Expert advice please - reducing savings to 6k

jellym

I've recently stopped work to look after my kids and we will now be eligible for more more tax credits and possibly council tax benefits - except- we have a bit more than 6k in savings, which I know impacts the benefits.

My question is: if I were to put some extra money into our mortgage to take savings down to 6k would that cause problems? - and would tax credits/council tax benefit ask questions about this?

tinkerbell84

jellym wrote: »

I've recently stopped work to look after my kids and we will now be eligible for more more tax credits and possibly council tax benefits - except- we have a bit more than 6k in savings, which I know impacts the benefits.

My question is: if I were to put some extra money into our mortgage to take savings down to 6k would that cause problems? - and would tax credits/council tax benefit ask questions about this?

YES THEY WOULD.

It's amazing how many 'newbies' post questions asking how to commit fraud!

real1314

tinkerbell84 wrote: »

YES THEY WOULD.

It's amazing how many 'newbies' post questions asking how to commit fraud!

That's not fraud. If you spend/use some of your savings and tell the relevant people exactly what you have done, it is not fraud.
Fraud involves giving false information or failing to notify a change in your circumstances, not doing someting and being open and honest about what you've done.

And what's more, I think that in some cases paying off a mortgage has been accepted as reasonable spending, however for the OP I'd suggest that it's not really possible to get reliable advice on this issue from a message board.

ecgirl07

real1314 wrote: »

That's not fraud. If you spend/use some of your savings and tell the relevant people exactly what you have done, it is not fraud.
Fraud involves giving false information or failing to notify a change in your circumstances, not doing someting and being open and honest about what you've done.

And what's more, I think that in some cases paying off a mortgage has been accepted as reasonable spending, however for the OP I'd suggest that it's not really possible to get reliable advice on this issue from a message board.

While not fraud it is looked on as "deprivation of capital" and a decision maker will decide if it was done in order to qualify for benefit and make a decision accordingly.

poet123

Reducing a mortgage to reduce outgoings is not fraud nor deprivation of capital(speaking as a former fraud officer)and is an acceptable form of using capital.

[Deleted User]

poet123 wrote: »

Reducing a mortgage to reduce outgoings is not fraud nor deprivation of capital(speaking as a former fraud officer)and is an acceptable form of using capital.

I hate to disagree but i was told in no uncertain terms by the dwp that such payment would be seen as deprivation of capital,after all thats exactly what it is,but remember that savings just over 6k would only serve to reduce the benefit not stop access to it alltogether

jellym

Many thanks for the responses - I certainly wasn't asking how to commit fraud - really just for a 'finger in the air' indication of whether this is the sort of spending that would be considered relevant for a claim.

glossgal

If you'd been making mortgage overpayments for ages before the benefit claim then it wouldn't necessarily be an issue but if you say you have six grand, they'll ask for old bank statements..if you've had a sudden spurt of overpayments well, what conclusion would you draw if you were the one making a decision?! exactly.

Local councils are far more thorough with paperwork than DWP in my experience so I would tread carefully. I know you aren't out to fraud anyone in the classic sense but as others have said, if you can still get benefit even with the savings, is it worth it?

bestpud

For tax credit purposes it won't matter anyway (if it is just over the £6k) because they don't count savings. They do count any interest you earn from savings over £300 per year but do not count money in an ISA.

Sooo, if it is just over the £6k it will only reduce your council tax benefit. I think £16k is the point at which you would not be entitled at all.

And for tax credits, it may not count anyway, and if it does than you can reduce the 'damage' by putting it into an ISA (or some of it).

But if you can use it to pay off some of your mortgage then that is obviously the wiser choice.

churchrat

does it depend on who looks at your account?? I help my disabled cousin with his finances and was told under no circumstance would they (benefits people) agree to him using any savings to pay mortgage, IF they thought it was done to recieve a larger benefit payment.
Phoned a few days later and the woman I spoke to asked had we considered paying a lump sum off the mortgage and lowering his savings???
You pays your money and takes your choice!!!

[Deleted User]

churchrat wrote: »

does it depend on who looks at your account?? I help my disabled cousin with his finances and was told under no circumstance would they (benefits people) agree to him using any savings to pay mortgage, IF they thought it was done to recieve a larger benefit payment.
Phoned a few days later and the woman I spoke to asked had we considered paying a lump sum off the mortgage and lowering his savings???
You pays your money and takes your choice!!!

I think this just goes to prove that the rules on deprivation of capital are complex,my advice in such a situation would always be to seek clarification from the DWP in WRITING everytime