Spending and gifting my savings whilst on income-related ESA

esaquestionforyou

(I'm on income-related ESA in the Support Group.)

I searched the web and the Decision Maker Guides "DMG Vol"s but couldn't find the answers the following questions:

As long as my total savings always remains below £6000, can I do absolutely anything with my money (spending and gifting) as long as I don't gain extra income? Or are there rules regarding what I can do with my money?

If there are rules can you give examples of amounts?

How much could I gift each tax year (6 April to 5 April) in a lump sum to each of my brothers to help with their high rents?

Is there a limit to how many gifts I can give out to people below £250 (I couldn't give any more gifts to either of my brothers if I give them lump sums could I?)?


If anyone knows the answer to these questions I would highly appreciate it if you could tell me them.

Thanks in advance

[Deleted User]

Giving your money away can be seen as deprivation of capital. Meaning they will still class it as if you had it and deduct from benefits accordingly.

Same goes for buying non essential items, flash new car for example. You'll be fine with day to day spending and replacing stuff as and when needed.

sheramber

It could be considered that you are giving money away to keep your savings below the £6000 limit to still get benefit.

esaquestionforyou

On youreable (youreable.com/forums/showthread.php/14987-Any-rules-on-what-I-can-spend-my-savings-on) RobcarerT said "Deprivation of capital does only apply to those with 6k or more. (Though I would assume it's actually more applicable to those with 16k +)

Anything less isn't counted and is therefor usable without having to notify the DWP etc.".

I also asked my questions on (forums.digitalspy.co.uk/showthread.php?p=84447331#post84447331) and Tiger Rag said "If it' under £6k, they don't care what you do with your money.".

There is a huge discrepancy between the answers you _shel and sheramber gave on this forum and the answers on those forums.

Can anyone answer the questions I asked with certainty what you are saying applies to me with savings always below £6,000?

marliepanda

Why don't you ask the DWP, the only people who can give you a definite answer, if you can continue to give the money given to help you to help pay your brothers rent.

Personally I would hope they would look into it, as if you can afford to subsidise the rent of your relatives then you do not need the money, and other people need it more.

Whether they do look into it, I don't know. But the only way to know for sure, is if you ask them Why don't you want to ask them?

esaquestionforyou

marliepanda wrote: »

Why don't you ask the DWP, the only people who can give you a definite answer, if you can continue to give the money given to help you to help pay your brothers rent.

Personally I would hope they would look into it, as if you can afford to subsidise the rent of your relatives then you do not need the money, and other people need it more.

Whether they do look into it, I don't know. But the only way to know for sure, is if you ask them Why don't you want to ask them?

I sent a letter to the DWP to the address a member of staff gave me, but they didn't reply. I am still waiting to hear back from them 3 months later.

Tommo1980

You can spend your benefits income on what you like. It is income, not capital....

Tom

tomtom256

If you are gifting it to keep your capital under £6k then this can be seen as doing it to keep benefits at the current rate and lose any by way of tarrif income if you have savings of between £6k - £16k.

Surely you need the benefit you receive to live on though?

Runa

This is about UC but the same rules apply;

"Deprivation of capital is when you knowingly reduce or transfer elsewhere your savings and other capital to get, or increase your Universal Credit. This may be before making a claim or during an existing claim."

about.universalcredit.service.gov.uk/kms/Pages/Deprivation_of_savings_and_other_capital.htm

If reducing your capital does not increase your benefits, then you have committed no offense. If you never go above £5,500 then you can do with it as you please. Between £5,500 and £6,000 you can still do with it as you please, but DWP will want to see your bank statements and will scrutinize them to see if you go even 1p over the £6,000 threshold. If you go 1p over £6,000 you will be considered to have £6,250 (they work in blocks of £250) and you would then be considered to have "notional income" of £1 per week for every £250 above the £6,000 threshold. £1 per week would then be reduced from your ESA(IR) accordingly.

Now, say you then give away £250 with the intent to reduce your capital back to £6,000 so that the £1 per week is no longer deducted from your ESA(IR). You have deprived yourself of capital with the intent to increase your benefits. Even though you were only 1p over £6,000, this is what will happen. So be very careful not to even get close to £5,500.

esaquestionforyou

Runa wrote: »

This is about UC but the same rules apply;

"Deprivation of capital is when you knowingly reduce or transfer elsewhere your savings and other capital to get, or increase your Universal Credit. This may be before making a claim or during an existing claim."

about.universalcredit.service.gov.uk/kms/Pages/Deprivation_of_savings_and_other_capital.htm

If reducing your capital does not increase your benefits, then you have committed no offense. If you never go above £5,500 then you can do with it as you please. Between £5,500 and £6,000 you can still do with it as you please, but DWP will want to see your bank statements and will scrutinize them to see if you go even 1p over the £6,000 threshold. If you go 1p over £6,000 you will be considered to have £6,250 (they work in blocks of £250) and you would then be considered to have "notional income" of £1 per week for every £250 above the £6,000 threshold. £1 per week would then be reduced from your ESA(IR) accordingly.

Now, say you then give away £250 with the intent to reduce your capital back to £6,000 so that the £1 per week is no longer deducted from your ESA(IR). You have deprived yourself of capital with the intent to increase your benefits. Even though you were only 1p over £6,000, this is what will happen. So be very careful not to even get close to £5,500.

Thank you so much, that clears everything up for me!

Bogalot

Runa's post does not clear anything up.

tomtom256 wrote: »

If you are gifting it to keep your capital under £6k then this can be seen as doing it to keep benefits at the current rate and lose any by way of tarrif income if you have savings of between £6k - £16k.

Surely you need the benefit you receive to live on though?

This is accurate. You could essentially never go above £6K but be in breach of the rules if intentionally giving away money to stay below that level. In such a situation you would be treated as if you still had the funds and your claim adjusted accordingly.