Universal Credit & over the £16,000 threshold

rebecca_uk2019

Hi all,
I'm just after some advice and a few questions to my current situation.  I was made redundant beginning of January and I'm currently on contributions based JSA for a period of 6 months - this should end 10th of July roughly.
I was not eligible for Universal Credit as I had £15,500 in a savings bond that is due to be released on June 28th.  I also had some cash in my current account, taking me over the £16,000 threshold.

I was hoping to be back into work sooner than this, but all my job offers fell through due to COVID-19, and I don't suspect I'll be back in work any time soon, so I'm going to have to switch over to Universal Credit.  I'm wondering if I'm going about this the right way, and if there's anything I should be aware of?

When I get access to the bulk of my savings, I'm using it to pay off a number of debts - credit cards and phone contract - this should bring my overall capital to around £13,000.  I don't want it to look like I'm artificially reducing my capital so I can claim more, I'm just getting rid of my debts, I'm assuming that is OK?

I've done the calculator and the amount I'll be receiving from UC won't cover my living expenses at that rate as I'll only be getting a certain percentage, but I'm wondering how do they calculate my capital?  Obviously as time goes on my capital will reduce as I'm spending on living costs..

• Do I have to declare each month how much I have or do they have access to my bank to check automatically?
• Has anyone experienced any problems of DWP being fussy about wanting to know where your capital has gone? 
• Should I put in a claim now, despite not being eligible, and then make them aware of the circumstances later - or just wait until my circumstances are in a position where I'm eligible?
  

Thanks for any help! Much appreciated.

Spoonie_Turtle

Under UC rules paying off debt is allowed.

I hope there are others who can answer your questions about how it works with having over £6000 in savings, but I can tell you there's no point applying until you are under the threshold - if you apply now then you'll just be rejected due to being ineligible.

[Deleted User]

With UC you can use capital to pay off debt, over £6,000 in saving you will see your UC reduced by £4.35 for every £250 or £17.40 per £1000, its in your interest to report when your savings fall.

NedS

You are allowed pay off debts and that will not be judged as deprivation of capital, so first clear any debts you have before making your claim.

A decision will be made on the amount of capital you have on the date you make your claim. You can notify UC monthly of changes to capital, on the first day of each assessment period and the amount of capital you have will need to be determined. If the difference seems reasonable, they will likely accept it. If it is deemed unreasonable, then they will refer it to a decision maker to make a decision. The decision maker will ask you to account for where the capital has gone in order to be able to make an informed decision where or not it is reasonable.

Do not make a claim now if your capital is still over £16k as it will be closed as not eligible.

huckster

You just declare the actual capital savings and investments you have when you start the claim. 

Yes it is perfectly acceptable to pay down debts you have, which would reduce your capital.  No DWP do not trawl through Bank statements looking at why you spent the amounts, unless they feel it is warrated  They will see examples of people who had say £30,000 available 6 months before claiming UC and then suddenly at the start of the UC claim the capital is down to only £10,000.  They will then ask for details of how the £20,000 was spent. This is just an example.  It is always wise to keep details of how you spend any capital savings, just in case you are ever asked for details.

Do not register a UC claim until the capital available is below £16000, as the claim will be closed. 

rebecca_uk2019

That's awesome, thank you for your advice.  Hopefully I have nothing to worry about - finger's crossed I won't be on UC too long anyway!