On universal credit - received a tesco loan and paid it all out same day - how will i be affected?

calcotti

TELLIT01 wrote: »

Are the savings rules different for UC to ESA, IS etc? If not, this is incorrect as savings between £6k and £16k result in reduced payments, but entitlement only ceased when £16k is reaches.

I overlooked the amount referred to. The rules for UC in respect of amounts are the same as for legacy benefits and are as you say. There is a UC reduction of £4.35/month for every £250, or part thereof, over £6,000 until the threshold of £16,000 is reached.

yksi

calcotti wrote: »

That is not correct. If you have money in your account it is generally treated as yours for UC regardless of what it is intended for.
While the money is in your account you own it. The fact that a debt is owed to a lender is not relevant. However UC allows you to pay back that debt, regardless of when repayment is due, without treating this as deprivation of capital.

H1098 A legal owner of a bank account is the beneficial owner of any money in the account which has been lent or given to the legal owner by another person.

Your case where you are holding money for someone else is different if the money came from them in the first place. It can be treated as ‘in trust’ and therefore you are not the beneficial owner. Holding money for someone is not the same as borrowing it with an obligation to pay it back in the future. Nonetheless DWP might wish to investigate your capital in order to decide whether or not you are the beneficial owner which will determine whether or not it is taken into account.

That's an interesting perspective. I was specifically told that as I have a debt to my family member, I should not count it as an asset. The money in question was tied up in a property, which is now sold, and I was told by UC that when the money came to me (which it now has) I should only declare any amount over the amount that I owed. :think:

calcotti

yksi wrote: »

That's an interesting perspective. I was specifically told that as I have a debt to my family member, I should not count it as an asset. The money in question was tied up in a property, which is now sold, and I was told by UC that when the money came to me (which it now has) I should only declare any amount over the amount that I owed. :think:

There are specific provisions that allow money tied up in property to be disregarded for periods of time depending on the circumstances. It may be these provisions that were relevant rather than the fact that you had a debt.

TELLIT01

calcotti wrote: »

It will make no difference. Had you kept the money in your account it would count as capital. However your UC entitlement is based on your situation on the last day of your assessment period so given the money has already gone out it will not be taken into account.

Are you actually saying that somebody could receive a large inheritance the day after a UC assessment, give it all away before the end of assessment period, and continue to receive UC without any risk of a Deprivation of Capital investigation?

calcotti

TELLIT01 wrote: »

Are you actually saying that somebody could receive a large inheritance the day after a UC assessment, give it all away before the end of assessment period, and continue to receive UC without any risk of a Deprivation of Capital investigation?

No, not at all. Deprivation of Capital rules could of course apply. However in the case of OP they have said that all of the money has been used to pay off debt and the rules are clear that paying off debt is not deprivation of capital.
What I was saying that had the OP delayed paying off the old debt, such that the new money was still in their account at the end of the UC assessment period, then it would have been counted as capital notwithstanding that it was borrowed with the intention of paying off other debt.

TELLIT01

calcotti wrote: »

No, not at all. Deprivation of Capital rules could of course apply. However in the case of OP they have said that all of the money has been used to pay off debt and the rules are clear that paying off debt is not deprivation of capital.
What I was saying that had the OP delayed paying off the old debt, such that the new money was still in their account at the end of the UC assessment period, then it would have been counted as capital notwithstanding that it was borrowed with the intention of paying off other debt.

Thanks for the clarification. I had forgotten that it's OK to pay off debts under UC when that wasn't always the case with the legacy benefits.