Universal Credit when savings over £16000 reserved for house purchase

Woggle1

I would appreciate any help that can be given please?

My son left university last year with a good masters degree, but cannot get a job anywhere. There does not seem to be much demand for zoologists. He has no money to live on so after his six months of JSA applied for UC. His application was refused since he has more than £16000 in savings. He needs money to live. His savings have been accumulated due to small inheritances and savings by us which we gave him when he reached 18. It was always his and our intention to save this money and use it for a house deposit. It has been squirrelled away in long term savings, help to buy ISAs, lifetime ISA etc since he is not yet ready to buy a house. The money is not readily available to him, without penalties.

Apparently according to UC he is supposed to use his savings to live on. The money is not readily available to him and moreover was always intended for a house deposit, not to live on.

Even if he could get at the money he can't simply give his savings away, or spend it, to get UC, because that would be considered deprivation of capital. Buying 10 years of beer supplies is a no no apparently. Apparently expenditure on living expenses to deplete the capital is OK, but starting to charge rent when he has previously been allowed to live at home for free (as he had no job) would also be deprivation of capital. Charging back rent is also a no no I'm told, because it would simply be being done to deplete his capital so he could get UC. That would be true as we would no doubt give the money back to him should he need it to buy a house.

All of this seems so unfair. If he, or us, had spent our money on booze and women he would have had no savings and be eligible for UC. Because he, and us, have been responsible no support is available when it is desperately needed! I imagine this is a common issue.

Does anyone have anyway that my sons savings can be legally depleted, but retained, so that he can receive UC? He doesn't have any debts, except his student loan which of course is not really a debt and anyway he doesn't' have to repay anything while he has no income.

Thanking you in advance for any help you can offer.

calcotti

It doesn’t matter what the money is ‘intended’ for. It is capital and is taken into account. If it is more than £16,000 a UC claim cannot be accepted. The value of the ISAs will be adjusted to take account of the penalty charges for early withdrawal.
A lot of people have been affected by this at the present time. 

TheShape

I can't offer any help but if you are not charging rent for him to live at home and are presumably not charging for the use of utilities he should be able to live very frugally to avoid dipping into the savings to any great extent.  Paying for food (unless you are prepared to also feed him) and the cheapest possible phone contract (so as to be available for contact by employers) should be the only necessary costs.

Life might be a bit dull for him but then the only options for having money for discretionary spending are dipping further into the savings or getting a job (any job) to fund that.

GHolmesAdmin

Woggle1 said:

I  

All of this seems so unfair. If he, or us, had spent our money on booze and women...

 

Firstly women are not a commodity.
Secondly if you are unhappy with the situation perhaps remember your disappointment when deciding how to vote next time.

John_

Why do you think that the state should pay him benefits when he has the means to support himself?

If his degree is genuinely good (Oxbridge, Imperial, or a few others) then he should be able to get a graduate position in banking, accountancy or law.

elsien

If there is little demand for zoologists then he needs to widen his job search criteria. The longer he's unemployed for, the harder it will be to get work especially since he's now about to compete with a new set of graduates.
Surely any job is better than none if he does not wish to live off his savings? 

declan199210

Woggle1 said:

I would appreciate any help that can be given please?

My son left university last year with a good masters degree, but cannot get a job anywhere. There does not seem to be much demand for zoologists. He has no money to live on so after his six months of JSA applied for UC. His application was refused since he has more than £16000 in savings. He needs money to live. His savings have been accumulated due to small inheritances and savings by us which we gave him when he reached 18. It was always his and our intention to save this money and use it for a house deposit. It has been squirrelled away in long term savings, help to buy ISAs, lifetime ISA etc since he is not yet ready to buy a house. The money is not readily available to him, without penalties.

Apparently according to UC he is supposed to use his savings to live on. The money is not readily available to him and moreover was always intended for a house deposit, not to live on.

Even if he could get at the money he can't simply give his savings away, or spend it, to get UC, because that would be considered deprivation of capital. Buying 10 years of beer supplies is a no no apparently. Apparently expenditure on living expenses to deplete the capital is OK, but starting to charge rent when he has previously been allowed to live at home for free (as he had no job) would also be deprivation of capital. Charging back rent is also a no no I'm told, because it would simply be being done to deplete his capital so he could get UC. That would be true as we would no doubt give the money back to him should he need it to buy a house.

All of this seems so unfair. If he, or us, had spent our money on booze and women he would have had no savings and be eligible for UC. Because he, and us, have been responsible no support is available when it is desperately needed! I imagine this is a common issue.

Does anyone have anyway that my sons savings can be legally depleted, but retained, so that he can receive UC? He doesn't have any debts, except his student loan which of course is not really a debt and anyway he doesn't' have to repay anything while he has no income.

Thanking you in advance for any help you can offer.

Unfortunately you can’t have your cake and eat it.

Tell him to apply for any jobs going in the meantime. McDonald’s, KFC or even warehouse’s. 

A job is a job, it’s far easier to get one once you’ve got one 

Galloglass

Student loan is a debt and savings can be used to pay down debt - and to use your phrase "legally depleted". 

He will, of course, retain the funds over a period by not having to repay the loan (or the additional interest) a second time.

huckster

Reasonably priced car so he can travel to any workplace and not rely on public transport would be good use of money. Opens up potential for night shifts at local warehouses etc.

calcotti

Galloglass said:

Student loan is a debt and savings can be used to pay down debt - and to use your phrase "legally depleted". 
He will, of course, retain the funds over a period by not having to repay the loan (or the additional interest) a second time.

Given that the majority of student loans are expected to be cancelled before they are paid off then paying down the loan doesn’t necessarily make sense. The amount of the repayments required (when the earnings threshold is crossed) is not affected by the amount outstanding.

Galloglass

Given that the majority of student loans are expected to be cancelled before they are paid off then paying down the loan doesn’t necessarily make sense.

Sense in what sense?

Without wishing to drift into a discussion on policy and whether the taxpayer should be stiffed for a cost (which is they OP's original question about UC) there is no guarantee that the debt won't become payable if the rules on income are changed.

It also raises the question implied by the OP which is what is the value of a degree which doesn't generate an income sufficient to pay of a loan on such generous terms.