Some questions on IR ESA/DOC

frenetic_2

Hi, I have been trying to find out here and on many other sites exactly what counts as income/capital in relation to Income Related ESA and saving limits, its incredibly complex and it would be great if there was a sticky as I see others are having problems.


anyway, my questions

what is income/capital in relation to ESA and savings limits?

Is housing benefit classed as income or capital, I really can't see it as such as it goes out the same month and many claimants never see it anyway as it goes straight to landlord


Is DLA classed as income, how do they assess it, eg someone posted they only include at end of month?

http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS81_Calculating_income-related_Employment_and_Support_Allowance_fcs.pdf?dtrk=true

Age Uk says DLA not counted as income.


deprivation of capital questions?

just paid one annual disability car insurance in one go, saved money doing it, surely not DOC

going on uk holiday for a week, again surely not DOC?

tx

Horseunderwater

Capital can be a lump sum that sits in an account or ISA for example. Or it can be another property or land that has a capital value other than the home you live in. Even stocks and shares.
DLA is not classed as income for income related benefits at all. It is ignored.
Housing benefit is not capital it is money that goes to pay the rent - this year it is via the tenant in 99% of cases as some idiot in Whitehall thought that would be a good idea.
Taxing a car is not DOC it is just part of the expense to running a car.
So for IR ESA if you have a lump sum sitting in a bank account, but it is below £6k then you do not need to worry. However if you have between £6k and £16k then DWP deduct £1 per £250 of capital held until you get to the £16k where no ESA would be payable as you would be deemed to have enough to live on for a while with careful money management. So if you had savings of say £8k - they would take away £8/week off your ESA.

enabledebra

Neither HB or DLA are income for ESA. Both could potentially turn into capital if left unspent in your account for a prolonged period but otherwise not.

Deprivation of capital- capital has to have been spent with the intention of getting more benefit - just spending it isn't a problem unless the DWP decide you've done it (at least as a significant factor) to get more ESA,. That's why what you spend it on can be an issue. The things you've mentioned wouldn't generally ring their alarm bells but any spending of capital which leads to more ESA can in theory raise questions. Keep receipts etc.

You can find easily digested info on all DWP regs here including income/capital rules http://www.dwp.gov.uk/publications/specialist-guides/decision-makers-guide/

frenetic_2

Hi, tx for reply, housing benefit goes into current account as does DLA, does this mean the two amounts are completely ignored when assessing level of savings/capital?

car insurance not tax

is a holiday classed as DOC

what about wage payments to carer, is this classed as income but going out, really is complex

enabledebra

frenetic wrote: »

Hi, tx for reply, housing benefit goes into current account as does DLA, does this mean the two amounts are completely ignored when assessing level of savings/capital?

car insurance not tax

is a holiday classed as DOC

what about wage payments to carer, is this classed as income but going out, really is complex

Are the wage payments coming from 'direct payments' or 'independent living fund' or from your own pocket eg from your DLA?

frenetic_2

HI, from my DLA

frenetic_2

btw, I am quite angry about this, when I consulted CAB awhile ago to clarify this, they never informed me HB and DLA are not counted as income or capital, etc when assessing the 6,000 limit.

Horseunderwater

http://www.moneysavingexpert.com/family/benefits-check This calculator will help you sort out what you're entitled to and will tell you approx. how much etc. It is really easy to complete.

enabledebra

Ok. There's no account taken of what your outgoings are so your income is your income without knocking off expenditure but DLA is ignored as income anyway.

The amount sitting in your account is capital but any money in there that's been recently paid in from benefits is disregarded- they disregard it for the period it's supposed to cover so as long as your spending it as it comes in it's ignored as capital but if you 'save' it it counts towards your total capital.

A holiday isn't usually considered deprivation unless it can be shown to have been done specifically to get your capital down to get more benefits. So blowing all your savings on a world cruise might raise questions but they would have to judge that you probably did it to get more benefit before it's deprivation.

enabledebra

frenetic wrote: »

btw, I am quite angry about this, when I consulted CAB awhile ago to clarify this, they never informed me HB and DLA are not counted as income or capital, etc when assessing the 6,000 limit.

It is counted as capital if you've saved it up rather than spent it though.

rogerblack

frenetic wrote: »

btw, I am quite angry about this, when I consulted CAB awhile ago to clarify this, they never informed me HB and DLA are not counted as income or capital, etc when assessing the 6,000 limit.

This is not correct.
If you pay out HB and spend DLA before the next installment - it does not count as capital.

If you leave it sitting in your account - it does. (though clearly, in the case of most HB - paying it would not be deprivation!)

Capital is - broadly - anything you have of value that you can sell, or sell the rights to, that is not a personal posession, your home, or some limited exceptions.

Everything else - ISAs, money saved in bank accounts, savings accounts with really high penalties, cash, second homes, a bit of land you own in france, gold bars - is capital.

One wrinkle - income is never capital. Income becomes capital after the end of the period it's paid for.
You get DLA every two weeks - this is income, and is not relevant to capital.
At the end of the two weeks, any unspent DLA becomes capital. (Same as any HB if there is any left over after paying your rent).
There is no 'for a prolonged period' - as the next installment comes in - any prior unspent income becomes capital.

If you have under £6K in capital at any time - this is all pretty academic. It's only relevant if you have between 6 and 16K, for most income-based benefits.