Cancelling pension credit.

[ImLostAgain]

A friend, in his early sixties, has asked my advice about his pension credit.I've told him what I think but I'm only guessing so I thought I'd ask here.
His relation died in February last year and he inherited a sum of money. He got his cheque in the summer(just guessing here but I think it was about £50,000 by some of the things he has said) and banked it. He has spent a small portion of it he says.
Now the thing is,he just mentioned his pension credit in passing and I asked him if he had cancelled it.He hadn't. To be fair to him he is an honest man and is just confused with money.I told him to write to the pension people and explain what has happened. I also said they will probably want the over-payment of his credits back. He is ok with that but unfortunately he is now worrying himself sick that he will be judged a criminal. My advice was, if you tell the truth all will be ok.
So,two questions. Is my advice correct or is there anything else he should do?
Does he have to tell them where the money came from or just say that he has that much? I have no idea why he wants to know the latter point.

[sara3]

he needs to tell the truth before they find out. I'm not sure if they'll ask where the capital came from, or why it matters to your friend!

he is breaking the law, and if they find out before he declares it, he'll be in a lot of trouble. if he tells them first it's called voluntary disclosure, and I doubt they'd do more than recover the overpayment.

[boxtops]

I agree with sara, suggest that he contacts them to say that he overlooked telling them about his inheritance, not realising that it would make a difference, but saying he now understands that it does and that he wants to set the record straight. Better that he offers the information now so he is offering to repay any overpayment - and probably best that he sorts it out before 5 April too, so it's in this tax year.

[ImLostAgain]

Thanks both of you.That confirmation should, I hope, put his mind at rest.

[themas]

It is sometimes the case that people on Pension Credit are given an "assessed income period", & changes to their income or capital do not then normally affect the amount of their credit until the assessed period (which can be up to 5 years) ends.

This might apply to your friend, but he should in any case report the inheritance.

[sara3]

the rules are the same as Income Support, and any changes need to be reported promptly.

[ImLostAgain]

Thanks again all. He phoned yesterday and says they were fine with him. They are asking him for a copy of his bank statement and said there is nothing to worry about and they will sort it all out for him.

[themas]

I'm glad this has worked out OK.

sara3 - for information; the rules for pension credit are not the same as for income support. They differ in quite a lot of ways. One is that there is no upper capital limit as such for guaranteed pension credit. Another is that various changes of circumstances do not have to be reported for people who are in an "assessed income period".

[sara3]

themas, thanks for that info. do you have a link, as I feel I should know more about this?

[themas]

Sara

Have a look at this leaflet:

http://www.ageuk.org....064_fcs.pdf?dtrk=true

There must also be something on DWP website but I haven't looked there.

[sara3]

thanks again! I'll mail that into work to look further into it :o)