Savings and benefits

calcotti

poppy12345 said:

OP when your savings drop below £16,000 the usual deductions will apply so for every £250 or part there of over £6,000 there's a £4.35 per month deduction in UC.

As I understand it, the deduction applies anyway (base date on £16,000) but is taken into account as part of the transitional protection.

poppy12345

calcotti said:

poppy12345 said:

OP when your savings drop below £16,000 the usual deductions will apply so for every £250 or part there of over £6,000 there's a £4.35 per month deduction in UC.

As I understand it, the deduction applies anyway but is taken into account as part of the transitional protection.

Thanks. I'm trying to get my head round all these rules for managed migration but it's all rather confusing, especially with the savings/capital rules.

calcotti

poppy12345 said:?Thanks. I'm trying to get my head round all these rules for managed migration but it's all rather confusing, especially with the savings/capital rules. 

Me too!   

Spoonie_Turtle

calcotti said:

Spoonie_Turtle said: Looking back at the wording, it's "capital in excess of £16,000" so does that mean they get the full deduction for capital between £6,000 and £16,000 anyway?

Yes, but the transitional protection will take that into account.

Ah right, yes I'd forgotten that.  So am I understanding correctly, they'll make the calculation including the deduction for savings, then the TP will top up to the previous level of benefits? 

Then over time any reduction in savings (between £6k-£16k) and thus a lower deduction and higher UC award will be something that erodes the TP.  

calcotti

Spoonie_Turtle said:

Ah right, yes I'd forgotten that.  So am I understanding correctly, they'll make the calculation including the deduction for savings, then the TP will top up to the previous level of benefits? 

That’s my understanding.

Spoonie_Turtle said: Then over time any reduction in savings (between £6k-£16k) and thus a lower deduction and higher UC award will be something that erodes the TP.  

I don’t think so. A savings reduction increases the UC payable but doesn’t actually increase any other UC element and therefore will not reduce the transitional element.

jobe1972

I went and read all the rules so think I now know how it works.. If when I swap over and i have 20k banked they will ignore the 4k for the first year providing the amount I have saved doesnt drop below 16k anything above that will be ignored for a year at least... then the rules will apply for the 6k to the 16k so would lose £174 per month if I continued to have 16k plus in the bank. once the savings then drop below 16k the amount of UC would then be adjusted each period assume per month ..until eventually savings dropped below the 6k mark then UC would be award at its full amount of what I would be entitled too

kaMelo

jobe1972 said:

I went and read all the rules so think I now know how it works.. If when I swap over and i have 20k banked they will ignore the 4k for the first year providing the amount I have saved doesnt drop below 16k anything above that will be ignored for a year at least . then the rules will apply for the 6k to the 16k so would lose £174 per month if I continued to have 16k plus in the bank. once the savings then drop below 16k the amount of UC would then be adjusted each period assume per month ..until eventually savings dropped below the 6k mark then UC would be award at its full amount of what I would be entitled too

Not quite, the capital disregard is twelve months maximum. If after twelve months you still have in excess of £16000 then all means tested benefits will end.

calcotti

But you will get transitional protection in your UC starting amount to cancel out the deduction for the savings between £6000 to £16,000 (and any other transitional adjustment necessary).

jobe1972

kaMelo said:

jobe1972 said:

I went and read all the rules so think I now know how it works.. If when I swap over and i have 20k banked they will ignore the 4k for the first year providing the amount I have saved doesnt drop below 16k anything above that will be ignored for a year at least . then the rules will apply for the 6k to the 16k so would lose £174 per month if I continued to have 16k plus in the bank. once the savings then drop below 16k the amount of UC would then be adjusted each period assume per month ..until eventually savings dropped below the 6k mark then UC would be award at its full amount of what I would be entitled too

Not quite, the capital disregard is twelve months maximum. If after twelve months you still have in excess of £16000 then all means tested benefits will end.

yeah I knew that just didnt make it clear when i posted 

kaMelo

I don't think that's quite  right, the way the rules are written is like a double gotcha.

If savings drop below £16000 within twelve months transitional protection ends. If they don't then affect twelve months all means tested benefits will end.

The only way I can see is to reduce savings below £16000 prior to migration, transitional protection will then apply unless savings go over £16000.