Applying for UC

Katykat

My daughter was made redundant 10 months ago. Since then, her only income has been £67.25 a week carers allowance ( for me). She has been living off her savings because she has been job hunting and thought her unemployment would be short lived. Because of the present situation, she has accepted that her position may be longer than anticipated and has applied for UC.I have been giving her some money towards her mortgage and food but her savings have now reduced to £7700. As this is above £6000, her benefit has been calculated and reduced by £7 pw ( as they assume she is earning that much interest- obviously NOT). I advised her to pay £1700 off her mortgage but she is worried that this could be viewed as deprivation of assets. Could it? I would have paid this anyway even without bringing UC into the picture as interest on savings is much less than interest on mortgage, but she feels that savings gives her a sense of security. 

calcotti

Paying off debt is not deprivation of capital for UC. This is written into the UC legislation.
https://www.legislation.gov.uk/uksi/2013/376/regulation/74

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.

Re the deduction for savings the £7/week is not assumed interest. It is assumed interest and using the capital to support the claimant with £6000 being considered a reasonable savings reserve to maintai without having to spend it on daily living.