Incapacity benefit and dependants savings question?

johnsmi

Hi foks,

Just thought I would run this past you good folks on the forum.

I am on contribution based ib and am claiming for my partner as an adult dependant as we have a child I think we get about £50 a week for my partner.

I am thinking of transfering my savings to my partners name as she wouldn't be taxed so she has a whole pseronal allowance to use, so we would get gross interest (and the extra money though small would be very useful) whereas I dont. Its a perfectly legal thing to do as I have been advised on the cutting tax forum here.

Just want to make sure that this wouldn't affect our ib claim as it does say here

http://www.benefitsnow.co.uk/incapacity/adultdependant.asp

that she is not allowed to earn above a certain amount per week, and if savings interest can be classified as earnings. Just want to be really sure.

Hope someone is able to shed some light on this, and thank you very much.

John

MrsManda

Taxable savings interest is counted as earnings as it's subject to income tax, ISA savings interest is not counted.
Would your partner be earning £1970 in taxable interest a year with the savings?

johnsmi

Thanks for reply. It may be possible that she would earn that amount £1970 depending on the interest rate as I wish to put all my savings in her name for tax purposes. I am actually on long term IB so I think the earnings limit would be £59.80 a week so that would be interest earnings of £3075 a year which she would definitely not fall into. The thing is as she's not working atall she would not be liable for any tax atall on the interest as she has whole personal allowance totally unused.

I'm still not clear on this as I get IB and shes the dependant because of our child, she gets no benefit atall in her name except child benefit and child tax credits.

Maybe someone who understand the dependant addition for contribution based IB can help me clear this up if putting the savings in her name is against the law ie no longer entitled to be an adult dependant on my IB claim.

thanks a lot for yoru help.

John

nobodyputsbabyinacorner

Not 100% sure on this one but generally a contributions claim is for you only and then the partner's allowance on the claim is means tested.

The best thing to do would be to ring IB and ask them just to keep yourself right. They might not get an answer to you straight away but someone will get back to you the same day. Another option could be CAB as they are usually quite helpful but this could take longer for a response.

cassieB57

Nope, IB is not means tested. So it is not affected by capital.And as for interest on capital for the purposes of benefits it is treated as capital, not earnings

johnsmi

Thanks for replies everybody. I just want to stay within the law as I know this thing about IB adult dependant is not something that maybe even people who are well up on benefits are sure of.

The link that I give on first post
http://www.benefitsnow.co.uk/incapacity/adultdependant.asp

Says that
"The addition will not be paid if the spouse or civil partner earns more than £37.90 (for those on short-term IB) or £59.15 per week (for those on long-term IB) "

though I am not sure what year this was for. If as CassieB57 says is correct that interest on savings is not classfied as earnings then I will rest more easily.

John

healy

johnsmi wrote: »

Thanks for replies everybody. I just want to stay within the law as I know this thing about IB adult dependant is not something that maybe even people who are well up on benefits are sure of.

The link that I give on first post
http://www.benefitsnow.co.uk/incapacity/adultdependant.asp

Says that
"The addition will not be paid if the spouse or civil partner earns more than £37.90 (for those on short-term IB) or £59.15 per week (for those on long-term IB) "

though I am not sure what year this was for. If as CassieB57 says is correct that interest on savings is not classfied as earnings then I will rest more easily.

John

Cassie is correct, interest is not classed as earnings, it is classed as capital.

johnsmi

Thanks everybody. Think I will sleep a little easier tonight since that has been cleared up. Great bunch of helpful people on here.

Thanks again
John