What can money/savings be spent on for ESA purposes?

gray1404

Family member has recently received backpayment of Council Tax due to council tax exemption being applied. Is there any guidance on what he can and cannot spend it on so that it won't become regarded as savings for the purposes of Income based ESA?

Thanks.

[Deleted User]

gray1404 wrote: »

Family member has recently received backpayment of Council Tax due to council tax exemption being applied. Is there any guidance on what he can and cannot spend it on so that it won't become regarded as savings for the purposes of Income based ESA?

Thanks.

It is savings regardless and needs to be declared but can be spent on reasonable day to day living expenses

TELLIT01

If the repayment leaves savings at below £6k it needs to be reported but won't affect benefit. Above £6k benefit will reduce by £1 for every £250 over £6k. For example savings of £6999 would reduce benefit by £4 per week.
Money can be spent or replacement of items like worn carpets, redecorating, replacing aging 'white goods'. Try spending it on 50" flat screen TV with all the knobs and whistles and questions would be asked, and it would probably be treated as deprivation of capital.

Ames

TELLIT01 wrote: »

If the repayment leaves savings at below £6k it needs to be reported but won't affect benefit. Above £6k benefit will reduce by £1 for every £250 over £6k. For example savings of £6999 would reduce benefit by £4 per week.
Money can be spent or replacement of items like worn carpets, redecorating, replacing aging 'white goods'. Try spending it on 50" flat screen TV with all the knobs and whistles and questions would be asked, and it would probably be treated as deprivation of capital.

CIS suggests on another thread that it's disregarded for a year as it's benefit back pay.

TELLIT01

Ames wrote: »

CIS suggests on another thread that it's disregarded for a year as it's benefit back pay.

It still needs to be reported if it takes savings over the £6k limit. If DWP don't know the source it can create problems further down the line.

baza52

Book yourself a nice foreign holiday in the sun and update your car. Both are alowable expenses.

gray1404

baza52 wrote: »

Book yourself a nice foreign holiday in the sun and update your car. Both are alowable expenses.

Seriously? lol

gray1404

As well as replacing things around the house that are aged e.g. carpets and white goods or say a bed... would clothes also be acceptable to spend the money on? Are receipts required or not?

baza52

gray1404 wrote: »

Seriously? lol

Yes

You are allowed to have a holiday abroad and you can certainly buy a car. I bought a car for 5k and had no problems with DOC.

Ames

gray1404 wrote: »

Seriously? lol

Yes and no. There are no hard and fast rules, it all depends on circumstances. Inherit 25k and blow the lot on a brand new car, unlikely to be ok. Spend 5k on a second hand car and a grand on a family holiday, probably ok.

It basically comes down to what's reasonable. Case in point this thread - Tellit doesn't think a 50" smart TV would be reasonable. I was looking at buying one last week and I don't think £420 on a new TV is unreasonable (assuming your old one is a few years old).

Clothes - if you're walking around in ten year old primark stuff full of holes then it's ok to replace. If you're walking around in six month old Armani, then it's not. With a whole load of grey area in between.

I'd say that spending on mid-range stuff will probably be ok, but keep receipts. Remember, deprivation of capital is about intent.

It's impossible for anyone on here to say yes or no, it's down to the decision maker who looks at your claim.

gray1404

And I think that's the worrying thing. It is down to the decision maker so you really just don't know.

Being totally realistic though. I had a look round his flat today and the following is 100% true (i.e. without any lies and I would swar on a bible). The carpet is old and worn out, his mattress and bed is about 10 years old and could do with being replaced. He does not have a cooker, just a second hand microwave and a second hand fridge and washing machine (family pass downs basically). Could also do with things like some more plates and cups etc...

All of his clothes are either really cheap or from various charity shops. That is to be honest (and I hope he doesn't read this ever) the area he needs to smarten up in. So, if it is reasonable, if we could go out and get him some nice new "mid range" clothes it would be great. But I would only want to do this with him if it would not come back to bite us by a difficult decision maker.

I decided to take some pictures today of the flat as proof of the condition its in. I think I am just treading very carefully here because want to do everything according to the rules.