Universal Credit and Savings - Dilemma!

Mk2Matt

Good morning all,
Long time lurker... first time poster!  This CV19 crisis is really testing my financial management!
Anyway, long story short by way of some context: My wife was made redundant just over 3 weeks ago (employer went into voluntary insolvency - clearly struggling more than they had let on!) and I work in a sales based job, PAYE and in excess of two thirds of my income is commission.  My employer won't furlough me as the work I do, no one else knows how to do, but it's not the new business side of things that I am currently doing, so I will only earn my basic income for the foreseeable.  We moved house last year and have approximately £13,000 on 0% credit cards which we save monthly to pay off by the end of the 0% period.  This means we currently have across all accounts approximately £11,000 in savings.

We have applied to Universal Credit as my wife now has no income and mine is dramatically reduced.  We had the phone interview at the weekend and whilst we have not have the figures confirmed, it doesn't sound like we're entitled to much support.

QUESTION: Is it wrong/morally wrong to use our savings now to pay off a large proportion of the credit card debt in order to 1) reduce our monthly outgoings by way of the minimum direct debit (currently about £300 pcm) and 2) by reducing our savings/available funds this would increase the amount of Universal Credit we are entitled to.
It feels frustrating to me that because we have managed our money well to date, including managed 0% debt and savings to pay this off we will then be penalised by reduced entitlement for support.  It had crossed my mind to transfer our savings to my parents in order to reduce our available funds - but I assume this would fall under some kind of misrepresentation?

This has ended up a much longer post than I had expected - if you're still with me, I welcome your thoughts.
DISCLAIMER - I have been 100% honest and upfront with UC and am not looking for a way to defraud the system, we just want to ensure that we are getting the most efficient and useful help during the next few months!

Be kind and stay safe out there people!

poppy12345

Paying off debt is not classed as deprivation of capital for UC purposes. There's a £4.35 per month deduction for every £250 or part there of that you have over £6,000. Under £6,000 is disregarded.

Mk2Matt

Hi Poppy,
Thank you for the quick and informative reply!  On that basis we will lose about £100 PCM in UC and keep the safety buffer of having the savings, for now worth the risk in my opinion.  Thank you.

tacpot12

Paying off the credit card debt and leaving yourself with £5,500 of savings will not reduce the amount you receive from UC, so I would do that. Use any spare income to keep paying down the credit card debt - you still have to pay another £2000 before the interest free period runs out so keep focused on that. 

Penelopa.Pitstop

What is classed as savings? Anything that you still have in your current account to cover this months payments or money in saving accounts?
Also, if someone finished the job at the end of March, but got paid with delay in April, how do you declare it to UC? Do you say you are unemployed from end of March or from date of last payment?

poppy12345

Penelopa.Pitstop said:

What is classed as savings? Anything that you still have in your current account to cover this months payments or money in saving accounts?
Also, if someone finished the job at the end of March, but got paid with delay in April, how do you declare it to UC? Do you say you are unemployed from end of March or from date of last payment?

All of your bank accounts are classed as savings. DWP get the information from real time information (RTI) no need to report earnings that are received, unless you're self employed.

Penelopa.Pitstop

I checked HMRC website and it looks like last payments were recorded on 03 April and 10 April, but they are for work done until end of March. How do you prove you are unemployed if you were umbrella worker and didn't get P45 at the end?