Universal Credit And Savings

Al_Ross

My son who suffers from severe mental illness, and had to give up his part time job and drop out of University, recently started claiming Universal credit.

We opened a fixed term ISA some years ago. They benefits people have asked him when it matures, it is April.

The ISA is worth about £16,000. He does owe the University £3,000 in bursary money he was paid, which he has to repay.

Is he allowed to withdraw the ISA money and do as he pleases with it, and then claim universal credit again?

JamoLew

He can’t do what he wants with it, but paying off an existing debt would certainly be allowed

tomtom256

Search for deprivation of capital and this should explain the potential pit falls, he may face.

Billy_B_North

No, he’s expected to live off the savings. He can use it to pay debts which fall due, but if he blows it on frivolities he’s liable to be assessed as still having it for benefit calculations.

Spoonie_Turtle

UC can still be claimed with savings under £16000.  If the university debt can be repaid - especially if he can do it on the day he has access to the funds - and would take him under that threshold, he could continue claiming UC.  There would be a proportional deduction from his UC for the savings he would have over £6000.

TELLIT01

There does still seem to be a lot of confusion, particularly with people new to the benefit system, about how much savings you can have and still claim income related working age benefits.  Savings below £6k are ignored.  Savings between £6k and £16k will result in reduced benefit payment.  Savings of £16k and above means entitlement will cease until the figure drops back below £16k.

Al_Ross

TELLIT01 said:

There does still seem to be a lot of confusion, particularly with people new to the benefit system, about how much savings you can have and still claim income related working age benefits.  Savings below £6k are ignored.  Savings between £6k and £16k will result in reduced benefit payment.  Savings of £16k and above means entitlement will cease until the figure drops back below £16k.

What can savings be spent on and not be classed as deprivation of capital?

We put this money into an ISA so it woul get him a new car,now he is going to have to use it for his day to day living expenses,if he gets no other benifit,as he is unfit to work.

Seems so unfair,and a waste of time bothering to save.

Al_Ross

Billy_B_North said:

No, he’s expected to live off the savings. He can use it to pay debts which fall due, but if he blows it on frivolities he’s liable to be assessed as still having it for benefit calculations.

Unfortunately,as part of his illness he does blow lots of money on trivolies.

calcotti

Al_Ross said: What can savings be spent on and not be classed as deprivation of capital?

Can be spent in ways that are 'reasonable in the circumstances'. However this is decided on a case by case basis.

Spoonie_Turtle

Al_Ross said:

TELLIT01 said:

There does still seem to be a lot of confusion, particularly with people new to the benefit system, about how much savings you can have and still claim income related working age benefits.  Savings below £6k are ignored.  Savings between £6k and £16k will result in reduced benefit payment.  Savings of £16k and above means entitlement will cease until the figure drops back below £16k.

What can savings be spent on and not be classed as deprivation of capital?

We put this money into an ISA so it woul get him a new car,now he is going to have to use it for his day to day living expenses,if he gets no other benifit,as he is unfit to work.

Seems so unfair,and a waste of time bothering to save.

There are far cheaper cars he could buy that would not be closed as DoC!

As for his illness causing frivolous spending, if he is unable to manage his money he should have somebody to manage it for him (I can't think of the word right now).

TheShape

Spoonie_Turtle said:

As for his illness causing frivolous spending, if he is unable to manage his money he should have somebody to manage it for him (I can't think of the word right now).

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