Voluntary redundancy payments over £16000

Shark1976

My company has decided that they are going to close our office and put everyone up for redundancy. I have an option to take voluntary redundancy which would be over £16000. I would like to use this money to pay off my debt. What I would like to know is can I take the voluntary figure, use it to pay off debt meaning my capital will be less than £6000 and still claim universal credit? Or is this not permitted?

TELLIT01

To claim UC the figure needs to be under £16k, not under £6k.  UC entitlement is reduced by £1 for every £250 between £6k and £16k.  Yes you can clear debts and that will not be classed as deprivation of capital, unlike income based legacy benefits.  Before reducing your capital check to see if you are entitled to Contribution based JSA

Shark1976

Thanks for your reply, this is my severance terms:

• One weeks pay: £644
• Statutory Redundancy Pay: £11298
• Notice Pay: £7731
• Ex Gratia Payment: £2792 (taxable)
• Total: £21820

Firstly would my Capital be the full £21820 (minus tax on ex gratia payment), or would it be £11298, based on Statutory Redundancy Pay?
Also would I be better off paying the debt before attempting to claim? The debt repayment would pretty much wipe out most of my redundancy figure. I did find this on Newcastle.gov site (I'm based in Surrey so not sure how applicable it is)


Any idea what the may terms might be?

I'd like to point out that my debt is made up of a loan and credit cards where payment records can be provided, and not debt to 'my mate Dave'. Maybe this is the may conditions they are referring to...

calcotti

Shark1976 said:

I did find this on Newcastle.gov site (I'm based in Surrey so not sure how applicable it is)


Any idea what the may terms might be?

As TELLIT01 has already said under UC paying off debt is not classed as deprivation of capital and will not affect your claim. You may be asked about the expenditure if it is identified so just make sure you keep all statements etc so you can evidence hat the money has been spent paying off debt.

Shark1976

Would anyone be able to provide a link to confirm that paying off debt does not classify as deprivation of capital?

Spoonie_Turtle

Shark1976 said:

Would anyone be able to provide a link to confirm that paying off debt does not classify as deprivation of capital?

Paragraph H1796 of ADM chapter H1 - I can't seem to copy the text on my phone but link to PDF is here https://www.google.com/url?sa=t&source=web&rct=j&url=https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/864936/admh1.pdf&ved=2ahUKEwjfgMTS0MzoAhUdTxUIHYMiCUMQFjAAegQIBBAB&usg=AOvVaw3CY2e0zMWOBaVK0ld071lM

calcotti

Shark1976 said:

Would anyone be able to provide a link to confirm that paying off debt does not classify as deprivation of capital?

The Universal Credit Regulations 2013, Regulation 50(2)(a)
https://www.legislation.gov.uk/uksi/2013/376/regulation/50

(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.

Shark1976

Thank you all for taking the time to reply, much appreciated.