Univeral Credit & Child Savings Accounts

atlantis187

With the new universal credit system coming in next year and being aware your not entitled to any money if u have over £16k saving.
Will I get penalised if I dump a load of money into my 2 sons savings account which I have with halifax (save4it).
The account is in their name but I am the trustee so will the money be considered as mine or my childs?
For child tax credit surpose.

princessdon

Sadly (as peronally I think it should) it appears not to at the moment, but whether that will change is anyone's guess.

xylophone

If you put money into your children's accounts then you have given the money to those children - you hold it as bare trustee for them and the capital and interest is theirs - you would no longer have the right to spend it or use it as though it were yours.

Another point re interest arising on the money - it will be taxed at your highest marginal rate if it exceeds £100 per child per annum - this is cumulative. http://www.hmrc.gov.uk/tdsi/children.htm
http://bank.virginmoney.com/savings/find/little_rock_access_account_issue_2/things-to-remember/

http://www.dwp.gov.uk/docs/uc-draft-regs-2012-memorandum.pdf page 25

atlantis187

It doesnt bother me handing the money over to my child.
The interest on the account is around 2% so if each child had around £10k in the both accounts will it take the interest over the £100

Sorry still alittle confused. This is the scenario

Me & wife = Savings under 6k
Children x2 with their own savings accounts me as trustee savings of over £10k each.

Would me and the wife still be entitled to universal Credit?

Pedent

The draft regulations say that Universal Credit will treat capital in the same way as Income Support does currently. I don't know a lot about Income Support, but I believe that there's a mechanism for penalising parents with children who have more than £3k in savings, but that it rarely applies because the element of Income Support that this refers to was replaced with Child Tax Credit, which doesn't take any capital into account at all. So it's all a bit unclear at the moment...

However:

If you move your savings into your children's accounts in order to become eligible for Universal Credit, then either the money is still yours or it isn't.

If it's still yours, then you'll still have capital over the limit, and so you still won't be eligible.

If it isn't, then you won't have capital over the limit, but under the "deprivation of capital" rules you will have 'notional' capital over the limit, and so you still won't be eligible, at least initially (although, of course, you may well not get caught).

If you want to do this by the book, then see paragraph 129 of http://www.dwp.gov.uk/docs/uc-draft-regs-2012-memorandum.pdf: "A person is not to be treated as depriving themselves of capital if they repay debts or make reasonable purchases of goods or services."

spikeripley

so basically between you your wife and kids will have 26000 or there abouts and you still want more ie benefits :eek:

SkyeKnight

If you put the money in a Child Trust Fund or Child ISA (so that you have absolutely no way to access it) then I have read that it doesn't count.

I'm not sure about other accounts but if it is just a normal building society account that you could withdraw money from then I can't see how they wouldn't count that - obviously it would be a gigantic loophole in the capital rules.

atlantis187

So where would be the best place to put the money? (baring under the mattress)

atlantis187

This Tory government has really screwed people up with theese changes of policy. We have worked really hard all our life saved every penny we could and now we are getting penalised for it. Its a joke

I really hope they don't get re elected next time

Pricivius

Am I missing something? Why do you need to put the money anywhere? If you have too much, you should use it to live on and you don't need benefits. Surely that's a good thing?

skintandscared_2

atlantis187 wrote: »

This Tory government has really screwed people up with theese changes of policy. We have worked really hard all our life saved every penny we could and now we are getting penalised for it. Its a joke

I really hope they don't get re elected next time

How are you getting "penalised"? By being expected to live off the money you've worked so hard for and saved?