universal tax credits

chelsea15

When the new universal tax credits comes in do they take a childs savings in to account , my son is disabled and we have been saving for his future .he now as £7000 in his account but me and my husband who works have only £6000 between us this is our emergency fund for any thing that might occur .we at the moment do get tax credits .but surely they cant include my sons savings any advice would be appreciated please no negative responsed thankyo

benefitbaby

Hi, when Universal Credit comes in the take into account you and your husband's savings but not any for you child (assuming they in an account for which he is the primary account holder).

Universal Credit is not 'universal tax credits' this is because UC is a working age benefit for people in and out of work and it includes housing cost help. It is replacing all the working age means-tested benefits.

bloolagoon

benefitbaby wrote: »

Hi, when Universal Credit comes in the take into account you and your husband's savings but not any for you child (assuming they in an account for which he is the primary account holder).

Universal Credit is not 'universal tax credits' this is because UC is a working age benefit for people in and out of work and it includes housing cost help. It is replacing all the working age means-tested benefits.

Surely that means everyone can just put their savings into the child's name?

benefitbaby

bloolagoon wrote: »

Surely that means everyone can just put their savings into the child's name?

No... if the operative purpose of putting your savings into an account in the name of a child is to gain or increase benefit this is deprivation of capital and the DWP can treat you as still owning the capital.

The OP stated she had always saved into her child's account (separate to her savings) and for his future because he has a disability - this is her operative purpose.

bloolagoon

benefitbaby wrote: »

No... if the operative purpose of putting your savings into an account in the name of a child is to gain or increase benefit this is deprivation of capital and the DWP can treat you as still owning the capital.

The OP stated she had always saved into her child's account (separate to her savings) and for his future because he has a disability - this is her operative purpose.

But many parents have savings in children's names for university etc.

With other benefits they look at if you can access the money.

So I assume they'd at least look at 3 years worth of bank accounts to see if someone put a lump sum in around this time?

benefitbaby

It boils down to who is the owner of the money, if the OP has saved the CB (for example) which is paid for the child into an account for the child then it is the child's money.

If the parent saved into their own account with the future plan of uni costs then this money belongs to the parent.

DWP would not dig further unless there was a fraud allegation or there was some other reason to doubt a benefit claim e.g. person claims benefit in 2010 and at that time has £8k in the bank, they end the claim in 2011 and then re-claim in early 2012 and have no capital left, this would warrant questions.

sosad1968

I was advised that, unless the childrens' money was in a junior ISA which I couldn't access, the money WOULD be counted as capital for UC.

So, if the childrens' money is in a building society account in the child's name but held in trust by a parent (which is what most people do) it would be counted as capital?

I am not sure what the right answer is!

sammyjammy

sosad1968 wrote: »

I was advised that, unless the childrens' money was in a junior ISA which I couldn't access, the money WOULD be counted as capital for UC.

So, if the childrens' money is in a building society account in the child's name but held in trust by a parent (which is what most people do) it would be counted as capital?

I am not sure what the right answer is!

If it is accessible by the parent then it is treated as the parents savings.

chelsea15

Thankyou everyone but until this comes into force .i dont think anyone is completly sure .

benefitbaby

The UC Regulations 2013 have been published and in respect of capital they mirror the existing rules that apply in means tested benefits... children's capital is not counted.

Capital is detailed at regulations 18 and 45-50

Shiloe

sosad1968 wrote: »

I was advised that, unless the childrens' money was in a junior ISA which I couldn't access, the money WOULD be counted as capital for UC.

I agree if you could walk into the bank and withdraw the money then you have access to it therefore any money you put into a junior ISA is legally your childs and you cannot touch the money it is legally handed to them at 18

sosad1968 wrote: »

So, if the childrens' money is in a building society account in the child's name but held in trust by a parent (which is what most people do) it would be counted as capital?

Yes it would be