benefit means testing for savings

ceridwen

Jules wrote: »

Hi ceridwen
It's not that they see it as interest but as income. They expect you to use £4 per £1000 of your savings as income per week, nothing to do with interest.

For someone made redundant it wouldn't apply for the 1st 6 months if they were claiming cont based JSA but after 6 months it would.
£8,000 savings and they would lose £8 per week from their benefit. They would be expected to take this £8 from their savings.

As the savings reduce so will the tariff income.

Ah - I see. That makes it clear. I used to know the benefit system pretty well years ago. At that time - they "charged" claimants interest on "surplus" savings - at a rather higher rate than one would actually be receiving. Obviously this has now been abolished and this "tariff" system introduced instead - to enable them to help themselves to rather more of a claimants "surplus" savings than they previously were allowed to.

Another benefit cut in other words to what there was back in my day so to say. I wasnt aware of that one having been introduced. That clarifies it. so - another way to look at it is that once one goes onto means-tested benefit - then, assuming one had the full £16,000 of "allowed" savings - that would be £10,000 "surplus" savings and would result in them deducting £40 per week from the £60.50 benefit - until they had worked their way through the first £1,000 of one's savings. Well - that would be the basic gist of it - if not the exact figures. Ah - daylight dawns.

Thanks.

Voyager2002

ceridwen wrote: »

Another benefit cut in other words to what there was back in my day so to say. I wasnt aware of that one having been introduced. That clarifies it. so - another way to look at it is that once one goes onto means-tested benefit - then, assuming one had the full £16,000 of "allowed" savings - that would be £10,000 "surplus" savings and would result in them deducting £40 per week from the £60.50 benefit - until they had worked their way through the first £1,000 of one's savings. Well - that would be the basic gist of it - if not the exact figures. Ah - daylight dawns.

Thanks.

Not quite.

If you have capital (savings and spare cash) amounting to 16 grand or more, you would not get any means-tested benefit. (I am in that situation, and live on child tax credit and child benefit: and I even have to pay Council Tax!).

At the other extreme, if your capital is less than six grand you receive the full array of means-tested benefits appropriate for your circumstances.

There is a system of tapering, so that the amount you receive gradually increases from zero (at the sixteen thousand level) to the full amount at the six thousand level.

And while other posters have talked about Job Seekers' Allowance, remember that a number of other benefits could be important following redundancy: child tax credits can be re-calculated on the basis of your new (reduced) income; Council Tax benefit and for tenants Housing benefit can provide substantial sums; while free school meals and free dental treatment and medicines are important, and not affected by savings.

ceridwen

See what you mean. I'm thinking basically from my own position here I guess - ie childless. Basically the system seems to have been constructed that someone who is childless and owns their own home soon finds themselves in the position of getting literally nothing (assuming a reasonable level redundancy payout). I know about the bit about not getting any benefit if one has over £16k savings - didnt realise one still gets child benefit stuff. I dont have any children - so I wouldnt have any of that. Didnt realise one is expected to pay Council Tax still - even if there is no income at all coming in:eek: if one is in that £16k plus savings situation. I see that housing benefit gets paid to people in rented accommodation - again, doesnt apply.

So - if I had £16k savings - all I would have in the way of income would be free prescriptions then...no Council Tax covered:mad: - that would be it £7.20 once in a while if I needed a prescription. Dentist - not applicable - as mine is private. Not a lotta income then - that £7.20 once in a blue moon.

john539

Jules wrote: »

I don't know about the bank statements but the now have full access to bank accounts via their computer systems so I don't think it would matter when the money was spent they would see it! This was one of the reasons I didn't sign on when I was made redundant I didn't fancy them looking through my accounts.

I remember years ago when my MIL was on Income Support, each year she was called in with a years worth of bank statements and they went through each transaction, I thought this was awful but its worse now they can look when they feel like it.

That's not correct.

Better to give no advice, than hearsay wrong advice.

rightfoot_shifter

So.......your advice?

Voyager2002

ceridwen wrote: »

See what you mean. I'm thinking basically from my own position here I guess - ie childless. Basically the system seems to have been constructed that someone who is childless and owns their own home soon finds themselves in the position of getting literally nothing (assuming a reasonable level redundancy payout). I know about the bit about not getting any benefit if one has over £16k savings - didnt realise one still gets child benefit stuff. I dont have any children - so I wouldnt have any of that. Didnt realise one is expected to pay Council Tax still - even if there is no income at all coming in:eek: if one is in that £16k plus savings situation. I see that housing benefit gets paid to people in rented accommodation - again, doesnt apply.

So - if I had £16k savings - all I would have in the way of income would be free prescriptions then...no Council Tax covered:mad: - that would be it £7.20 once in a while if I needed a prescription. Dentist - not applicable - as mine is private. Not a lotta income then - that £7.20 once in a blue moon.

Indeed.

The best solution for someone in your (or my) position is to get some kind of job ASAP. Failing that, to get rid of some savings to bring your capital below that 16K figure, but in a way that will not make you subject to the rules on "deprivation of capital". For instance, if you were to gamble the lot away and then claim means-tested benefits, you would be treated as if you still had the money. The obvious solution is to pay off part of your mortgage, but the regulations contain all manner of traps for the unwary. I suggest you seek advice. Every DWP office employs people called adjudication officers, and they are very well informed about the regulations and can give intelligent answers to complicated questions (such as spending the money on home improvements: I suspect that the response to that depends on a number of factors).

paul101paul

Thanks to all who have posted, as this has been a very interesting and enlightening thread.

My position is not currently under threat, but with the way the economy is going, i'm wanting to have all my bases covered.

I understand for the first six months it's not dependent on savings, but from then on it is. That's why I'm wondering whether it's best to act now before redundancy comes a knockin'.

I get the impression that if I use some of my savings to pay off a chunk of my mortgage that's fine and not classed as "deprivation of capital" ?.

However, does money I have in Shares (and premium bonds) count as capital ?

p00hsticks

Jules wrote: »

I don't know about the bank statements but the now have full access to bank accounts via their computer systems so I don't think it would matter when the money was spent they would see it!

Do you have evidence of this ? I'm not sure that it's true......

frank_benson

Hi,

Please be kind to a newbie !

I've got an insurance policy (iProtect) which pays out £1000 a month should I get made redundant (upto 12 months). I presume this will affect any benefits I'd be entitled to ?

Will this affect any benefits after 6 months (when it's means tested) or straight away ?

Frank

PS! How does council tax benefit work ?

john539

paul101paul wrote: »

Thanks to all who have posted, as this has been a very interesting and enlightening thread.

My position is not currently under threat, but with the way the economy is going, i'm wanting to have all my bases covered.

I understand for the first six months it's not dependent on savings, but from then on it is. That's why I'm wondering whether it's best to act now before redundancy comes a knockin'.

I'm just wondering if I should open an account in my mum's name, transfer my cash over there and if/when I get made redundant can say to the DSS that I'm potless. Will I fall foul of "deprivation of capital" if I put this into place ? How far will they go back in bank statements ?

I have experienced redundancy before, over five years ago, and fortunately found another position within a month. However, the state of the economy wasn't as dire as it's predicted to be in 2009/10, so I wouldn't be too surprised for those finding themselves out of work, being like it for over six months.

Yes, you would fall foul of deprivation of capital & would be committing fraud.

Hiding money in someone elses account just involves them in it, possibly without them knowing if you have lied to them.

There is possibility you may not get money back, like asking anyone to look after your money.