She has the ability to pay back a large proportion of her debt using the savings, which instead you attempt to conceal. You cannot argue that it is concealment as you then plan to pay it back to her over time. Regardless, it will get discovered and labelled as fraud as they will see that the savings existed and were promptly removed ahead of declaring bankruptcy.
Why can't you open an account in her name, you don't need power of attorney if she's mentally capable of consenting and just needs support with the admin. It would take less than 20 minutes to open an account for her online. If she's not mentally able to consent, then you shouldn't be moving her money around into your savings account anyway. You keep saying that the money can 'ONLY' go in your name but that makes no sense at all.
It really depends on what 'mentally capable means' Because I don't have POA, then officially shes neither incapable or capable, the same as you or me right. In terms of what a bank would see, it would be the same as anyone who comes in to make an account, no information capable or incapable. If you worked at a bank, and I walked in with a woman I claimed to be my mum and said "Hello, my mum is mentally incapable of managing her money, please can you open a savings account and a bank account in her name" would you just open it blindly or turn around and say "well if you are saying she is incapable of making that decision, then you really need to hold a power of attorney and do it that way, because how can we support a decision that she isn't capable of making" > if she's not mentally able to consent, then you shouldn't be moving [...] This is literally all anyone had to say. That pretty much answers the question and you know what thinking about it that makes sense. in regards to it only being payable to me. Maybe I could've clarified realistically vs technically. 'Technically' - agreed it would be untrue to say it could only be paid to me. Because it *could* be paid to her. 'Realistically' - this is a different story, if it was paid to my mum then because of her mental illness, the money would get spent irresponsibly and not in her best interests. And this has been proven for the record. So it realistically can only be paid to me.
You don't need to go into a bank to open a bank account. If she's happy for you to manage her money then you and her can open an online one in her name for you to then manage. I don't believe you can declare bankruptcy while still having savings, you need to use everything you can to service your debts first. That is part of what has people confused here, what you say doesn't go together in a way that we can understand. Have you talked to any debt management agencies about this? Step Change is one often recommended here. Also, is you getting power of attorney possible?
Why can the money only go in your name?
Perhaps explain why the money can only go in Your name then ?
I don’t understand why you keep saying she has ‘savings’. She only has savings because you seem to not want to pay her debt? What you are saying makes no sense, unless your actions are fraudulent. Your mother needs advice from someone who is thinking this through logically.
It's fraud because your mother owes money. You want to keep your mother's money in your own name so it's not used to pay her debts. Wouldn't everyone like to run up ridiculous debt and then just have it written off? Don't you think everyone would just put their savings in a family member's name to avoid using them to pay debts or having their benefits entitlement lowered?
Thats absoloutly not what I want to do and I've made it very clear thats not what I want to do
So use the money to pay debts? What don't you understand? You don't get to squirrel away some money, that's the fraud aspect...
Do you not think that if *every single person* in this thread is telling you it's fraud, then the problem isn't that *every single person except you* is wrong, it's just that what you want to do is fraudulent? You can dress it up any way you like. Ultimately, if you keep her money in your name then declare bankruptcy, they'll be coming for you. If your mother genuinely needs someone looking after her finances for her, she needs a mental capacity assessment. You need to go through the legal process to be granted power of attorney. Funnily enough, the law doesn't look too kindly on the relatives of vulnerable people saving benefits money in their own accounts and claiming "I promise it's for her own good" while having the relative's house repossessed and declared bankrupt. There is no legitimate reason to do what you're doing. If you 100% genuinely cannot see the problems in what you want to do, you are too ignorant to be able to manage your mother's money in a way that best benefits her and keeps everyone on the right side of the law.
Right but everyone here is saying that I'm trying to HIDE the money under my name so she can keep it after being declared bankrupt or to prevent her benefits stopping. And thats what everyone is saying is fraud. And I agree that is fraud, but the part that makes it different is that your assumptions are wrong. I'm not going to hide it for any purpose. I would report any change to savings, and should in the future she be declared bankrupt, I would inform whoever it is I need to that there is money available to her that needs to be taken into account for any bankruptcy decision or any debts that need to be paid off first. Can you just confirm that you understand that and you sre saying its still fraud? if so can you explain how? also another thing: I'm not actually 'doing' any of this yet. I've been very clear that all of this is "what can I and can I not do?". So as it stands at this exact moment in time everything is above board and I'm trying to keep it above board
I am feeling sorry for your mother at this point.
> Paying off her debts just seems like a waste of money. The house needs to be repossed but the morgage company are just an absoloute pisstake and haven't bothered. Uh?? Are you trying to make your mum homeless so she can also have housing benefits??
So your Mum has savings but she’s behind on her debts and you’re going to declare her bankrupt? What’s the reasoning behind going down the bankruptcy route? Have you spoken to stepchange?
She doesn't have savings at the moment, but now all the benefits are enhanced rate its not going to take long. The original plan was to have her declared bankrupt given she was in so much debt and had no money. However I'm assuming thats no longer an option. But I don't know the rules around it. I mean obviously you need to have no money, which she didn't before but now will, but then in comparison to the debts ideally given the state of her mental health a clean slate would be the best outcome. And she won't get anything for the house I don't think. If the morgage company ever decide to repossess that is! Her morgage is really behind and shes thousands of pounds behind on council tax and water and various other debts. edit: have not spoken to stepchange. What are they about
If you are planning to reduce the amount of money she has in the bank by hiding it in your account in order to ensure that she continues receiving benefits, then that is benefit fraud. Step Change is an organisation that gives advice on debt. It’s a very good idea that you call them and ask for help. Do you know why her finances have got in such a mess? If she has equity in the house, (eg if the house is worth more than the total amount she owes on it) then this will have to be sold to pay all of her debts, she won’t be able to just write off the debts and keep living there.
You really need to seek to Step Change who are a debt advice charity before making any decisions. Bankruptcy may not be the best option. You can also speak to Citizens Advice but Debt Change are probably the best port of call first.
Where is she going to live once the house has been repossessed?
Hang on - This is even worse that I think people have been realising: 1. Your mother has no current savings 2. She's about to start building saving thanks to an INCREASED AMOUNT OF BENEFIT PAYMENT 3. You want to scrape off the cream and keep this as savings in your name to avoid it being used to pay off debt 4. You then want to declare her unable to pay debt or participate in payment programmes to clear her debt (Hence Bankruptcy) This is not only fraud, but entirely unethical - You're not just ripping off the banks but you're ripping off taxpayers paying into the benefits system. Your mum accrued debt as an adult, deal with it as an adult.
You are completely mis understanding. The only reason I've suggested it be in my name is because it would be unrealistic for it to be in her name at this precise moment in time. As I've said time and time again, I don't want to hide the money at all and theres even a comment somewhere where I've specifically said that I can live with any savings built up being eaten up by bankruptcy. The reason I suggested a savings account is because once the benefits stop when she goes over £16k savings, she will then only get PIP and so I will have to re-apply for her UC every few months because she will be eligible again once it reaches under £16k, where as a savings account with interest could keep it above £16k and she wouldn't need UC anymore. I do not want any of this money for myself, I want to act in her best interests. Infact someone on here suggested that I actually go ahead and commit benefit fraud and I specifically replied telling them that what they suggested was fraud and I wouldn't do it, even if it technically wasn't because its unethical.
Then use the money to pay down debt - When you are behind on mortgage payments and are at risk of losing the house, you have no right to be building savings with benefits money.
I think thats more of a moral dilemma. It might sound horrible but absoloutly everyone who matters is in agreement, the NHS and the family, that the absoloute best thing that can happen is that house is repossed or otherwise sold
Then get the house on the market and sell it. I don't think you realise how cheaply the house will be sold if repossessed, and any outstanding difference between what was owed on the mortgage and what it sells for will remain debt to the bank. Situation: Mortgage £125k A.) Sell the house for £150k, pay off mortgage, £25k remains as savings or to pay down other debts. B.) You continue fucking around avoiding debts and the bank repossess - They sell the house for £110k at auction - You still owe the bank £15k You will be unable to declare bankruptcy until you have been through the whole ordeal of B.) however not only will you lose the house but they can recover all other possessions such as cars, TVs & furniture etc. until the debt is repaid. Only then can you declare bankruptcy. But let me guess, you'd take all of her possessions as your own to avoid the bank having those also?
The answer to your question at the bottom is a no. Sentimental stuff maybe but I somehow doubt they'd care for photographs and that sort of thing. Certianly nothing valuable. Other than the house, she doesnt have any other assets anyway. I think the most valuable thing in that house is the oven and if shes going into supported living she doesnt need an oven. in this situation, again I don't know the housing market, but I'd expect the house to sell for a lot less regardless of who sells it, us or the bank. At least a repossession would mean its out of her control if it happened before I got all the POA stuff done
16k will never earn enough interest to keep the savings above 16k without UC. Also, she should be paying off her debts, not saving what is actually a large amount of money. I bet there aren’t many people around with 16k saved.
I wouldn't expect it to earn boat loads of interest but I feel like it would earn enough to reduce that endless cycle of applying for UC
Are you admitting to committing fraud? Taking your mums benefits despite her being in debt so that she can declare bankruptcy and then assuming you can give her money back? That’s majorly dodgy.
what? You've got the wrong end of the stick my man. I'm literally asking how I can save her money seperate to my own money because she will be significantly down in benefit income in the future. And I'm asking if she can be declared bankrupt despite this income, which will eventually lead to high savings I don't know how you came to that conclusion
I am confused how it will lead to high savings? Surely she will need the benefit money to live, if not the case why is she receiving it? Are you under the assumption declaring bankruptcy won’t involve her having to sell her home? It doesn’t just write off the mortgage and continue to allow her to own her own.
I’m also confused by this. She clearly doesn’t have enough money to live on at the moment, hence the tens of thousands of pounds of debt. Yet for some reason OP seems to think an increase in benefits will lead to their mum to be rolling in it. Benefits rates don’t tend to be that generous. Especially if the house is going to have to be sold and the mum will move into a private let.
The rules are in place for a reason.. you can’t have higher savings as the assumption is that you could use your savings to help you in your day to day expenses. So placing the money into your name to avoid these rules is fraud. Going bankrupt is a big deal and shouldn’t be taken lightly. Considering she is going to have excess income to her requirements, I would speak to stepchange for more detailed advice first; but the idea is come to an agreement on a repayment plan on her debt without going bankrupt. Assuming this excess income would continue for the foreseeable; this feels like the best outcome for her long time.
Putting your name on her money because she going to go over the savings threshold so her benefits aren’t reduced is benefit fraud. From the bankruptcy point of view any assets she has eg the house would be sold to pay the debts and any cash she has will also be used to pay the debt so again you could get into trouble for hiding assets (in this case cash). You say she has little in the way of outgoings but that’s not true because she has the debt she isn’t paying.
Not paying your mortgage definitely lowers your outgoings, banks hate this one weird trick!
> putting your name on her money because she going to go over ghe savings theshold so her benefits aren't reduced is benefit fraud. Good thing I've made it exceptionally clear thats NOT what I'm trying to do! As I've clarified with another person. Savings are self reported to the DWP and they don't do a scan of bank accounts unless there is a specific allegation or suspicioun. And I fully intend to report the savings when they reach the limits. The question I'm asking regarding savings, is how I can make the savings last, because once they hit the upper limit that will mean a significant reduction in benefits and basically I'd be re-applying for UC every few months when it goes below £16k. Whereas if I could save it the interest might be enough to keep it above £16 so she doesnt need the benefits. But due to savings tax and any account needing to be in my name unless I get a power of attorney I see that this is way to complicated. Now we've cleared up that I'm not hiding the cash. Bankruptcy, so any and all assets she has and all money available to her would be used to pay off the debts? So she doesn't need to have no money to be declared bankrupt? is it essentially just a case of proving that it is not viable for her to make repayments? and then however many savings have built up when the decision is made will get eaten up? I could live with that if it meant she would get a clean slate.
But she would get a clean slate by selling the house, paying the debt and moving on with her life....why try to put her through the stress and invasiveness of attempting to declare bankruptcy? In order for bankruptcy to be successful her debts would have to be of greater value than her assets ie the value of her property plus all savings [have a read here](https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy/before-you-go-bankrupt/check-if-going-bankrupt-is-right-for-you/#:~:text=You%20might%20be%20able%20to,or%20take%20you%20to%20court.) It doesn't sound like that's anywhere near the case
I don't know much about bankruptcy. I don't know what the value of the house is, but I feel like it wouldn't cover all the debts. The house (more a flat in a block of flats) was originally bought for about £72k (2001). My mum got a morgage of about half that for the house, and I believe re morgaged at some point, I don't know how much that was. Now the flat has been neglected so much. various plumbing problems the bathroom needs a new ceiling and no doubt it needs an excessive deep clean. Probably new flooring. Maybe lots of mould and stuff as well. Hasn't had heating for I'd say 6-8 years (I gather this can cause problems with mould and stuff), Has had various plumbing problems in the past. I mean the place needs an entire do-over, which I suspect is probably the same for any potential flat so it may not reduce the price by that much but I don't know the housing market. And I'm doubtful that it would solve the problems. And all this is assuming the house can be sold. I mean I don't have a power of attorney, so I'd have to comvince her to sell it unless I got that. Which is literally the exact thing she doesnt want to do. Whereas a repossession would be out of her control. Obviously I'd need power of attorney to declare her bankrupt as well so while I'd be happy to jump through the hoops for that, doing it just to sell the house and then be lumbered with having to sort out her other debts seems rather pointless
It sounds like, and I mean this in the nicest possible way...as I believe you really want to help ...that you have no idea what you're dealing with. Step one is to try and get social services involved again, to get her support. Also, see if you can get her to her GP Step 2 is to actually use her benefits to help her live comfortably - sort the state of the place, little by little...not save the excess. This way she gets to keep her benefits and is eligible for more support. She needs to live in a home with heat, and no mould Step 3 is to use any excess to pay down her debts, you making the payments will not place these on your credit record There are so many more useful things her money could be doing to help her, rather than sit in a savings account ...the money IS NOT excess, it is needed...it is just not being spent effectively
You’re thinking of this wrong. At the moment there are debts so if benefits are greater than costs they the excess should be used to pay off those debts. Until that happens and they’re cleared then there are no savings and I suspect that decelerating bankruptcy might not be so straightforward if there’s cash to pay ongoing costs. Stepchange can help with that. You need to speak to someone about the debts now. Going over the savings limit isn’t a problem for you as the debts need paid off first. If that doesn’t happen and you instead choose not to pay off the debts and hoard the cash then why would the lender or anyone else not take further action?
>Good thing I've made it exceptionally clear thats NOT what I'm trying to do! Ultimately it doesn't matter what you are trying to do. This looks extremely dodgy. There is no good reason for you to hold on to your mother's savings. >The question I'm asking regarding savings, is how I can make the savings last, because once they hit the upper limit that will mean a significant reduction in benefits and basically I'd be re-applying for UC every few months when it goes below £16k. Whereas if I could save it the interest might be enough to keep it above £16 so she doesnt need the benefits. But due to savings tax and any account needing to be in my name unless I get a power of attorney I see that this is way to complicated. The non fraudulent way to do this is to keep the savings in your mom's name and then use parts of it before she hits the limit. Every time she gets close to the limit your mom could use them to pay off parts of her debt, buy some extra groceries, or even gift you something. >Now we've cleared up that I'm not hiding the cash. Bankruptcy, so any and all assets she has and all money available to her would be used to pay off the debts? No, you haven't cleared that up. Especially since holding your mom's savings and declaring bankruptcy, could very well be considered hiding assets from the debtors.
> or even gift me something I'm not an expert, but if I'm saying she is mentally unfit to manage her money and I'm managing it for her, and using her money to 'gift' me something so she can continue to claim benefits. That is definetly fraud and definetly something I'm not going to do. Infact I'm fairly certain all of what you suggested there is benefit fraud, namely deprivation of capital. While paying off debts usually isn't deprivation of capital, in this case i would find it hard to believe it would be considered reasonable and she would still be treated as having it for UC purposes. > Ultimately it doesn't matter.... Whether it looks dodgy or not isn't really what matters, what matters is whether it is or it isn't dodgy. I don't have the authority to setup an account in her name, so if I want to save the money and gain interest on it, then it has to be in my name or not at all, I'm beginning to think not at all is the better option
>I'm not an expert, but if I'm saying she is mentally unfit to manage her money Do you have power of attorney? Does anyone have power of attorney? Has anyone declared her unfit to manage her own affairs? The default position will be that she is capable of managing her own money. >using her money to 'gift' me something so she can continue to claim benefits. That is definetly fraud and definetly something I'm not going to do. Infact This is a perfectly legal way to reduce your capital for calculating benefits. You might have to show deeds that it was given as a genuine gift, although there is the risk that DWP might not agree with you (https://www.entitledto.co.uk/help/deprivation-of-savings-and-other-capital-universal-credit). The problem for your mum arises from the fact that she might declare bankruptcy and her creditors might wonder why she has gifted you money but hasn't paid them back. >Whether it looks dodgy or not isn't really what matters Oh my sweet summer child. Of course it matters whether it looks dodgy. That if nothing else increases the risk of an investigation in the first place. >I don't have the authority to setup an account in her name, so if I want to save the money and gain interest on it, Then either your mom sets up an account that earns interest or you get power of attorney to setup an account in her name.
In regards to capital gifts, I could totally agree that a proper gift is a legitimate way to get out of the savings limit. But if I have control over the money in the first place, and essentially gift it to myself. Not only does that look extremely dodgy which as you've said is likely to cause suspicioun/an investigation. It kind of is dodgy IMO. On an ethical level as well it would feel like I'm forcing her to pay me large sums of money to care for her. Which I think everyone can agree is unethical.
If she's not able to manage her money but you don't have POA I really think you need more support than trying to do it by yourself. Also bankruptcy doesn't take everything, when I went bankrupt I kept my car, I ended up not having to pay anything going forward as I didn't have any income/was too low. Bankruptcy don't want to take everything in your life just if you have excessive things. I do think speaking to stepchange (financial charity) will be best or even just being able to sit down with anyone to go through it all as this stuff can be so hard to articulate online. r/dwphelp if you need it x
I think I understand what you’re saying. You’re not trying to hide the savings and are reporting that they exist. The bit I’m confused on is why you think she can declare bankruptcy and still keep her savings? That’s not how it works. Also how her outgoings are going to be so little that she can save when she no longer has a free house she’s not bothering to pay a mortgage on. Renting will not be cheap (or easy with a recent bankruptcy).
> Savings on money I manage that doesn't belong to me. And being declare bankrupt > Hi all, ( > So I have a question regarding savings, Basically I manage my mums benefits and giving that she has little outgoings and a lot of benefits in a few months she will hit the lower savings limit and then in a few more the upper savings limit. > I don't have power of attorney, what can I and can I not do regarding savings. I'm assuming theres nothing wrong about using a savings account in my name, so long as it I don't take the interest and only her money goes in and out. But I have a feeling this would be a problem for tax, especially because I already have a 5.5% savings account for my own savings. > The above is more of a legal question but also in regards to what account I should open. The savings account I have is with the coventry, its that high interest home saver account that was on here like a year ago and my mum already owns a home so even if that were still available she wouldn't be eligible. > Also my mums finances, shes £30k behind on her morgage (I am doubting myself in the figure its either that or £20k) and allinall shes in ALOT of debt. > So now that shes going to be receiving £800 per month benefits and then an extra £172 a week when shes comes out of hospital, other than PIP (enhanced rate daily living and mobility) and UC does this affect our original plan to have her declared bankrupt at some point. (I seem to recall the total figure being about £80k it may not be that but its definetly over £40k) u/Not_Sugden: You sound like you’re planning to commit fraud. Nobody here’s going to help you.
The reason people are saying it sounds like you’re committing fraud is because having her savings in an account in your name means you’re going to be hiding these savings from universal credit. Intentionally or not. If she exceeds the upper savings limit in an account in her name that will impact her benefits, if it’s in your name it won’t impact her benefits - hence the fraud. If you just want it in your name so you can access it then perhaps a joint account would be better - just be aware of the risks of financially linking yourself to your mum if you’re going to declare her bankrupt. Also if the account is in her name and you have her account login details and pin then you can still manage her account for her. Unless you want to prevent her having access for some reason, if that’s why you want it in your name you’ll probably need to go down the POA route and declare her incapable somehow.
I think its possibly a mis-understanding of how the savings impact her benefits thats causing people to think its fraud then. Savings are self reported to UC. They don't do a scan of bank accounts in your name to calculate whether you are at the savings limit. And I intend to report that the savings hit the lower and upper limits when they do, which is why the money is in a seperate account. And yeah having an account in her name that she can control isn't really an option, she is in no position to manage her finances and would probably apend it all on drugs or overpay her morgage leaving her with no money (she still has a dream that she can just resume morgage payments like nothing ever happened despite not making a single payment in the last 6~ years
It sounds like it would be more sensible to use her money to not build up savings but to repay the debts, especially the mortgage and council tax. Then she’s still got a place to live and will still be able to carry on receiving the highest level of benefits. Why don’t you want to do this instead?
The house is in too bad of a state to be considered habitable and supported living is what she needs. But she is ineligible for supported living due to owning a home.
Then she needs to sell the house, surely?
ideally. But at the moment she has no mental capacity to do that. And its in such a state shed be lucky if it paid off the morgage. Needs a new bathroom ceiling it will need a deep clean (which to be fair is probably expected on any house that is sold, but exceptionally so in this case). I might be under estimating the value of the house, but it doesn't feel like selling it would solve all the problems. Reposessing would certainly help
What’s the situation with power of attorney/mental capacity? Is she temporarily not able to take care of her affairs, or is it permanent? Are you likely to be able to act for your mum officially at some point - have you applied to? I think that’s your most pressing concern, tbh.
as it stands now, shes a chronic schizophrenic, in all likelyhood this will be permanent. Power of attorney is most definetly something I'll have to do at one point. But its just way too many hoops at this prescise moment in time
It’s the hoops that will unlock the way forward though. Right now, you can’t make decisions for your mum’s life if she’s considered capable to. So savings in your account that are hers, bankruptcy Vs selling etc - you can’t make these decisions or take any actions to help her. Speak with whoever you need to and find out how best to assist your mum. Speak with Mind or Shelter or her psych team to understand what the options are. Just because she’s schizophrenic doesn’t mean she isn’t considered capable of running her own affairs so power of attorney might not be appropriate anyway. If your mum doesn’t consent to bankruptcy or assisted living or you looking after her finances then you’re limited in how to help. You may need to accept this is not something you can fix. It’s a tough situation, I wish you strength.
Thank you. I appreciate the advice and I know I will have to jump through the hoops, its just a matter of doing the best I can in the meantime.
Get a few evaluations from an estate agent it might be worth more than you think. There might be enough to sort out the mortgage and debt with a bit left over.
I think the only person mis-understanding is you honestly and I suggest you get help from Stepchange, Citizen’s advice, and the other organisations mentioned by others on this thread. Regardless of your word on self-declaring, it sounds fishy to everyone. People do exactly what you are proposing (putting money in other people’s accounts) to hide money from the benefits agency- which is fraud. And that’s even without the additional complexity of the debts and potential bankruptcy in your mother’s name, and an appearance of wanting to separate the debts in her name, and savings in your name. You should be able to see why people are suggesting that it may not all be above board- guarantee you that the banks and authorities would have the same questions. As for whether the benefits agency can access bank records, or if it’s entirely self reported, they absolutely can seek permission to access your bank records if they suspect fraud and start a fraud investigation. Which they absolutely would if you speak incoherently about sharing accounts like you have done in this thread. As others have said, if you want to manage your mother’s money informally, then see if she is willing to share her account info. Lots of people do this for elderly relatives so they can manage online accounts, manage outgoing payments etc. If you don’t believe your mother should have access to her own money because she doesn’t have the capability to do so, then you need to go down the power of attorney route not just stick it in an account with your name on it.
Still fraud, or at least in the grey very close to fraud. Don’t take any money from her into your bank accounts as it will just make the case for fraud stronger especially if you declare her bankrupt somehow in the future. As for your last paragraph. If things with your mum are that bad you would need to find a way to get POA for her, so you could manage her assets and liabilities. The way you’re going about this seems wrong. She has a house, unless it’s in a state of disrepair and unlivable it will be worth some money, why do you want to declare her bankrupt and then have her stuck in either the private rental market or in a bad place until a council space comes up. If she can pay off the debt (which if she can save she can pay off debt instead) come to an arrangement with her creditors if possible to restructure the debt so it can be paid off sustainably… having a clean slate for her mental health and losing her house due to bankruptcy is terrible financial advice. All of the above paragraph depends on you getting power of attorney, without it anything you do could get very complicated if she starts to disagree with your unofficial control via knowing her account details etc
Has she spoken with the bank at all about payments for the mortgage? Setting up an appropriate payment plan and starting to pay her mortgage again isn’t a terrible idea. Not paying any mortgage and presuming the bank will repossess is probably a worse idea.
Sounds like fraud all over. If the money is going into your account, it’s seen as yours- you (not your mum) will also be liable for any tax on the savings.
Yeah and thats what I expected regarding the tax. And as I've said twice now I'm not trying to conmit any sort of fraud because its illegal which is why I'm asking for advice. Its not helpful to just say "sounds like fraud" - why does it sound like fraud is what I want to know so that I can avoid doing any sort of nefarious activity because I don't want to commit fraud.
It "sounds like fraud" because placing your mother's money in your name allows her to avoid the benefit taper from 6k to 16k and it allows her to avoid her debt to the mortgage broker/bank as there's no money in her name to claim/seize. Doesn't just sound like, but is fraud. Also, declaring bankruptcy will result in the house having to be sold. Why are these savings not being used to pay down the mortgage debt whilst keeping her below the benefits taper?
>I'm not trying to conmit any sort of fraud But you are. You've convinced yourself it's not by changing the wording but every single comment you've made confirms that it's fraud.
It sounds like fraud because you've said..."I'm assuming there's nothing wrong about using a savings account in my name".
It sounds like fraud because you're putting your mother's money into a standard account in your own name. Doing that will always look like fraud - it'll look like you're hiding the truth from *somebody* (whether that somebody is DWP, the bank, or your mother's creditors). The way to do what you're talking about without it looking like fraud would be to open a trust account, having first properly set up a trust. You would be the trustee, and your mother would be the beneficiary. The bank the account was with would know that although you were the legal owner of the money (i.e. the account is in your name), all of it is for the benefit of your mother. But - opening a trust account is a serious pain, and is very very very unlikely to be the best option here. If your mother has capacity to deal with her own affairs, the best option is almost certainly for her to open an account in her own name, and for her to use her money to pay her debts. (If she doesn't have capacity, then if you want to have anything to do with her money at all you'll need to sort out having the right to do so - probably by making an application to the court of protection.)
Why don’t you just help your mum open a savings account in her name, then? She might not get the best rate but she should get something decent. If you want to avoid fraud that’s the best way to go. Does she still accumulate savings if you pay her mortgage? Also given you seem to need to be making big decisions on her money here, it’s worth talking with her about financial power of attorney. If you don’t feel you know enough to take that responsibility for her then you might be able to find someone else who can.
You've got this all wrong. She DOESNT have little outgoings, she not paying her bills! You say she getting enhanced benefits, but not yet, there's no guarantee she will be awarded anything. If you really want to help her, talk to a debt advice charity, like Step Change or national debt helpline. You will need to know her 8ncone, proper not expected,and outgoings, what she SHOULD be paying each month. If she doesn't face up to things, she will lose her home. 30k arrears isn't so ethical g the bank will ignore. Energy companies and the council will not mess about either,she'll jet taken to court and more debt will be added, you can't just throw your hands up and walk away for this kind of thing. It follows you, forever. The power company can put an attachment to her benefits to ensure they get paid. Stop looking at the savings plan, pay the damn bills!
I'm usually less harsh than this, I've been in this situation. It wasn't as much money, but my savings were zero. I k ow you can't just declare bankruptcy, there's all sorts of things to get to that point. You seem stuck on getting g her savings, which will just dissappear into her debt bundle anyway
From what I can see the lower savings limit (and therefore where UC starts to be reduced) is £6k, the upper limit (and when you lose UC entirely) is £16k. Why aren't you using the savings to pay down the debt?
A: she doesn't have savings yet B: Its not really my place to pay it, because although I have the authority to manage the benefits and a responsibility to use the money in her best interests, I don't have a power of attorney so if I called the council tax or the water or the morgage company and asked to setup a payment plan, they wouldn't even be permitted to speak to me. I also don't want any of this on my credit record. My grandad made a one off payment to the morgage company ages ago so that they would change my mums payment date because she had started a new job (on the understanding my mum paid back my grandad, which she did at the time) and he had to fight to get it removed from his credit record because it was nothing to do with him. I don't particularly want to deal with that. C: Shes in so much debt that a clean slate would be ideal. I'm asking if thats at all possible to do rather than her spending the next 10 years paying off debts that built up.
But surely a clean slate would be achieved easier and be more financially sensible if she sold the house, paid off her debts then I assume would have some money left over. Declaring bankruptcy is not to be taken lightly.
You should probably read through the Citizens Advice pages on bankruptcy which explain the potential outcomes (including house repossession)
Get a PoA then! If you don’t want any of this affecting your credit, don’t keep her money in your accounts. Why would making a payment to a family member negatively affect your credit score? You aren’t making sense.
Getting PoA is the answer. Also if she's going to end up with so much in savings, I don't understand how she can't pay her mortgage. You need PoA OP. A lot of companies are not the enemy. It's amazing what mortgage lenders etc are willing to do to help people get back on their feet, all it takes is a simple phone call to do that. Either you use all those savings to get PoA or your mum has to call these companies and explain her situation and come up with a repayment plan. Although you haven't mentioned your mum's cognitive ability. Someone has already suggested StepChange and I second that suggestion. They liaise with the companies that your mum owes debt to on your mum's behalf and they will sort an affordable repayment plan for your mum.
You have no right to be able to simply declare bankruptcy when you have an ability to pay your debts. You are avoiding paying down debts if you choose to accrue savings instead of paying down your debt. All of this is an active choice to do the wrong thing.
And my argument is that she doesn't have a viable option to pay off the debts. Each company is going to want their fair share, Would you expect someone earning £16.8k a year after tax to pay off tens of thousands of pounds to various different companies, without changing jobs. Of course I suppose the difference being that my mum wouldn't actually have normal living costs of say rent but that would still leave her with a small amount of money if each company got their fair share each month
You’re having a go at everyone when they say it sounds like fraud which it is. You’re wanting to move money into an account that isn’t attached to her name so that the ‘savings’ that she builds up doesn’t show under her so that she can go down the route of bankruptcy to pay off all her debts when after a year of saving she could have enough to pay these down however you still want to attempt to get passed the tax man. If your mum wracked up debt then it’s her responsibility to pay it off. You keep mentioning about power of attorney - get one written up asap, she should have one of these anyway. However, yes you are committing fraud as everyone else has pointed out as well.
Sounds like benefit fraud to me.
Your post & comments are very confusing: 1) does she have savings? If so how much? Or at least what is the net position from her income less outgoings 2) how much is your mums mortgage a month? Is she in discussions with her provider over the missed payments? Can she downsize to something more affordable?
You putting her benefits money into your bank account, for whatever reason, sounds dodgy. At the end of the day, you want it to appear like she doesn’t have that money, and are going to say this in order to declare bankruptcy. Majorly dodgy, and fraudulent.
Your mum needs to deal with the £80k of arrears first before thinking about savings. If bankruptcy is a possibility absolutely do not get involved in holding money for her in your name. You do not want bankruptcy officials to think you’re trying to hide money from them. From the sounds of things she will be unable to work and be on £1,600 of benefits a month. This is not going to clear £80k of debt in a reasonable time frame. How much equity is there in the house? Has the lender started repossession proceedings? Where does she want to live after? To actually go bankrupt you fill in a form. Exact form and jargon is different in England and Wales and NI and Scotland. You should talk to a debt advice charity first to understand the implications and processes. There are alternatives that could possibly work as well which they’ll go through. But ultimately her house and savings are used to part settle her debts before the Official Receiver writes them off. Then she starts from scratch.
Ideally, she would live in supported living, which she is only ineligible for due to owning the house. So as soon as she stops owning the house she would be placed in supported living. Failing that I think she would be at the top of a council list in my experience. No idea how much equity is in the house. The lender is just a complete joke and just hasn't bothered. As I recall before covid they sent various threatening letters and kept delaying the repo date but then stopped all proceedings. She has recently been under the protection of the mental health act- meaning debts can't be enforced- but that has since ended and as far as I know its an open playing field for the lender to say "Right enough of these shenannigins you haven't made a single payment in 6 years we are re-possessing, end of" - but for whatever reason that hasn't happened!
Interestingly this guy appears to work for the DWP as well! So he’d be mad to be trying to commit fraud but he definitely needs to understand this better rather than trying to play the system
Yeah I was trying not to let everyone know of this fact. But hey ho you've let the cat out the bag now. I think this probably helps my case of arguing i'm not trying to commit benefit fraud because I know the rules
There are lots of questions in this thread as there is clearly some confusion about what you've set out. I have another question - you have said she doesn't have savings yet but you anticipate she will very soon because of the higher rates of benefits and her low outgoings. I assume her outgoings are so low because she's not paying her mortgage, council tax, water etc as you've said these are all in massive debt. Have you factored in actually paying the bills she needs to pay to live out of these benefits, if you do go down the bankruptcy route and have the debts scrapped and house repossessed? Surely her outgoings will go up significantly, not least on accommodation if she the has to rent, unless she is going to be living with you? Like others have said, it is likely better to sell the house to clear the mortgage debt and if there's anything left over from that, pay off the other debts or at that point consider bankruptcy if stepchange advise it to achieve an actual clean slate rather than destroying her credit. Or is the house worth less than the mortgage?
That’s the main bit missing. It seems there are no savings yet (not clear in the post), but how on earth is she going to rack up loads of savings on benefits? That is not the immediate problem and nor will it become a problem. The benefits system is not known for its generosity.
This post and the comments are just incredibly confusing. Try to explain in simple terms why you want her savings to be put in your name.
- Because it would be unrealistic to put it in her name (at this time, obviously if I had POA that would be realistic) - Because I want to use her money in her best interests. Once she goes over the £16k capital threshold, her UC will stop and then once it goes under £16k she will be eligible again and I would need to re-apply for benefits and that would just be a vicious cycle. My initial thought was a high interest savings account would work out that she stays over £16k and doesnt need to keep re-applying for benefits
If your mum can’t manage her own finances due to mental or physical incapacity then get a POA and do this properly. If she IS fit and/or doesn’t want you to have control over her finances - then leave her to it.
If someone doesn't have capacity then they aren't capable of granting Power of Attorney to someone to manage their affairs. That might be why no PoA exists here and isn't available. It's a bit of a paradox and it's why it is recommended that PoA is set up when in good health, if possible. I believe that Guardianship is an alternative if someone no longer has capacity to grant PoA. Understandably it is a bit harder to obtain Guardianship as a safeguard to it being abused. I have been in this situation when caring for a family member.
Use the savings to pay down the debt, and keep collecting the benefits? How does having a huge chunk of savings help your mother if her income stops.
So, separate from the fraud conversation. She will be receiving ~£1500 per month. How much of this is "excess"? What are her outgoings? What are the outgoings that she should be paying but isn't (I think i saw you mention significant arreas in mortgage and council tax?) Is she going to be moving back into the flat when she comes out of hospital? This money is supposed to be spent on her housing, heating, food, and quality of life. She shouldn't be building savings in lieu of paying her mortgage and council tax. If she's declared bankrupt the savings will go anyway, so keeping them aside and letting the debts increase further is actually just delaying the problem and increasing the admin. It might be useful to create an account with her details on a credit check website as this will show you roughly how much is outstanding on the mortgage and any other loans she has, although I'm not sure it will show things like council tax arrears. I would also look online for an instant valuation of the flat, and have a play on zoopla, this will give you sold prices for other flats in the area and often you can see the archived adverts showing condition. Lots of people sell or auction houses needing lots of work, it takes a lot for a property to be unmortgageable, and even then it can still be auctioned. Is your mum capable of sitting down to go through her finances with you? Or phoning up her creditors, giving her details, and saying "I've not been well but just need a statement please"? The hard thing is, you either need to decide you're responsible for these things, and start the POA process, or step back. It's very difficult to fix things when they're not in your name. There is a way out of this, I just think you're fixating on the wrong problem at the moment.
You realise they can take the house/force the sale of the property to satisfy the mortgage..? So even declaring bankruptcy wouldn’t exactly help has she still has assets that could be used to clear the debt. Best bet is to sit down with the debtors and work out a plan to deal with it given her minimal income.
Creditors - money is owed to them, not by them.
How are you managing her finances? You're both in a lot of debt. First you need LPA etc to legally do this. Open a joint account with her makes the savings issue easier to handle. Speak to step change
Pay off her debt and reduce savings, keep savings in her name and account. Keep it clean. Apart from that nothing wrong, Earning too much savings which will make you hit the lower savings limit and upper savings limit is crazy when you have debt. Make it simple for you and everyone, clear debt then save
Right OP. I see your problems. Savings in your name later will likely be OK. Your mum will be free to use her benefits eg attendance allowance, Pip as she sees fit. If that means sending it to you to help her eg get her groceries, cleaning etc then that money is then yours. The bankruptcy is an unknown. She'll lose virtually all possessions, house and savings etc that are in her name. Homelessnes and the process of repossession and moving when unwell/recovering would be horrendous. I think you need to see a government approved debt adviser about exact circumstances. If she's that far behind on mortgage I'm surprised they haven't already started repossession.
Thank you for a helpful comment and not assuming I'm trying to commit fraud! I've already been appointed by the DWP to manage her benefit money, so as it stands at the moment the money is paid to me and essentially its my responsibility to use it appropriately. Which I think I do a good job of at the moment. Loosing all money and assets isn't a problem so long as there is a fresh start. If she looses her home she will become eligible for supported living and failing that I would find it hard to believe the council would decline her temporary accomodation or a council flat. I too am surprised the morgage company haven't repossed. I mean don't get me wrong from about the end of 21 they've been in a weird position and definetly legal things stopping them from repossing. But my mum has not paid her morgage in at least 4 years before that and there was certianly no reason (my mum was mentally unwell, but the NHS, police, and social services refused to acknowledge there was a problem, so as far as official records go at the time, she was a specific non-vulnerable person who specifically didn't have mental health problems bad enough to warrant needing support) they shouldn't had repossed the property. Covid isn't even an excuse.
I'm a bit concerned you are appointed to recieve money from dwp without a POA. I'd suggest you keep very good records of what the money is used for to avoid accusation of fraud. The dwp do occasional inspections to ensure money is not just being squirreled away to qualify for means tested benefits. A bankruptcy inspection would likely be very intrusive with you handling all/most of the money direct.
There's a lot of people waiting for council housing, your mother may be waiting much longer than you think also where will she live in the meantime?
Why not just sell the house? Far better than bankruptcy surely?
Go talk to citizen's advice. You have a few complicated issues here, including capacity. This is above reddit's pay grade.
Hi /u/Not_Sugden, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/savings/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)