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If you save your benefits do they get taken back / Lying about savings question
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# 1
93123
Old 16-08-2012, 12:27 AM
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Default If you save your benefits do they get taken back / Lying about savings question

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.

Last edited by 93123; 16-08-2012 at 12:29 AM.
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# 2
warwicktiger
Old 16-08-2012, 12:31 AM
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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!)
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# 3
93123
Old 16-08-2012, 12:33 AM
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Quote:
Originally Posted by warwicktiger View Post
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
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# 4
warwicktiger
Old 16-08-2012, 12:40 AM
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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.
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# 5
marleyboy
Old 16-08-2012, 12:48 AM
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Am reminded of this story....

Quote:
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/arti...-pay-back.html
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# 6
Mersey
Old 16-08-2012, 1:19 AM
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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.
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# 7
Cabbagewhite
Old 16-08-2012, 1:25 AM
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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.
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# 8
johnkat
Old 16-08-2012, 9:37 AM
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Not sure but I think you're OK up to 6,000, which is the amount of savings legitimately allowed before benefits become affected.
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# 9
Solitaires
Old 16-08-2012, 9:54 AM
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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.
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# 10
Elvisia
Old 16-08-2012, 10:23 AM
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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!
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# 11
BigAunty
Old 16-08-2012, 11:18 AM
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Quote:
Originally Posted by 93123 View Post
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"!

Last edited by BigAunty; 16-08-2012 at 11:22 AM.
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# 12
Solitaires
Old 16-08-2012, 11:32 AM
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hmm I'm not sure now, should I declare my 400 as savings to the DWP and Council? That's all I have apart from a 150 float for my bills.
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# 13
princessdon
Old 16-08-2012, 11:35 AM
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Quote:
Originally Posted by Solitaires View Post
hmm I'm not sure now, should I declare my 400 as savings to the DWP and Council? That's all I have apart from a 150 float for my bills.
It is over 6K they are interested in.
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# 14
bengal-stripe
Old 16-08-2012, 11:42 AM
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Originally Posted by Solitaires View Post
.....should I declare my 400 as savings to the DWP and Council? That's all I have apart from a 150 float for my bills.
You can have up to 6000 in 'capital' without affecting any means-tested benefits. 'Capital' would include your savings as well as your 'float'.

As you're quite a bit away from those 6k, you don't have to inform anybody.
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# 15
Solitaires
Old 16-08-2012, 12:20 PM
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Thanks, I thought I might have done something wrong by not telling them. There's no chance I'll be able to save 6k but then I wouldn't expect to be able to. I'm hoping I'll be able to pick up a cheap runabout for about 600 so I have a bit to go yet.
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# 16
heartbreak_star
Old 16-08-2012, 2:18 PM
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Quote:
Originally Posted by Solitaires View Post
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.
Can you get a mobility car?

HBS x
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# 17
rogerblack
Old 16-08-2012, 2:27 PM
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Originally Posted by heartbreak_star View Post
Can you get a mobility car?

HBS x
Lower rate mobility - so no.

I've said for a long time it's a pity people can't 'defer' benefits.

This would let you save up any you diddn't need, and draw it out as you like, with no capital limits applying at all.

The benefit to the government would be that this would not be a transferrable asset on death, and would in the meantime be effectively lent by the claimant to the government.
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# 18
Penny-Pincher!!
Old 16-08-2012, 2:34 PM
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Quote:
Originally Posted by princessdon View Post
It is over 6K they are interested in.
Do you not have to let them know of any savings? I remember when we were on Income Support, it was something that never seemed very clear. Do you need to let them know every time you save or is it just over the 6k? Someone I know has recently been made redundant and she has over 12k in savings, but she was still able to receive benefits? I asked her why she couldn't use her savings to live, but she said she was entitled although they deduct a very small amount.

It doesn't make sense to me? I know others with no savings and small children both working but have had to take a cut in wages and they don't receive any help. However, they do have a lot of debt.
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# 19
skintandscared
Old 16-08-2012, 2:41 PM
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Originally Posted by rogerblack View Post
Lower rate mobility - so no.

I've said for a long time it's a pity people can't 'defer' benefits.

This would let you save up any you diddn't need, and draw it out as you like, with no capital limits applying at all.

The benefit to the government would be that this would not be a transferrable asset on death, and would in the meantime be effectively lent by the claimant to the government.
But surely benefits are there to literally prevent people from being on the streets/starving. If people have enough money that they can afford to "defer" benefit payments then I'm sorry but I don't think they should still be entitled to it!
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# 20
alieshia
Old 16-08-2012, 3:39 PM
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Quote:
Originally Posted by Penny-Pincher!! View Post
Do you not have to let them know of any savings? I remember when we were on Income Support, it was something that never seemed very clear. Do you need to let them know every time you save or is it just over the 6k? Someone I know has recently been made redundant and she has over 12k in savings, but she was still able to receive benefits? I asked her why she couldn't use her savings to live, but she said she was entitled although they deduct a very small amount.

It doesn't make sense to me? I know others with no savings and small children both working but have had to take a cut in wages and they don't receive any help. However, they do have a lot of debt.
when my brother was made redundant he lived off of his redundancy pay till it was gone then applied for benefits and because he did it the "right" way he was eligible for a lot less money than if he'd claimed straight away, daft isn't it.
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