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  • FIRST POST
    • gray1404
    • By gray1404 4th Dec 17, 1:26 AM
    • 88Posts
    • 6Thanks
    gray1404
    What can money/savings be spent on for ESA purposes?
    • #1
    • 4th Dec 17, 1:26 AM
    What can money/savings be spent on for ESA purposes? 4th Dec 17 at 1:26 AM
    Family member has recently received backpayment of Council Tax due to council tax exemption being applied. Is there any guidance on what he can and cannot spend it on so that it won't become regarded as savings for the purposes of Income based ESA?

    Thanks.
Page 1
    • _shel
    • By _shel 4th Dec 17, 5:50 AM
    • 1,094 Posts
    • 1,856 Thanks
    _shel
    • #2
    • 4th Dec 17, 5:50 AM
    • #2
    • 4th Dec 17, 5:50 AM
    Family member has recently received backpayment of Council Tax due to council tax exemption being applied. Is there any guidance on what he can and cannot spend it on so that it won't become regarded as savings for the purposes of Income based ESA?

    Thanks.
    Originally posted by gray1404
    It is savings regardless and needs to be declared but can be spent on reasonable day to day living expenses
    Thanks to everyone who posts competitions
    • TELLIT01
    • By TELLIT01 4th Dec 17, 8:12 AM
    • 4,265 Posts
    • 4,444 Thanks
    TELLIT01
    • #3
    • 4th Dec 17, 8:12 AM
    • #3
    • 4th Dec 17, 8:12 AM
    If the repayment leaves savings at below £6k it needs to be reported but won't affect benefit. Above £6k benefit will reduce by £1 for every £250 over £6k. For example savings of £6999 would reduce benefit by £4 per week.
    Money can be spent or replacement of items like worn carpets, redecorating, replacing aging 'white goods'. Try spending it on 50" flat screen TV with all the knobs and whistles and questions would be asked, and it would probably be treated as deprivation of capital.
    • Ames
    • By Ames 4th Dec 17, 12:22 PM
    • 16,585 Posts
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    Ames
    • #4
    • 4th Dec 17, 12:22 PM
    • #4
    • 4th Dec 17, 12:22 PM
    If the repayment leaves savings at below £6k it needs to be reported but won't affect benefit. Above £6k benefit will reduce by £1 for every £250 over £6k. For example savings of £6999 would reduce benefit by £4 per week.
    Money can be spent or replacement of items like worn carpets, redecorating, replacing aging 'white goods'. Try spending it on 50" flat screen TV with all the knobs and whistles and questions would be asked, and it would probably be treated as deprivation of capital.
    Originally posted by TELLIT01
    CIS suggests on another thread that it's disregarded for a year as it's benefit back pay.
    Unless I say otherwise 'you' means the general you not you specifically.

    Reading the alphabet in 2017. 21/100
    ABCDEFGHIJKLMNOPQRSTUVWXYZ
    • TELLIT01
    • By TELLIT01 4th Dec 17, 12:47 PM
    • 4,265 Posts
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    TELLIT01
    • #5
    • 4th Dec 17, 12:47 PM
    • #5
    • 4th Dec 17, 12:47 PM
    CIS suggests on another thread that it's disregarded for a year as it's benefit back pay.
    Originally posted by Ames
    It still needs to be reported if it takes savings over the £6k limit. If DWP don't know the source it can create problems further down the line.
    • baza52
    • By baza52 4th Dec 17, 1:50 PM
    • 2,056 Posts
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    baza52
    • #6
    • 4th Dec 17, 1:50 PM
    • #6
    • 4th Dec 17, 1:50 PM
    Book yourself a nice foreign holiday in the sun and update your car. Both are alowable expenses.
    • gray1404
    • By gray1404 4th Dec 17, 8:32 PM
    • 88 Posts
    • 6 Thanks
    gray1404
    • #7
    • 4th Dec 17, 8:32 PM
    • #7
    • 4th Dec 17, 8:32 PM
    Book yourself a nice foreign holiday in the sun and update your car. Both are alowable expenses.
    Originally posted by baza52
    Seriously? lol
    • gray1404
    • By gray1404 4th Dec 17, 8:33 PM
    • 88 Posts
    • 6 Thanks
    gray1404
    • #8
    • 4th Dec 17, 8:33 PM
    • #8
    • 4th Dec 17, 8:33 PM
    As well as replacing things around the house that are aged e.g. carpets and white goods or say a bed... would clothes also be acceptable to spend the money on? Are receipts required or not?
    • baza52
    • By baza52 4th Dec 17, 9:06 PM
    • 2,056 Posts
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    baza52
    • #9
    • 4th Dec 17, 9:06 PM
    • #9
    • 4th Dec 17, 9:06 PM
    Seriously? lol
    Originally posted by gray1404
    Yes

    You are allowed to have a holiday abroad and you can certainly buy a car. I bought a car for 5k and had no problems with DOC.
    • Ames
    • By Ames 4th Dec 17, 9:22 PM
    • 16,585 Posts
    • 29,021 Thanks
    Ames
    Seriously? lol
    Originally posted by gray1404
    Yes and no. There are no hard and fast rules, it all depends on circumstances. Inherit 25k and blow the lot on a brand new car, unlikely to be ok. Spend 5k on a second hand car and a grand on a family holiday, probably ok.

    It basically comes down to what's reasonable. Case in point this thread - Tellit doesn't think a 50" smart TV would be reasonable. I was looking at buying one last week and I don't think £420 on a new TV is unreasonable (assuming your old one is a few years old).

    Clothes - if you're walking around in ten year old primark stuff full of holes then it's ok to replace. If you're walking around in six month old Armani, then it's not. With a whole load of grey area in between.

    I'd say that spending on mid-range stuff will probably be ok, but keep receipts. Remember, deprivation of capital is about intent.

    It's impossible for anyone on here to say yes or no, it's down to the decision maker who looks at your claim.
    Unless I say otherwise 'you' means the general you not you specifically.

    Reading the alphabet in 2017. 21/100
    ABCDEFGHIJKLMNOPQRSTUVWXYZ
    • gray1404
    • By gray1404 4th Dec 17, 9:52 PM
    • 88 Posts
    • 6 Thanks
    gray1404
    And I think that's the worrying thing. It is down to the decision maker so you really just don't know.

    Being totally realistic though. I had a look round his flat today and the following is 100% true (i.e. without any lies and I would swar on a bible). The carpet is old and worn out, his mattress and bed is about 10 years old and could do with being replaced. He does not have a cooker, just a second hand microwave and a second hand fridge and washing machine (family pass downs basically). Could also do with things like some more plates and cups etc...

    All of his clothes are either really cheap or from various charity shops. That is to be honest (and I hope he doesn't read this ever) the area he needs to smarten up in. So, if it is reasonable, if we could go out and get him some nice new "mid range" clothes it would be great. But I would only want to do this with him if it would not come back to bite us by a difficult decision maker.

    I decided to take some pictures today of the flat as proof of the condition its in. I think I am just treading very carefully here because want to do everything according to the rules.
    • TELLIT01
    • By TELLIT01 4th Dec 17, 10:06 PM
    • 4,265 Posts
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    TELLIT01

    It basically comes down to what's reasonable. Case in point this thread - Tellit doesn't think a 50" smart TV would be reasonable. I was looking at buying one last week and I don't think £420 on a new TV is unreasonable (assuming your old one is a few years old).
    Originally posted by Ames
    I'm clearly out of date with TV prices. Last time I noticed the price of a telly that size and it was way north of a thousand quid. I don't think a spend of £400 on a telly would raise any eyebrows.
    • Ames
    • By Ames 4th Dec 17, 10:08 PM
    • 16,585 Posts
    • 29,021 Thanks
    Ames
    And I think that's the worrying thing. It is down to the decision maker so you really just don't know.

    Being totally realistic though. I had a look round his flat today and the following is 100% true (i.e. without any lies and I would swar on a bible). The carpet is old and worn out, his mattress and bed is about 10 years old and could do with being replaced. He does not have a cooker, just a second hand microwave and a second hand fridge and washing machine (family pass downs basically). Could also do with things like some more plates and cups etc...

    That all sounds perfectly reasonable to replace,
    especially the mattress and carpet because if they're really old they could be hazardous (tripping over worn carpet, springs sticking out of a mattress or just being saggy and bad for the back). A cooker wouldn't be unreasonable, and neither would updating fridge and washing machine to something more efficient
    and effective.


    All of his clothes are either really cheap or from various charity shops. That is to be honest (and I hope he doesn't read this ever) the area he needs to smarten up in. So, if it is reasonable, if we could go out and get him some nice new "mid range" clothes it would be great. But I would only want to do this with him if it would not come back to bite us by a difficult decision maker. I doubt it will come back to bite you. One thing I will say though (nothing to do with benefits) is to make sure he actually wants new clothes. If he's happy with charity shop stuff then it's up to him. If he's set in his ways then a lot of change all at once could be quite distressing for him.

    I decided to take some pictures today of the flat as proof of the condition its in. I think I am just treading very carefully here because want to do everything according to the rules.
    Originally posted by gray1404
    That's fine and understandable, but it doesn't sound like you're planning anything that will cause problems with the DWP.
    Unless I say otherwise 'you' means the general you not you specifically.

    Reading the alphabet in 2017. 21/100
    ABCDEFGHIJKLMNOPQRSTUVWXYZ
    • TELLIT01
    • By TELLIT01 4th Dec 17, 10:10 PM
    • 4,265 Posts
    • 4,444 Thanks
    TELLIT01
    Nothing in the items you list would be likely to cause a problem. For example as threadbare carpet can actually be a health / trip hazard so should be replaced. Bed manufacturers recommend changing mattresses every 8 years. A cooker would certainly be deemed an essential.
    Clothes from standard high street stores again no problem. Armani or similar ....???
    • gray1404
    • By gray1404 4th Dec 17, 10:22 PM
    • 88 Posts
    • 6 Thanks
    gray1404
    Thank you so much to all of your for your advise. You have been so kind and sincere about it too! Thank you!
    • epitome
    • By epitome 5th Dec 17, 10:34 PM
    • 3,027 Posts
    • 1,837 Thanks
    epitome
    By the way, strictly speaking it has nothing at all to do with what you spend it on, but why you spent it.

    If you spend it in order to continue receive the same or more benefit then it is DOC

    So if the decision maker saw this thread, they would have no option (in my opinion) but to mark it down as deprivation of capital. Because it is clearly your intention to spend the money so as to receive the same amount of benefit.
    • baza52
    • By baza52 5th Dec 17, 11:08 PM
    • 2,056 Posts
    • 2,026 Thanks
    baza52
    If you were £20k over the £6k threshold for dedections to start you could still spend that £20k without deliberately depriving yourself.
    If you need a car, have not had a holiday for a while and would benefit from a break and all your clothes, furniture and white goods needed replacing or purchising (like buying a tumble dryer if you dont already have one) and even if you replaced all your flooring and completely redecorated your home that would be ok.

    You could in theory spend that £20k in a month.
    If you are buying or replacing things you NEED how could they ever see it as deprivation.

    I went from being over 20k over the 12k cut off point to under the 12k limit in just a few months and not a single spend was asked for.
    All they asked for was a bank statement to prove my savings and my income related benefits restarted.

    OP, dont also forget that any benefit income can be drawn out as cash as soon as it hits the account and spent on anything you wish. You can gamble it away, spend it all on lollypops, bottles of vodka or give it to family, friends or charity. You can ONLY deprive your self of capital and NOT Income.

    Its entirely possible to gift your income and use savings to live off by paying bills, buying food etc with it.
    • gray1404
    • By gray1404 6th Dec 17, 12:00 AM
    • 88 Posts
    • 6 Thanks
    gray1404
    Is this correct about being able to draw any benefit income as soon as it hits the account and spend it on anything? And also use savings to pay off bills and food etc....

    I think to put it another way, he has come into this 5k and in reality there are some much needed items he needs. Things that could do with being replaced years ago but maybe now is a good chance. There is no intention here to do anything wrong.
    • baza52
    • By baza52 6th Dec 17, 12:06 AM
    • 2,056 Posts
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    baza52
    as long as you spend the benefit before the next one is due then it is perfectly ok to do.
    For example, a benefit paid weekly on a monday must be spent before the following monday, for a fortnightly benefit it has to be spent before it is paid again.
    The income only becomes capital if it is in your account when the next payment is due.

    When i had excess capital i would draw any income out as cash as soon as it hit my account and then use my capital to pay for everything.
    • gray1404
    • By gray1404 6th Dec 17, 1:20 AM
    • 88 Posts
    • 6 Thanks
    gray1404
    Thanks - this is very interesting.
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