Universal Credit for [merged]

anniemac1973

Hi totally new to this so sorry if this question has already been asked.I currently work 16 hours per week as a teaching assistant(Term time only).I have a husband who currently recieves DLA(how long for is anyones guess after all hes only been getting it 16 years).We have 3 children all over 13.Is this right what im hearing that i will lose my WTC or have to increase my hours to 24? Im rather confused as i thought WTC was to encourage people off benefits and into work not the other way round.I wont be able to increase my hours so will be left either with the choice of packing work in(which i dont want to do)or be worse off.

SkyeKnight

Sixer wrote: »

The proposals are that UC will have capital rules, like most means tested benefits now, but unlike tax credits. So you wouldn't be able to claim it with capital over £16k. Presumably, then, it's possible you could fall foul of deprivation rules.

Does anyone think that they are going be able to do all the "deprivation of capital" rules that they do for current means tested benefits? That's going to be a nightmare! For a start there are going to be millions more people to keep an eye on, but it's not just that.

If I was unemployed and had no income of my own then I would feel that I had to be super-careful with my money and not spend it frivolously. If you are working though and earning an average salary then I think it is quite understandable that you will feel you can spend your money on anything you see fit.

In my house our savings go up and down a lot. We recently saved for a new kitchen then spent several thousand pounds. If there is a lot of money in my savings account I pay something off the mortgage since it has a higher interest rate than my savings. Both of those things would normally be considered "deprivation of capital" I believe.

Are the government really going to be involved every time people buy a new boiler, a holiday or some double-glazing and their savings go down? All perfectly normal purchases for someone working full time with over £6k in savings. I think it's going to be hard to prove that any money spent was done deliberately to gain benefits.

Sixer

SkyeKnight wrote: »

Does anyone think that they are going be able to do all the "deprivation of capital" rules that they do for current means tested benefits? That's going to be a nightmare! For a start there are going to be millions more people to keep an eye on, but it's not just that.

If I was unemployed and had no income of my own then I would feel that I had to be super-careful with my money and not spend it frivolously. If you are working though and earning an average salary then I think it is quite understandable that you will feel you can spend your money on anything you see fit.

In my house our savings go up and down a lot. We recently saved for a new kitchen then spent several thousand pounds. If there is a lot of money in my savings account I pay something off the mortgage since it has a higher interest rate than my savings. Both of those things would normally be considered "deprivation of capital" I believe.

Are the government really going to be involved every time people buy a new boiler, a holiday or some double-glazing and their savings go down? All perfectly normal purchases for someone working full time with over £6k in savings. I think it's going to be hard to prove that any money spent was done deliberately to gain benefits.

It would/will be a nightmare. So far as I can see, the UC proposals specifically intend discouraging people with fluctuating savings (and income sufficient to enable them to save and spend to this level) from claiming at all. The briefing notes openly state that 100,000-200,000 current tax credit claimants won't be eligible for UC due to capital above £16k and another 200,000-300,000 will see their entitlement reduced to tariff income on savings above £6k. People who regularly save (for holidays, home improvements, etc) then spend, will find it's simply too much trouble to claim, presumably.

www.dwp.gov.uk/docs/ucpbn-3-capital.pdf

BigAunty

anniemac1973 wrote: »

Hi totally new to this so sorry if this question has already been asked.I currently work 16 hours per week as a teaching assistant(Term time only).I have a husband who currently recieves DLA(how long for is anyones guess after all hes only been getting it 16 years).We have 3 children all over 13.Is this right what im hearing that i will lose my WTC or have to increase my hours to 24? Im rather confused as i thought WTC was to encourage people off benefits and into work not the other way round.I wont be able to increase my hours so will be left either with the choice of packing work in(which i dont want to do)or be worse off.

http://www.hmrc.gov.uk/taxcreditsbudget/index.htm#2

rotoguys

Killmark wrote: »

Their has to be a tipping point if birth rates continue to decline and the numbers of pensioners increase? Whats the solution increase pension ages? Have people in their seventies on JSA? Even then your effectively means testing pensioners by other means.

Just picking up on this point.

I have already recently asked the Benefit Enquiry Line and the Pension Service this question and received two different answers:

If you are entitlled to claim either ESA or JSA but either choose to (1) claim Pension Credit instead OR (2) had been claiming JSA or ESA and decided to claim Pension Credit because there was no need to sign on, look for a job, produce sick notes or attend medicals - what would happen.

Benefit Enquiry Line say that you can do the first but not the second. If you choose to apply for Pension Credit and you are able to either claim ESA or JSA instead and the decision was made to claim pension Credit because it carried no conditions (to make life easier) then it will be assumed you are receiving the unclaimed benefit as PC is merely a top up benefit.

Whereas the PS say that you have the choice no matter what and there would be no question of treating an unclaimed benefit as income.

When the PS was pushed on the matter, the answer was slightly different. "Errr well we would make that sort of decision if and only you had cancelled the ESA/JSA claim and claimed PC"

So it would seem technically possible now, that people could be 'forced' to claim JSA or ESA up to their normal retirement date if that benefit was still available to them.
And not as most do now, and jump ship from ESA/JSA because there are no conditions attached to PC AND they would get exactly the same level of income.

Have I opened up a can of worms with the DWP/PS? I have put this question also in writing to them - so will be very interested in the answer I get back!
Reason - I claim ESA AND PC. I just need to know what will happen if decide to close the ESA claim. At the moment my PC is topping up our income.

BigAunty

SkyeKnight wrote: »

...

In my house our savings go up and down a lot. We recently saved for a new kitchen then spent several thousand pounds. If there is a lot of money in my savings account I pay something off the mortgage since it has a higher interest rate than my savings. Both of those things would normally be considered "deprivation of capital" I believe.

Are the government really going to be involved every time people buy a new boiler, a holiday or some double-glazing and their savings go down? All perfectly normal purchases for someone working full time with over £6k in savings. I think it's going to be hard to prove that any money spent was done deliberately to gain benefits.

I don't think you understand the deprivation of capital rules.

It's about deliberately giving away, spending and transferring capital in order to intentionally exploit the benefits system. It's about people knowingly going on a spree for unjustifiable non-living expense related things who know about the capital thresholds. This includes things like transferring property and shares to relatives, giving money to friends..

Typical household spending, including maintenance and refurbishment, replacement car, a holiday, is not an issue.

On this forum is a thread about an elderly man who sold his property to his son, gave the balance to his daughter and is hoping to move into private rented accommodation or social housing, as his relationship with his son where he now lives in his former property has broken down. Now, someone giving away perhaps hundreds of thousands of pounds away to relatives, then crying homelessness and expecting HB, that could be tricky...

SkyeKnight

BigAunty wrote: »

I don't think you understand the deprivation of capital rules.

It's about deliberately giving away, spending and transferring capital in order to intentionally exploit the benefits system. It's about people knowingly going on a spree for unjustifiable non-living expense related things who know about the capital thresholds. This includes things like transferring property and shares to relatives, giving money to friends..

Typical household spending, including maintenance and refurbishment, replacement car, a holiday, is not an issue.

On this forum is a thread about an elderly man who sold his property to his son, gave the balance to his daughter and is hoping to move into private rented accommodation or social housing, as his relationship with his son where he now lives in his former property has broken down. Now, someone giving away perhaps hundreds of thousands of pounds away to relatives, then crying homelessness and expecting HB, that could be tricky...

I don't understand the deprivation of capital rules (hence the questions), but it's definitely not just about blatantly spending hundreds of thousands of pounds.

There are other threads where people on benefits have been told they can't spend an inheritance or redundancy money on buying a house, putting in central heating, buying a new car, paying back debts or paying off their mortgage. People with savings being told that they can only take a "modest" holiday not a month in Hawaii. If I want a month in Hawaii then I would expect to save up for it and buy it normally. If my savings are in the £6k to £16k range am I going to have to run it past HMRC? Am I allowed to take a less "modest" holiday than people on the dole or are the rules the same and I have to take a weekend in Blackpool instead?!

Paying money off the mortgage is definitely normally considered deprivation of capital, but I do that regularly and it does tend to keep my savings under the £6k limit - but not to claim benefits obviously. I think Sixer may be right and it will be too complicated to claim UC (which may be the purpose anyway).

SkyeKnight

Sixer wrote: »

It would/will be a nightmare. So far as I can see, the UC proposals specifically intend discouraging people with fluctuating savings (and income sufficient to enable them to save and spend to this level) from claiming at all. The briefing notes openly state that 100,000-200,000 current tax credit claimants won't be eligible for UC due to capital above £16k and another 200,000-300,000 will see their entitlement reduced to tariff income on savings above £6k. People who regularly save (for holidays, home improvements, etc) then spend, will find it's simply too much trouble to claim, presumably.

www.dwp.gov.uk/docs/ucpbn-3-capital.pdf

Thank-you for the link. The way that is written it seems that they are just going to look at your savings - no mention of what you spend them on. In which case most people with a house are going to pay enough off the mortgage to take their savings under £6k rather than lose UC at a rate of over 20% on savings. They won't save a lot of money except on the poor people saving for a mortgage deposit!

The government could even end up losing money as there is now a big incentive to get your savings under £6k and people will have far less savings for when they lose their job - they will be immediately eligible for all means tested benefits.

welshmoneylover

SkyeKnight wrote: »

The government could even end up losing money as there is now a big incentive to get your savings under £6k and people will have far less savings for when they lose their job - they will be immediately eligible for all means tested benefits.

Has anyone considered what will happen with our pensions/old age? We're being constantly told to save towards our later, yet they are actively discouraging saving so that people can claim wtc.

Most people I know of cannot manage their monthly budget without claiming wtc.

zagfles

welshmoneylover wrote: »

Has anyone considered what will happen with our pensions/old age? We're being constantly told to save towards our later, yet they are actively discouraging saving so that people can claim wtc.

Most people I know of cannot manage their monthly budget without claiming wtc.

Pension savings won't count as savings. In fact you'll be able to deduct half your pension savings from your income, so you'll get more UC, not less, if you save in a pension.