The Department for Work and Pensions ("DWP") has recently announced its intention to increase review and verification activity in relation to claimants’ financial circumstances. As a result, individuals receiving means-tested benefits may be asked to provide additional information about trusts and any payments received from them.
The interaction between trusts and benefits can be complex and will depend on the nature of the trust, the beneficiary’s circumstances, and the type of support being received.
Providing clear and accurate information can assist the DWP in assessing entitlement and help avoid unnecessary delays in the review process.
We would like to thank Emily Bosworth for their contribution to this article.
The interaction between trusts and benefits can be complex and will depend on the nature of the trust, the beneficiary’s circumstances, and the type of support being received.
Will a Trust affect means-tested benefits?
In some circumstances, payments made from a trust may be taken into account when assessing entitlement to means-tested benefits.The impact will depend on the nature of the payment and the specific benefits being claimed. For that reason, beneficiaries should consider the potential implications before requesting or receiving funds from a trust.Does being named as a beneficiary affect benefit entitlement?
The existence of a trust does not automatically mean that a beneficiary will lose entitlement to means-tested benefits. In many cases, the terms of the trust and the level of control a beneficiary has over trust assets will be important considerations. As always, beneficiaries should review the rules that apply to the benefits they receive and, if in doubt, contact the DWP for guidance. Each trust must therefore be assessed on its own facts and circumstances.Why do benefit authorities ask questions about trusts?
The DWP and other authorities may seek information about a trust when considering a claimant’s financial circumstances and entitlement to means-tested benefits. This may include requests for information about the trust structure, payments made to the beneficiary, and the extent of the beneficiary’s interest in the trust.Providing clear and accurate information can assist the DWP in assessing entitlement and help avoid unnecessary delays in the review process.
Should trustees consider a beneficiary's benefits position?
When considering requests for financial assistance, trustees may wish to understand whether a proposed payment could have implications for a beneficiary’s means-tested benefits. This can form part of the wider decision-making process when exercising trustee discretion.We would like to thank Emily Bosworth for their contribution to this article.
