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adult son's money

Suzy

Hi

 Im new to forums and have joined to see if anyone else has the same dilemma as me. I'm  mum to 19 year old Joshua who  has autism. Joshua  is relatively high functioning, is being supported by mencap in unpaid employment with a local charitable organisation, he is unlikely to be able to work without some kind of support,  it's a fantastic placement. I hadn't arranged for Joshua to claim any benefits until recently, his ESA and DLA has now  come through and he receives more money than I expected. I planned for Joshua  to save this money for his future, but note that ESA will be stopped if he has savings over a certain amount. This money willl mount up quickly so  I dont know what to do. Anyone had similar dilemma?

Suzy

Parents

  • These are the ideas that immediately come to my mind to help your son with his predicament:

    # His ESA is a benefit that's intended to enable an adult to provide for their living costs; I distinct have an impression that your son isn't bearing any of those himself. The size of his disposable income (and therefore his predicament) would be slashed if he was to start paying for (a portion of) his "board & lodging". An arrangement between him and you could (and for legal reasons should) be informal and you wouldn't necessarily evict him if he couldn't pay for some reason! I don't know the current rates of ESA & DLA but I'd guess £75pw would make a dent in it.

    # With the above in place, the rate at which he could save would be reduced and therefore he'd encounter the DWP's "lower savings limit" at a later future date. Until then, why shouldn't he accumulate savings upto the value that would prompt a DWP "income claw-back"? I suggest you research what that value is; he should then save upto £500 less than that. The reason for not exceeding "threshold-£500" is that - below that value - he won't be made to demonstrate (to DWP) his savings balance.

    # A way he can save for the future in which the accumulated amount is ignored by the DWP for ESA purposes, is for him to save into a pension plan. It's especially lucrative for people with an income below the "(Income Tax) Personal Allowance" to do so, because their contributions are uplifted by a tax rebate at the Basic Rate of Income Tax (20%) like contributions by Basic Rate taxpayers i.e. a rebate of Income Tax is given that they've never paid! I recommend a "Stakeholder Pension" type scheme (http://www.thepensionsregulator.gov.uk/employers/about-stakeholder-pensions.aspx) because they're regulated to have low-ish charges. 

    HTH.

Reply

  • These are the ideas that immediately come to my mind to help your son with his predicament:

    # His ESA is a benefit that's intended to enable an adult to provide for their living costs; I distinct have an impression that your son isn't bearing any of those himself. The size of his disposable income (and therefore his predicament) would be slashed if he was to start paying for (a portion of) his "board & lodging". An arrangement between him and you could (and for legal reasons should) be informal and you wouldn't necessarily evict him if he couldn't pay for some reason! I don't know the current rates of ESA & DLA but I'd guess £75pw would make a dent in it.

    # With the above in place, the rate at which he could save would be reduced and therefore he'd encounter the DWP's "lower savings limit" at a later future date. Until then, why shouldn't he accumulate savings upto the value that would prompt a DWP "income claw-back"? I suggest you research what that value is; he should then save upto £500 less than that. The reason for not exceeding "threshold-£500" is that - below that value - he won't be made to demonstrate (to DWP) his savings balance.

    # A way he can save for the future in which the accumulated amount is ignored by the DWP for ESA purposes, is for him to save into a pension plan. It's especially lucrative for people with an income below the "(Income Tax) Personal Allowance" to do so, because their contributions are uplifted by a tax rebate at the Basic Rate of Income Tax (20%) like contributions by Basic Rate taxpayers i.e. a rebate of Income Tax is given that they've never paid! I recommend a "Stakeholder Pension" type scheme (http://www.thepensionsregulator.gov.uk/employers/about-stakeholder-pensions.aspx) because they're regulated to have low-ish charges. 

    HTH.

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