Benefits and savings

rorysdad

Hi

I believe that you can qualify for certain benefits - but must not have more than £16,000 in the Bank in savings?

What exactly does that mean?

If you had no savings but suddenly, for instance inherited say £20,000 which went into your Bank account - and you immediately spent, say £5,000 of that money - is the balance of £15,000 classed as 'savings' or is the original £20,000 classed as savings?

One figure puts you below the threshold and the other above...

RD

marliepanda

Depends entirely what you 'immediately spend' that £5000 on. You can't purposefully deprive yourself of money to claim benefits, but there are certain things you could get.

In most cases benefits are reduced between £6000 and £16000, so even with £15000 you'd get few of these benefits

rorysdad

Thanks Marliepanda. Suppose you spent £5,000 on a car what would the position likely be?

Its as if once you have the money that puts you over the threshold you are not allowed to spend it!

RD

marliepanda

rorysdad wrote: »

Thanks Marliepanda. Suppose you spent £5,000 on a car what would the position likely be?

Its as if once you have the money that puts you over the threshold you are not allowed to spend it!

RD

It's not 'as if' that at all. Buying a £5k car could be possible, but why a £5k car when there are plenty of decent second hand options for 2k-4K for example.

baza52

5k on a car is hardly a lot.
I would not imagine it would be defined as extravagant spending under Deprivation rules.
My 5k car I got 6 weeks ago wasn't.

dippy3103

Which benefits do you have in mind?

TELLIT01

Savings are only of interest if the claim is for Income Related benefits, if claiming on the basis of National Insurance contributions savings are ignored.
I don't think spending £5k on a car would be viewed as excessive either, unless you already had a perfectly roadworthy vehicle . That might raise questions!
It's not really true that you would "get few of these benefits" if you had £15k savings. At just under £16k savings your entitlement to ESA, for example, would drop by £40 as your benefit is reduced by £1 for every £250 over £6k. As a single person you would still receive £33 on assessment rate ESA, and receiving one benefit often opens doors to other things. Not a lot I admit, but if you are in a position of having to claim benefits every penny counts.

pathtofreedom

Not all benefits are means tested eg PIP/DLA so you'd need to look at the rules for each to see what the thresholds are. I believe some reduce after 6k then stop at 16k. As for spending some of it, again it would depend on what and if it is seen as deprivation of capital depending on the rules for each one.

GirlFromMars_2

rorysdad wrote: »

Hi

I believe that you can qualify for certain benefits - but must not have more than £16,000 in the Bank in savings?

What exactly does that mean?

If you had no savings but suddenly, for instance inherited say £20,000 which went into your Bank account - and you immediately spent, say £5,000 of that money - is the balance of £15,000 classed as 'savings' or is the original £20,000 classed as savings?

One figure puts you below the threshold and the other above...

RD

If someone were to hypothetically inherit money, then choose to spend it while claiming benefits then the best option is to talk to the DWP before spending any money.

Write to the Benefits Center as soon as possible, explaining the situation & what you intend to spend money on and ask if you are allowed to spend it or if it will be classed as Deprivation of Capital.

If you deprive yourself of capital you will be classed as having notional capital, ie as if you had the money anyway.

baza52

a car is unlikely to be considered deprivation of capital, nor is replacing old appliances, carpets, furniture etc. It is also ok to have a non extravagant holiday.

tazwhoever

Or what if a druggie who doesn't have money suddenly gets 20k and blows it on drugs?