If you save your benefits do they get taken back / Lying about savings question

93123 · 16 August 2012 at 12:27AM

According to a family member she knows someone who saved their benefits and they wanted to know why she didn't withdraw her money, then took it all back...

I'm just curious, because I can't see it happening. How would they know?

Also, if you lie about savings, how do they find out? E.g if you say you have none but have thousands in your account or stashed at home?! Again, this is purely out of curiosity, because I can't understand how they'd know...

Lol, reading it makes it look like I want to commit fraud myself... Oh well.

warwicktiger · 16 August 2012 at 12:31AM

If she knows someone who does not need her benefits, because presumably she has another income (not declared?) or significant savings again not declared(?) Then as a taxpayer I hope they do take it back, with interest.

How can someone on benefits save their benefits? ( Note, not save from their benefits!)

93123 · 16 August 2012 at 12:33AM

warwicktiger wrote: »

If she knows someone who does not need her benefits, because presumably she has another income (not declared?) or significant savings again not declared(?) Then as a taxpayer I hope they do take it back, with interest.

How can someone on benefits save their benefits? ( Note, not save from their benefits!)

Yes, it's right that they took it back, but the question was how do they know the savings exist if they didn't declare them, and how do they know you put some benefits aside and not cash it all?

Sorry, I don't understand your last sentence

warwicktiger · 16 August 2012 at 12:40AM

The state knows nearly everything about you, so they will find out!

Some people do manage to live on benefits and have a little left to save.

marleyboy · 16 August 2012 at 12:48AM

Am reminded of this story....

A frugal woman who saved more than £22,000 out of her benefits has been left penniless because she did not tell officials about her nest egg.

Pauline Ford, aged 58, lived in a rusty mobile home, never went out, smoked or drank, and only spent the bare minimum she needed to feed herself and her 15-year-old dog.

She wanted to build up her savings for her old age but fell foul of the law by failing to declare her assets when she applied for means tested benefits.

http://www.dailymail.co.uk/news/article-2075861/Pauline-Ford-58-saved-22k-nest-egg-benefits-pay-back.html

Mersey_2 · 16 August 2012 at 1:19AM

I aaume you mean means tested benefits, eg income-based Job Seekers' Allowance and not contribution-based JSA?

You could try to save eg £2 per week, but this wouldn't affect your entitlement, as £8-16k covers most means tests re benefits or nursing homes and so on.

Government departments and some solicitors and banks can request a customer's bank account in order to identify or prevent fraud, by virtue of a section of the Data Protection Act.

Cabbagewhite · 16 August 2012 at 1:25AM

they know about your savings because the details are disclosed of the interest earned and whether tax deducted, by the bank or building society or other authorised interest payer. All accounts are declared and are very easily matched up by computer. I'm very ex-HMRC but this was done manually years ago. The information was often the start for opening an investigation, along the lines of X amount of interest must mean aprox. Y amount of capital, how have they got that amount of capital if they have only declared Z amount of income for the last 5 years.

johnkat · 16 August 2012 at 9:37AM

Not sure but I think you're OK up to £6,000, which is the amount of savings legitimately allowed before benefits become affected.

Solitaires · 16 August 2012 at 9:54AM

I'm saving my lower rate DLA mobility allowance so I can replace my very old knackered car for an old slightly less knackered car. I've been saving it for two years now and have £400. That is the extent of how much I can save from my benefits. Without this allowance I would be housebound and at the moment have to find tax, insurance and £20 a month petrol from my ESA allowance which really isn't easy but I just about manage it.

Elvisia · 16 August 2012 at 10:23AM

I know they can see what interest you get as I was hauled into a compliance meeting to show them what money I had in my ISAs, as they said they could I had declared them but they wanted to know ( a year later after I first signed on) what was in them.

I have saved up my benefits in the past, this is because I live at home caring for my parents, so if I live very frugally it is possible to put some aside. I did wonder whether you are supposed to declare the extra money if you save it up (this is if you have over 6k in savings) as then your benefit would be cut accordingly, if you see what I mean, so for every £250 you get in benefits that you save you'd lose £1 a week in future benefits. The wording in the leaflet is very loose when it says you have to "declare a change in savings" but not how much, somedays I have to take out of my savings to live so would I declare that, and should I be ringing them up every day after benefits payday to say I am now £71 up? I am just bitter because I got done for my savings, I went in to declare I had extra money as my aunt died and left me a little (enough to make my savings £250 more) and I got told not to worry about it, then was called up when they saw the money was in my ISA and had to backpay my benefits. So they do have a habit of catching up with you in the end.

I am so pleased I am off JSA now, even though I earn sometimes less than my JSA, as it means no one is going to go through my bank statements with a fine toothcomb asking me what I've been spending and on what!

BigAunty · 16 August 2012 at 11:18AM

93123 wrote: »

According to a family member she knows someone who saved their benefits and they wanted to know why she didn't withdraw her money, then took it all back...

I'm just curious, because I can't see it happening. How would they know?

...

Claimants in receipt of means tested benefits are supposed to notify the organisations of changes in circumstances, such as capital they have (savings, etc).

A claimant can have up to 6k in savings without it affecting any means tested benefits and it tapers off until by 16k, they are not eligible.

I doubt that the claimant you are curious about had her savings taken away from her for not spending the money in the way that your friend has led you to believe.

She most probably either claimed benefits when she had too much capital, therefore the benefits she subsequently received were regarded as an overpayment/fraudulent that she had to pay back as she had no entitlement.

Also, people coming into capital, such as an inheritance for example, who are long term benefit claimants can sometimes really resent having to live off their new savings until they fell below the 6-16k limit, and they go to great lengths to conceal their money, give it away or squander it on a buying spree. We see lots of posts on this forum from benefit claimants that are gloomy about receiving an unexpected lump sum because they don't want to spend it on their own rent, council tax, household bills because they are used to the taxpayer providing everything for them and they don't want to spend their new wealth on everyday things, they want to keep it and still claim benefits.

She may feel that she had her money taken away but this was not a direct response because she did not spend them, more about her ignorance of not being entitled to benefits when her savings reached a certain level.

This reminds me of a court case I read about a man who barely spent a penny of his benefits who lived in a housing association property and built up a huge lump sum over years. He was then told he didn't qualify for housing benefit, so he stopped paying the rent despite his vast savings. The housing association won a court order for possession for his rent arrears and he violently attacked the housing association staff.

It also reminds me a possession case in Scotland whereby a tenant won more than 50k on the bingo and stopped paying her rent when her income-based benefits were cancelled. When asked by the judge why she was in rent arrears despite her savings, she said "Because the local council stopped my housing benefit"!

If you save your benefits do they get taken back / Lying about savings question

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