Is this counted as savings?

Chrissiew

My husband will not be returning to work due to health reasons, he is takinghis private pension early, it's not a lot compared to some but he will be getting just over £8000 lump sum then £93 per month.

Could we pay off our debts with the lump sum or would this be regarded as deprivation like savings? Our daughter has helped us out a lot, would we be able to give some to her with out getting into trouble?

sarahlouisesmith

I cant remember for sure but I think it does count as savings, I would check with CAB or directgov to be sure though as it gets confusing which benefits do what with savings and which count what.

midnight_express

Yes it counts as savings and if you get rid of it in order to claim benefits you will be treated as if you still have the money. The pension counts as income.

Chrissiew

Ok thanks for the replies, I will make sure it gets used properly

princessdon

You can only pay priority debts. Eg if on a repayment plan then you can't pay it all off etc.

your best bet is to ring them and get anything in writing they tell you.

luminated

This is an extract from BP1 - Assessment of capital - in connection with HB/CTB claims.


P1.703-P1.712
P1.703 A claimant should still be regarded as having deprived themself of a capital resource if they
have disposed themself of it by way of a gift to a third party. However, they should not be regarded as depriving themself of it if they did it to
HB(SPC) Reg 47; CTB(SPC) Reg 37
• reduce or pay off a debt they owe
• purchase goods or services the Decision Maker considers reasonable, given their circumstances, eg
– payments to reduce/pay off a debt, eg paying a credit card account or mortgage early
– for day to day expenses
– to improve their quality of life, eg buying a new kitchen or car
– for medical treatment
– for home repairs
– for a holiday

BigAunty

I was a bit baffled by the above statement as I'd always got the impression in my review of DWP literature that paying off a debt early was a big no-no and generally posters on this forum are warned off from doing this.

All the info quoted above by the previous poster is from the following document ( a revelation to me) so is sound. However, it is later at least partly contradicted later in the document so I suppose this accounts for why so many people on this forum have been told (probably incorrectly) not to pay off their mortgage early nor their loans.

"P1.732 When capital has been used to repay a debt give careful consideration as to whether the debt needed to be repaid at that time. If there was no legal obligation to do so then it may be that part of the claimant’s purpose was to obtain or increase the amount of benefit."

http://www.dwp.gov.uk/docs/hbgm-bp1-assessment-of-capital.pdf

luminated

If you Google - hbgm bp1 - the first on the list should be a download of this document. I accept Big Aunty's comments but would add if you pay off and plead innocence I have read that you wouldn't therefore have deliberately deprived yourself.

BUT .................. extremely hard to get a cast iron answer even when you read what they say in their own document :eek:

luminated

BP1 - Assessment of capital
P1.740-P1.759

Above a good part to read once pdf is downloaded.

Chrissiew

I was thinking of paying off a loan we have but to be on the safe side I will phone the DWP to ask if this will be ok, thanks everyone

luminated

Chrissiew wrote: »

I was thinking of paying off a loan we have but to be on the safe side I will phone the DWP to ask if this will be ok, thanks everyone

Please let us know what they say.