Universal Credit and Savings

princessdon

SkyeKnight wrote: »

The ridiculous thing is that if the OP buys a house with her savings then they don't count again. I believe we are going to qualify for UC even though we have more than 10x £16k equity in our house.

But at least that is the same for other benefits Ie Income Support etc where they don't take the capital in the home you live in. There is some fairness in some ways

Sixer

Capital will be assessed the same as non-working benefits within UC - ie £6k-£16k cut-offs. You want the 'treatment of capital' PDF here, for confirmation:

http://www.dwp.gov.uk/policy/welfare-reform/legislation-and-key-documents/welfare-reform-act-2012/welfare-reform-draft-regulations/universal-credit-briefing/

There's also transitional protection (see link on same page). This will be until a significant change of circumstance or until the entitlement under UC goes up enough to overtake the tax credits entitlement.

BigAunty

SkyeKnight wrote: »

The ridiculous thing is that if the OP buys a house with her savings then they don't count again. I believe we are going to qualify for UC even though we have more than 10x £16k equity in our house.

Equity in a single owner occupied property has never been taken into account for means tested benefits so there is no change there. It's not like savings - equity can only be realised if the person sells their home! It's not really liquid.

However, equity in a second property, which is not currently taken into account for tax credits and means landlords with low incomes can qualify for state means tested benefits, will then get taken into account under UC.

We've seen equity rich but cash poor second home owners post their worries about this on the forum.

atlantis187

This is a breakdown of ur income/savings

Me 20k annual salary
Offset mortgage - about 100k outstanding
Savings - 42k
Wife redundancy pay - 13k

So will our child tax credits definately be stopped?

BigAunty

atlantis187 wrote: »

This is a breakdown of ur income/savings

Me 20k annual salary
Offset mortgage - about 100k outstanding
Savings - 42k
Wife redundancy pay - 13k

So will our child tax credits definately be stopped?

Under the current tax credits system, savings/capital are irrelevant with only interest above £300 needing to be declared, I believe. Hopefully another MSE poster will confirm that only the interest on your savings above £300 will impact your CTC to a degree.

Under UC, I doubt you'd get a bean.

Sixer

BigAunty wrote: »

Under UC, I doubt you'd get a bean.

No; under UC they would get exactly what they get under their current tax credit claim - until a significant change of circumstance or their UC entitlement was greater than the old tax credit claim.

Under a NEW UC claim, they wouldn't be entitled.

BigAunty

Sixer wrote: »

No; under UC they would get exactly what they get under their current tax credit claim - until a significant change of circumstance or their UC entitlement was greater than the old tax credit claim.

Under a NEW UC claim, they wouldn't be entitled.

Well, I understand there is transitional protection when UC is introduced so that originally no households suffer a reduction, how long and how this will be administered, I don't know.

But I wasn't aware that there is some kind of unlimited transitionary period for people with stonking savings until such time there is a change of circumstance and they submit a new claim....

atlantis187

Sixer wrote: »

No; under UC they would get exactly what they get under their current tax credit claim - until a significant change of circumstance or their UC entitlement was greater than the old tax credit claim.

Under a NEW UC claim, they wouldn't be entitled.

What do u mean by the above "significant change of circumstances"?
So if our circumstances and income/saving remain the same we will still continue to get the CTC?

parry_hotter

Calculation of capital and income
Capital
122. The capital rules in Universal Credit will generally follow the rules that apply now in existing benefits. The maximum capital limit for claiming Universal Credit is to be £16,000 for either a single person or a couple where that capital is held jointly.
123. Certain capital assets may be disregarded. These categories of capital include
•
premises;
•
business assets;
•
rights in schemes such as pension schemes, life insurance and funeral plans;
•
amounts earmarked for special purposes such as house purchases or essential repairs to property; and
•
payments made for arrears of, or compensation for late payment of, social security benefits




Taken from UC-draft regs memo2012

Sixer

BigAunty wrote: »

Well, I understand there is transitional protection when UC is introduced so that originally no households suffer a reduction, how long and how this will be administered, I don't know.

But I wasn't aware that there is some kind of unlimited transitionary period for people with stonking savings until such time there is a change of circumstance and they submit a new claim....

I gave the link to the briefing note PDF on transitional protection in my earlier post, Big Aunty. I also summarised it. But I can paste it for you if you can't be bothered to download it:

a) For many claimants, the Universal Credit will provide a level of support that is the same as, or higher than the current system. 2.7m households stand to receive a higher amount under Universal Credit than they do now. There will be no cash losers directly as a result of the migration to Universal Credit where circumstances remain the same.

b) The Government will provide cash protection to claimants whose Universal Credit award would be less than under the old system, in the form of an extra amount to make up the difference between the old and the new. The maximum amount will be fixed at the point of change, and will continue to be paid until the value of the award under the new system overtakes the levels of the pre-Universal Credit entitlement: paragraph 4 outlines what happens to the cash protection as the amount of a Universal Credit award changes.

c) The cash protection amount will not be uprated over time along with the rest of the entitlement, and the protection will cease if the award of Universal Credit ends or has to be reassessed for a significant change of circumstances. Any cash protection will not be applied to future claims.