Income Support and Child Benefit Savings

mo786

I have a friend on Income Support and she has saved over the years all the Child benefit to each childrens savings account, this is by standing order two days after the child benefit is paid into her account.

The total in the Kids (3) accounts is about £12K does this count as captial ?

She can show the all the bank statements to prove that every single penny in the kids accounts came from the Child Benefit money.

Thanks in advance

HappyMJ

If the accounts are in the childrens names only and not held in her own name and she has no right to use the money or any way of being able to withdraw the money without the children doing it for her then the capital will not count.

I have a Halifax childrens regular saver in the name of HAPPYMJ TTEE FOR MISS A. CHILD but as I can withdraw the money without her consent then the money in that account does count. She also has a Santander 11-15 Current Account which I cannot access and the money in that account does not count.

The statements of the kids accounts should then be the property of the child and she should not be showing them to anyone including anyone to do with benefits.

mo786

HappyMJ wrote: »

If the accounts are in the childrens names only and not held in her own name and she has no right to use the money or any way of being able to withdraw the money without the children doing it for her then the capital will not count.

I have a Halifax childrens regular saver in the name of HAPPYMJ TTEE FOR MISS A. CHILD but as I can withdraw the money without her consent then the money in that account does count. She also has a Santander 11-15 Current Account which I cannot access and the money in that account does not count.

The statements of the kids accounts should then be the property of the child and she should not be showing them to anyone including anyone to do with benefits.

Thanks for that, the accounts are "in her name" FOR "the child" so they do count.

At what age can a child have a seperate account ?

Thanks again.

Mojisola

Doesn't this apply?
https://www.dwp.gov.uk/docs/is-20.pdf
Capital held by a dependant
If Child Tax Credit has been awarded, any capital belonging to a dependent child or young person will be disregarded when working out your Income Support payment.

If you are getting additional Income Support for a child or young person, capital held by a dependent child or young person is disregarded unless they own more than £3,000. In that case no personal allowance or premium is payable for that child or young person. However, any family premium will still be paid.

anguk

I thought if you were claiming Income Support dependant children could only have savings up to £3,000? Because otherwise what's to stop parents putting money into a child's savings account to avoid losing their benefit?

What about accounts that can't be accessed until a child is 18, would that be different?

mo786

Mojisola wrote: »

Doesn't this apply?
www.dwp.gov.uk/docs/is-20.pdf
Capital held by a dependant
If Child Tax Credit has been awarded, any capital belonging to a dependent child or young person will be disregarded when working out your Income Support payment.

If you are getting additional Income Support for a child or young person, capital held by a dependent child or young person is disregarded unless they own more than £3,000. In that case no personal allowance or premium is payable for that child or young person. However, any family premium will still be paid.

Interesting ... will ask her to visit the local CAB office or if someone else can shed some more light.

mo786

anguk wrote: »

I thought if you were claiming Income Support dependant children could only have savings up to £3,000? Because otherwise what's to stop parents putting money into a child's savings account to avoid losing their benefit?

What about accounts that can't be accessed until a child is 18, would that be different?

I understand why, but the monies in the kids accounts are soley from Child benefit and this can be proved by showing the Mothers and kids bank statements.

She should have spent it or kept it under the bed

HappyMJ

mo786 wrote: »

Thanks for that, the accounts are "in her name" FOR "the child" so they do count.

At what age can a child have a seperate account ?

Thanks again.

She can give it to the children on maturity of the product and not have it held in trust. A child can have an account of their own from 11 with most banks.

anguk wrote: »

I thought if you were claiming Income Support dependant children could only have savings up to £3,000? Because otherwise what's to stop parents putting money into a child's savings account to avoid losing their benefit?

What about accounts that can't be accessed until a child is 18, would that be different?

The accounts that can't be accessed until 18/21 are usually friendly society bonds saving at a rate of £25 a month. They don't count.

Children can have earnings of their own and can have more than £3,000 but the source of the funds may be questioned. If it's saved at a rate of £10/£15/£20 a week from the parent for the life of the child then I don't see why it should be counted. Any excess from the parent over that amount may be counted.

mo786 wrote: »

I understand why, but the monies in the kids accounts are soley from Child benefit and this can be proved by showing the Mothers and kids bank statements.

She should have spent it or kept it under the bed

She cannot show the child's bank statements as they are not her property. The children must give permission for them to be shown. Keeping under bed is not a good idea. Spending it on the children is a good idea. She could go on a holiday of a lifetime saying that she was saving the money for exactly that purpose as holidays of a lifetime do cost thousands.

rogerblack

It's not as simple as 'in your name' = you can't have savings over the limit.
http://www.dwp.gov.uk/docs/dmgch52.pdf - search for 'Pradeep'

You are the legal owner of money in an account belonging to you.
However, you may not be the beneficial owner.
It's complex.
Checking the IS rules - the same example is given.

In short - if you claim the money is in trust, a number of things may make your case stronger.
Written evidence of a trust.
The fact that it's never otherwise been touched by you.
Clear link between the source of the money and its destination (child benefit -> childs account).

However, the above not being true doesn't make the money non-exempt, it merely makes it a lot harder to argue.

Mojisola

mo786 wrote: »

I understand why, but the monies in the kids accounts are soley from Child benefit and this can be proved by showing the Mothers and kids bank statements.

She should have spent it or kept it under the bed

CB is given to parents to help with the costs of raising children - not for savings. If she's had enough income not to need this money for daily living up til now, she's been lucky.

Now things have changed and the money will have to be used for day-to-day spending.

Mojisola

HappyMJ wrote: »

She could go on a holiday of a lifetime saying that she was saving the money for exactly that purpose as holidays of a lifetime do cost thousands.

Bad advice. Read up on deprivation of capital.