Benefits & Savings

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Hi,

I am in the process of moving in with my partner. We are set to complete a joint claim imminently.

My problem, if I can call it that, is I have around £9,000 savings, saved from working. Now if I have worked this out correctly, due to the fact that between us we will be working less than 24 hours at the moment (she has a 3 year old and is pregnant, I've had my hours reduced, unfortunately), we will get Child Tax Credit and Child Benefit in full, but a reduced amount on Housing Benefit and Council Tax Support (I can fully understand this, I'm not complaining about that).

What would happen if I spent some of money? For example, once I move in I would like to spend some of my savings on new furniture or decorating or a car. Would I have to contact my local authority for every £250 I spend, therefore the HB and CTS altering by a pound or so every week? And if I spent my savings and went below the £6,000, would I then receive the full support? I would hate, for example, to have spent my money but then my claim still being treated as though I still have the savings i.e. getting £500+ reduced per year because I had savings but now don't.

I don't mean to sound ungrateful, I know I am fortunate enough to have some money put away, but I don't want to be afraid to spend it. I don't want to be in the position where I have spent my money but am still getting a reduced rate of benefits because I used to have savings, if that makes any sense.

Ideally I will be able to get more hours or another job to come off HB & CTS altogether but this is the situation I am in at the moment.

Any advice would be much appreciated.
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Comments

  • rogerblack
    rogerblack Posts: 9,446 Forumite
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    In principle, expenditure done for 'prudent' reasons is OK.
    Expenditure, where a significant purpose is to increase benefit entitlement is not.

    Yes, if you - for example - spend the excess on a holiday to Disneyworld - you may - if it is held that that was not reasonable - be treated as still having this money, and some or all benefit reduced.
    (until the 'notional' capital is reduced by not being paid the benefit in question you would otherwise have been entitled to)

    Purchase of - for example - an inexpensive second-hand car to replace one that had irretrievably broken down as it would enable you to get to work - may be reasonable.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
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    You can spend it on essentials and what you've stated are essentials just don't give your money away. Keep receipts just in case.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • w00519772
    w00519772 Posts: 1,297 Forumite
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    Does your house have furniture at the moment? Do you have a car at the moment? If so, then I would wait until I got "more hours or another job" before buying new expensive items. That is just my opinion. I am no expert.
  • pmlindyloo
    pmlindyloo Posts: 13,051 Forumite
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    Even if you had less than £6000 in savings then since you are working it is unlikely that you would get full HB and CT support as your income would be taken into account.

    Put your details into the benefit calculator on https://www.entitledto.co.uk to see what you may be eligible for. You can try different scenarios.

    Can you get another part time job to up your hours?
  • Pete1054
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    I can assure you I am not trying to claim anything more than I am entitled to. If I were trying to play the system, I would spend my savings now before doing this or not declare anything.

    So if for example I took my partner and child on a holiday which cost £3,001, leaving me with £5,999 and I contacted the authorities stating my savings were now below the £6,000 threshold, they would deem that unreasonable and pay me a reduced rate based on still having £9,000?

    Is there a list of what is acceptable and isn't? Could I buy furniture, driving lessons, a car, decorating expenses, Christmas presents? Would I always need to keep receipts and/or bank statements?

    The house does have furniture, but at some point in the future it would be nice to replace some things in the house. For example, I am learning to drive, money in my savings goes towards driving lessons and eventually car expenses.

    I have done the Entitledto calculation. I would never receive full HB and CT but the difference between what I would get with no savings and the savings I have now is over £500 per year.


    Sorry if a lot of that information seems a bit short, it isn't meant to. I don't have a problem with the system, I would just like to know where I stand.

    Thanks.
  • Pedent
    Pedent Posts: 150 Forumite
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    What you aren't allowed to do is deprive yourself of capital in order to increase your benefit entitlement. If you make your spending decisions with no thought of the impact of your benefit entitlement, then in theory you should be okay.
  • tomtontom
    tomtontom Posts: 7,929 Forumite
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    Spending £3,000 to increase your benefit entitlement by £500 is more than a little silly, especially considering you may not even be claiming for that long.
  • rogerblack
    rogerblack Posts: 9,446 Forumite
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    tomtontom wrote: »
    Spending £3,000 to increase your benefit entitlement by £500 is more than a little silly, especially considering you may not even be claiming for that long.

    This is 624 pounds per year.
    But - this is for one benefit only.
    If you're claiming three means-tesed benefits - for example - HB, JSA, CTS, this would be 1872/year.

    (thresholds vary in some cases)
  • konark
    konark Posts: 1,260 Forumite
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    I'm afraid there isn't a definitive list of what's allowed and what's not., it's up to the individual 'Decision Maker' . But I've heard that cars and holidays have been allowed., certainly you could spend some money on the baby's room. You can always ask the LA or DWP if spending some money on a certain item would be considered deprivation or not; get it in writing though!
  • Pete1054
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    Thanks for all the help!

    I went to CAB in the end and for the things I'd want to spend money on, deprivation of capital is unlikely to be an issue.

    One thing I forgot to mention to CAB and I'd like to ask is this:

    I have around £9,000 in savings. My partner, on the other hand, has no savings and has £1,000 debt. Now, I don't mind paying that off, clean slate and all that, but that would obviously reduce my savings to £8,000. Am I able to use my savings to pay that off (that's not deprivation of capital, is it?) and do I declare the £9,000 first or not?

    Basically, her ex (the child's father) left her in a bit of a financial mess and is paying it back at £20 per month. Obviously, this will take a long time to pay off. I have savings sitting there and having paid this off for her we can get along on a clean slate under one roof and any communication between my partner and her ex would be purely regarding the child and nothing else getting caught in the cross fire. It's a bit galling paying off his debt, but if I can afford it and for an easy life, is it not worth it?

    Thanks for all the help so far and any more is greatly appreciated.
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