Benefit Fraud discovered after death, before distribution of funds

[dexter_]

Hello All,

A close friend of mine has recently lost their Father. The children were surprised to find an estate of roughly £40k. The Father was disabled and received Housing Benefit + DLA for many years.

My friend's brother has spoken to a solicitor and been informed that approximately £80k of benefits were fraudulently claimed by their Father. Probate is nearly complete, but the oaths have not been signed, and the funds have not been distributed.

To complicate things further, the house that their Father lived in (and received HB for) is owned by my friend's brother. It was not a commercial arrangement (the house was bought specifically for their Father) - which I gather is also frowned upon.

My friend and their brother are the executors, there was no will.

What is likely to happen in these circumstances? I assume DWP will attempt to recover the entirety of the estate, but what happens to the remainder of the debt?

I'm mainly concerned about the repercussions for my friend, could the debt be passed down to them? If it was discovered that their brother was complicit in the benefit fraud, could DWP attempt to recover the remainder from him (and would it affect my friend?)

Thanks for taking the time to read this.

[des8]

Re: Benefit Fraud discovered after death, before distribution of funds

Hi and welcome.

On what basis has the solicitor ascertained that the father claimed benefits fraudulently?
Has he had access to the father's claim forms?
Does he know how the estate came total £40.000?
Was the £40, 000 incash, or was it made of belongings such as jewellery?
If in cash was te £40000 when the claim was commenced , or was it built up by a frugal lifestyle and saved from benefit payments.
Did the father have an assessed income period award of pension credit?

If there is any debt owed by the deceased it will not pass down to the heirs.
It will be necessary for the DWP to prove the brothers were complicit in fraudulent claims and knowingly made illicit gains.
Why should he have known the financial details of his late father's claims?
Overpayment of Housing Benefit can, in certain circumstances, be reclaimed from the landlord to whom it was paid.

[dexter_]

Re: Benefit Fraud discovered after death, before distribution of funds

Hi des8 and thanks for the reply.

I believe the solicitor is the brother's personal solicitor (and not the probate solicitors) who he'd asked for advice.
The estate is comprised of ~35k in cash and more in life insurance policies.
I am not sure whether the Father was receiving pension credit (though the criteria lead me to believe he may have been eligible)
I believe the savings would not have been so high when the claim was made, but it stands to reason that there may well have been in excess of 16k at the time.

Do you know what difference it makes whether the savings exceeded the threshold at the point the claim was made, or whether the savings just built up over time?

[des8]

Re: Benefit Fraud discovered after death, before distribution of funds

First things first.. ... if there is a possibility of a claim coming in from DWP or whoever, don't distribute the estate.

Without having more details of the circumstances it is not possible to say other than in general terms.
IF the savings exceeded £15000 there was no entitlement to housing benefit.
However that does not mean the claim was fraudulent, it could have been made in error through a misunderstanding.
Did the claimant fill in the forms themselves? Were they confused? Did they have full mental capacity?
The overpayment could still be reclaimed from the estate.

Why does it stand to reason that there was in excess of £16000 when the claim began?

A build up of capital by saving benefits should not affect entitlement to those benefits, and so has an affects possibility of reclaims for benefits like pension credit

[Snoopy1948]

Re: Benefit Fraud discovered after death, before distribution of funds

Hello All,

A close friend of mine has recently lost their Father. The children were surprised to find an estate of roughly £40k. The Father was disabled and received Housing Benefit + DLA for many years.

My friend's brother has spoken to a solicitor and been informed that approximately £80k of benefits were fraudulently claimed by their Father. Probate is nearly complete, but the oaths have not been signed, and the funds have not been distributed.

To complicate things further, the house that their Father lived in (and received HB for) is owned by my friend's brother. It was not a commercial arrangement (the house was bought specifically for their Father) - which I gather is also frowned upon.

My friend and their brother are the executors, there was no will.

What is likely to happen in these circumstances? I assume DWP will attempt to recover the entirety of the estate, but what happens to the remainder of the debt?

I'm mainly concerned about the repercussions for my friend, could the debt be passed down to them? If it was discovered that their brother was complicit in the benefit fraud, could DWP attempt to recover the remainder from him (and would it affect my friend?)

Thanks for taking the time to read this.

The only thing I would add here, with reference to the text in red, is :

Was the brother declared as the landlord in this case i.e. was the family connection declared to the council and also was there evidence that monthly rent was actually in payment throughout the period of housing benefit, either in bank transfer or rent book form?

There is nothing wrong with a family member being a landlord providing it is proven as a commercial tenancy with a full tenancy agreement having been drawn up and in evidence. As such, if the father had been in rent arrears of say eight weeks or more at any time, would the brother have taken eviction proceedings as required in a commercial tenancy?

And if the brother was indeed shown to be in receipt of rent throughout the period, was declaration being made to HMRC as required?

This is a mess and opens so many cans of worms ...

[Twiggy]

Re: Benefit Fraud discovered after death, before distribution of funds

I wonder what happened 'in the end' ?
So many posts on this site are left open and we don't get the benefit of knowing whether issues are resolved or not.

I've just posted a similar situation, where savings had built up over years, so benefit would not have been payable, BUT the total benefit overpayment could greatly exceed the savings and would require much of the proceeds of the house sale being part of the repayment (not very fair)
In this case there was no fraud, the savings had just built up without anyone realising..