Low Income - No Benefits or Tax Credits Allowed!!!

lisboa84

How much could one pay into a pension before it crosses the line into deprivation of capital?

Perhaps overpaying on a mortgage is another option to quickly reduce savings but I assume that would also run the risk of being classed as deprivation of capital?

Or a combination of both of the above would be less conspicuous.

calcotti

lisboa84 wrote: »

Perhaps overpaying on a mortgage is another option to quickly reduce savings but I assume that would also run the risk of being classed as deprivation of capital? .

Under UC paying off debt is expressly not deprivation of capital. Mortgage is debt so paying down a mortgage should not, on the face of it, be treated as deprivation of capital. This is a change from legacy benefits for which paying off debt that was not immediately liable for repayment could be treated as deprivation of capital.

The Universal Credit Regulations 2013

Notional capital

50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person; or
(b) purchasing goods or services if the expenditure was reasonable in the circumstances of the person's case.

lisboa84

I guess this is a rather obscure scenario but just a thought (not applicable to the OP as he already has a mortgage);

-A low income family are renting a home, claiming UC, and saving money for a mortgage deposit.

-When their mortgage deposit savings reach 16k, presumably their UC payments 'should' be stopped.

-The rate at which they can save for their mortgage deposit has now slowed down due to less income with UC now stopped.

-They do buy a house eventually, could be months or years later.

-They have now spent their savings for their house deposit, and are now presumably re-eligible again for the UC (but at a lower rate at they won't be eligible for the housing benefit portion of UC anymore).

Spoonie_Turtle

lisboa84 wrote: »

I guess this is a rather obscure scenario but just a thought (not applicable to the OP as he already has a mortgage);

-A low income family are renting a home, claiming UC, and saving money for a mortgage deposit.

-When their mortgage deposit savings reach 16k, presumably their UC payments 'should' be stopped.

-The rate at which they can save for their mortgage deposit has now slowed down due to less income with UC now stopped.

-They do buy a house eventually, could be months or years later.

-They have now spent their savings for their house deposit, and are now presumably re-eligible again for the UC (but at a lower rate at they won't be eligible for the housing benefit portion of UC anymore).

Though by the time said family has saved up £16k - because remember they're on a low income, and UC does not give them ample extra money to be living in luxury so they don't have very much left over to be able to save - any children will have left home, the next benefit reform will have happened so UC will have been replaced by something even more harebrained, and/or they'll be pensioners

lisboa84

calcotti wrote: »

Notional capital

50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;

That still sounds like a contradiction where one could significantly overpay their mortgage in order to reduce their savings capital to below the UC threshold.

calcotti

lisboa84 wrote: »

That still sounds like a contradiction where one could significantly overpay their mortgage in order to reduce their savings capital to below the UC threshold.

Absolutely. On the face of it the legislation allows that.

lisboa84

Spoonie_Turtle wrote: »

Though by the time said family has saved up £16k - because remember they're on a low income, and UC does not give them ample extra money to be living in luxury so they don't have very much left over to be able to save - any children will have left home, the next benefit reform will have happened so UC will have been replaced by something even more harebrained, and/or they'll be pensioners

Yes good points.
I was thinking myself that the child/children could have left home by the time they had sufficient savings for a deposit.
Well to save 16k to trigger the UC to be stopped, would be akin to saving say £30.77 a week for 10 years, so they could have started saving even before a first child was conceived.
Unfortunately perhaps for a lot of low income families, it's not possible to save £30 a week when every pound is needed for food and shelter

Alice_Holt

thorsoak wrote: »

What are you saving for? How long do you think you will live? You could die tomorrow - and then what value your savings?

I've always believed in saving for a rainy day - and recognising when the rainy day arrives!

Oh - and btw - I'm a 76 year old widow, who is still working. The reason I'm still working? Because my income is £2.00 per week above the cut-off for pension credit ….£2 less and I wouldn't have to pay £118 per month council tax!

If you are still reading this thread, I think you should see if you have an entitlement (seems to the mot du jour) to council tax reduction with your local council.
https://www.gov.uk/apply-council-tax-reduction
I suspect you may find potential help if your income is c.£169 pw.

Spoonie_Turtle

lisboa84 wrote: »

Yes good points.
I was thinking myself that the child/children could have left home by the time they had sufficient savings for a deposit.
Well to save 16k to trigger the UC to be stopped, would be akin to saving say £30.77 a week for 10 years, so they could have started saving even before a first child was conceived.
Unfortunately perhaps for a lot of low income families, it's not possible to save £30 a week when every pound is needed for food and shelter

Indeed - I think many low-income families would be delighted to consistently have a spare £30 per month, let alone per week

singhini

OP, I don't want to rub salt into your wounds but if you were made redundant / unemployed and still had savings of over £16,000 you are also NOT entitled to free dentistry, free opticians , free prescriptions (unless you have a specific illness that qualifies you otherwise), legal aid or discount with council tax.

What you have failed to understand is the basics of being a politician i.e. its easier for politicians to support a benefits system rather than trying to create jobs (creating jobs is hard work, much harder than redistributing other peoples tax money). Remember, politicians need peoples votes to keep them in jobs.

Think about it, people on this thread are telling you that you are entitled to claim child benefit. However you could argue that no one should get child benefit (if you and your wife want children that's upto you, no government should give you £20 a week). However no politicians are going to suggest stopping child benefit as they would not get re-elected.

I've heard politicians justify the 40% and 45% income tax bands by saying "those with the broadest shoulders should carry the heaviest load". Yet the UK is the 2nd richest country in Europe and these same politicians have openly said that they wont pay the BRIXIT exit bill of £39+ billion and that we should leave the EU as we pay in more than we get out (pot calling the kettle black comes to mind).

Fundamentally life isn't fair, nor is life equal. a friend on mine earnt £75,000 a year thus paying out £25,000ish in income tax and NI and keeping roughly £50,000 as take home. when he was made redundant he got £73 a week for upto 6 months (and NI credits), thereafter he only was entitled to NI credits (even though he had paid a whopping £25k annually in just IT + NI). He too like you had not wasted his money and saved all his life. fed up with the system and the way he was being treated he never worked again (he found happiness knowing though he was no longer taking £50k home, he too was not giving the government £25k of his hard earnt money).

remember these words - the system is a vampire