Savings/IS and income disregard

brambram

Hi all,
I wonder if any one can help, I am about to get compensation that will take me above 6000 savings, am I right that I will need to pay £1 for every £250.00 over 6000.
And does the earnings disregard, of £5 for income support not cover this.

thanks.

saving_pennies

Hi,

I'm not 100% sure. As you will see from another recent thread on compensation it seems a complex area.

I found this: http://www.dwp.gov.uk/docs/gl27-print-version.pdf but it doesn't give any specific amounts of money.

Hopefully someone else will be along who knows more.

Cpt.Scarlet

Yes it's £1 for every £250 over £6000 upto a max of £16,000.

The earnings disregard does not apply as this is capital.

brambram

That is a shame, big thanks for your replies. I have decided that I am going to keep the balance under 6,000.:).

Whiteknight

Depending on what the compensation is for it could be disregarded - so could have no effect on your Income Support.

HappyMJ

Cpt.Scarlet wrote: »

Yes it's £1 for every £250 over £6000 upto a max of £16,000.

The earnings disregard does not apply as this is capital.

brambram wrote: »

That is a shame, big thanks for your replies. I have decided that I am going to keep the balance under 6,000.:).

Don't base your decision as the reply above as I was told the personal allowances and the £5 disregard still apply. The "deemed earnings" from capital add to your income and may affect your benefits.

So if you had £15,000 of capital but no other income then the deemed income would be £36 per week. As it is under £67.50+£5 then you would still get full HB. If you were to claim Income Support then IS would be reduced by £31 and you still would get full HB. It's very complex so don't rely on "opinions" you get from a forum. Don't even rely on my opinion.

The entitledto website seems to take that into account so try putting your proposed figures through that and see what you could get and also note what whiteknight says that compensation can also be ignored for a period of time too.

Cpt.Scarlet

HappyMJ wrote: »

Don't base your decision as the reply above as I was told the personal allowances and the £5 disregard still apply. The "deemed earnings" from capital add to your income and may affect your benefits.

So if you had £15,000 of capital but no other income then the deemed income would be £36 per week. As it is under £67.50+£5 then you would still get full HB. If you were to claim Income Support then IS would be reduced by £31 and you still would get full HB. It's very complex so don't rely on "opinions" you get from a forum. Don't even rely on my opinion.

The entitledto website seems to take that into account so try putting your proposed figures through that and see what you could get and also note what whiteknight says that compensation can also be ignored for a period of time too.

The questions was about the deductions made for capital in excess of £6000, my answer is correct on the context of capital, as I stated in my response.

If you want to talk about income or notional income resulting from having that capital, then that is an entirley different question and not one asked by the OP.

real1314

HappyMJ wrote: »

Don't base your decision as the reply above as I was told the personal allowances and the £5 disregard still apply. The "deemed earnings" from capital add to your income and may affect your benefits.

So if you had £15,000 of capital but no other income then the deemed income would be £36 per week. As it is under £67.50+£5 then you would still get full HB. If you were to claim Income Support then IS would be reduced by £31 and you still would get full HB. It's very complex so don't rely on "opinions" you get from a forum. Don't even rely on my opinion.

The entitledto website seems to take that into account so try putting your proposed figures through that and see what you could get and also note what whiteknight says that compensation can also be ignored for a period of time too.

Whomever told you that the £5 (or £10 or £20) Earned Income Disregard could be applied to Tariff Income from Capital was completely wrong.

The disregards for capital are based on the capital sum ; i.e £6000. Above this, the tariff is £1 per £250 for most benefits (Not Tax Crdeits tho') ; £1 per £500 for Pension Credit.

Incidentally, for the OP, manipulating your capital to below £6000 could be seen as fraud, or deprivation of capital, depending on exactly how the manipulation is achieved.
On the other hand, there are periods of disregard for comp in some circumstances. :cool: