Benefits questions

MouldyOldDough

As far as DWP are concerned if someone has £25k savings and needed to reduce this to £16k in order to claim Universal Credit

Surely they could argue that spending £9k on a car, necessary to get to work would be acceptable? 

Which got me thinking 

What is the cut off point for acceptable spending and what is the difference between savings / investments and previously purchased items such as jewellery as far as DWP are concerned? 

I understand that someone with say £50k in the bank would not be entitled to any benefits but what about a £50k car or a £20k watch already owned? 

arnoldy

but what about a £50k car or a £20k watch

What sort of person would be foolish enough to have a 50k car and/or 20k watch when they have less than 16k savings? But I suspect for the purposes of benefits that's not counted. 

[Deleted User]

To be blunt I would say they are cheating the system!!

KxMx

Purchasing a car to get to work is acceptable yes, but a £9k car? Definitely not.
I applied for UC recently and was asked about bank accounts and if I had more than £100 in cash. No other questions about valuables. 

poppy12345

Firstly for savings of £16,000 there will be a reduction of £4.35 per month for every £250 or part there of over £6,000. Only a decision maker can decide whether purchasing a car for £9,000 is deprivation of capital.

Having a £50,000 car shouldn't affect benefits, the car maybe on a lease or PCP, if so then the car wouldn't be theirs. Can't answer the question about the watch.

After all that, whether there's any entitlement to means UC will totally depend on their circumstances.

nannytone_2

You have answered your own question. Spending money in order to claiìm benefit Is what the deprivation of capital rules are all about.

MouldyOldDough

arnoldy said:

bruut what about a £50k car or a £20k watch

What sort of person would be foolish enough to have a 50k car and/or 20k watch when they have less than 16k savings? But I suspect for the purposes of benefits that's not counted. 

Plenty of people have cars and other belongings that they have owned for years before needing to go on to benefits for on reason or another - perhaps, as in this case, a divorce leading to a fresh start where the person has bought a property that needs considerable money being spent on it to make it habitable - and now has a low paying job with some savings

These are serious questions

All that I am trying to find out is how DWP actually apply their Deprivation rules

I was just using "valuables" as an example of pre-owned things

And I would like to ask KxMx - if the claimant is "not allowed" to spend £9k on a car -  how much is acceptible and why that amount ?

kaMelo

There is no defined method,  if there were some would use that to game the system, people are very imaginative.  There was a post sometime ago about investing in rare/valuable coins as a way to hide money,  because of that creativity questions are asked that may seem ridiculous to most people yet they have to be asked to deter that creativity.

What is reasonable and common sense would be a good question to apply.

MouldyOldDough

Where's the cut off ?

Obviously purchasing a gold bar and sticking it under the floorboards is going to far - but what about a lifetimes stamp collectiion or an extension on a property that had been planned for years ?

NedS

MouldyOldDough said:

arnoldy said:

bruut what about a £50k car or a £20k watch

What sort of person would be foolish enough to have a 50k car and/or 20k watch when they have less than 16k savings? But I suspect for the purposes of benefits that's not counted. 

Plenty of people have cars and other belongings that they have owned for years before needing to go on to benefits for on reason or another - perhaps, as in this case, a divorce leading to a fresh start where the person has bought a property that needs considerable money being spent on it to make it habitable - and now has a low paying job with some savings

These are serious questions

All that I am trying to find out is how DWP actually apply their Deprivation rules

I was just using "valuables" as an example of pre-owned things

And I would like to ask KxMx - if the claimant is "not allowed" to spend £9k on a car -  how much is acceptible and why that amount ?

There are no hard set limits. A decision maker will make a decision based upon what is reasonable in that individual claimants circumstances. For example, for a fit and healthy claimant, spending £3000 on a car to get to work may be reasonable. That amount may be more or less depending if the job requires a 5 mile drive to work each day or a 100 mile daily commute each way. For a disabled person, spending a lot more on a car may be reasonable once adapting the vehicle to suit their disabilities has been taken into account.

So the question the decision maker will ask themselves is, given your circumstances, could you reasonably have bought a car cheaper than the one you purchased suitable for the job in hand, and does the vehicle you purchased represent reasonable value for money (i.e, you haven't contrived to overpay for the vehicle to deprive yourself of capital).

Would it be reasonable for someone with only £16k in savings and no other means of supporting themselves to spend £10k on a car when they could have purchased a £3k car that is likely equally reliable and suitable for the intended purpose. There are no exact figures, but hopefully you get the idea.

MouldyOldDough

NedS said:

MouldyOldDough said:

arnoldy said:

bruut what about a £50k car or a £20k watch

What sort of person would be foolish enough to have a 50k car and/or 20k watch when they have less than 16k savings? But I suspect for the purposes of benefits that's not counted. 

Plenty of people have cars and other belongings that they have owned for years before needing to go on to benefits for on reason or another - perhaps, as in this case, a divorce leading to a fresh start where the person has bought a property that needs considerable money being spent on it to make it habitable - and now has a low paying job with some savings

These are serious questions

All that I am trying to find out is how DWP actually apply their Deprivation rules

I was just using "valuables" as an example of pre-owned things

And I would like to ask KxMx - if the claimant is "not allowed" to spend £9k on a car -  how much is acceptible and why that amount ?

There are no hard set limits. A decision maker will make a decision based upon what is reasonable in that individual claimants circumstances. For example, for a fit and healthy claimant, spending £3000 on a car to get to work may be reasonable. That amount may be more or less depending if the job requires a 5 mile drive to work each day or a 100 mile daily commute each way. For a disabled person, spending a lot more on a car may be reasonable once adapting the vehicle to suit their disabilities has been taken into account.

So the question the decision maker will ask themselves is, given your circumstances, could you reasonably have bought a car cheaper than the one you purchased suitable for the job in hand, and does the vehicle you purchased represent reasonable value for money (i.e, you haven't contrived to overpay for the vehicle to deprive yourself of capital).

Would it be reasonable for someone with only £16k in savings and no other means of supporting themselves to spend £10k on a car when they could have purchased a £3k car that is likely equally reliable and suitable for the intended purpose. There are no exact figures, but hopefully you get the idea.

This person works as a carer so needs a 100% reliable car but that's besides the point - the real issue is the home - what if she spends a fair amount on the house (double glazing, heating etc etc) - will that be viewed as deprivation of capital ?