Income-based benefits and withdrawing money

lala2662

Hello, sorry I have a bit of a silly question but it's on my mind and I would like to know the answer.

Are you allowed to withdraw money from cash machines (cash points, ATM whatever you call those machines) while on income-based benefits? Sometime ago my mum had a situation when she was paying by card;- the cashier accidently charged her £800 instead of 80p because she put an extra 0 and then it was a hassle to sort out. Anyway ever since then she doesn't like to pay by card in shops, she withdraws £100-£200 every couple of days (as needed) to pay for food, hygiene products, heating (we have pay-as-you-go-meter) etc. Is this allowed? Or can the DWP accuse her of deprivation of capital because when you withdraw money from the cash machines it just says money withdrawn on bank statement not where the money is going? Should she collect all receipts from all grocery shopping? Or just for the bigger payments? like she withdrawn £1,000 a couple of days ago but she bought a fridge and a printer are purchases like that the only ones she should collect receipts? Or should she collect all receipts? Or is withdrawing £100-£200 every couple of days considered fine? 
Thank you 

MovingForwards

She can withdraw money and it's recommended receipts are kept for big purchases in case there's any problems with it or in this instance there's a DWP query.  Would she really need to withdraw £200 every couple of days for food and general shopping, as it would be a risk having the best part of £1400 sitting at home.

lala2662

MovingForwards said:

She can withdraw money and it's recommended receipts are kept for big purchases in case there's any problems with it or in this instance there's a DWP query.  Would she really need to withdraw £200 every couple of days for food and general shopping, as it would be a risk having the best part of £1400 sitting at home.

Thank you for replying and reading she usually withdraws around £500- £600 a month and it gets spend on the things mentioned above except this month, she withdrawn £1,000 but she bought a fridge and a printer 

poppy12345

£100 - £200 every couple of days is more than £500 - £600 a month. Regardless of that anyway, what she withdraws makes no different to her means tested benefits entitlement. Providing she has less than £6,000 (in any bank or at home) in total savings then it's ignored for means tested benefits.

MovingForwards said:

it's recommended receipts are kept for big purchases in case there's any problems with it or in this instance there's a DWP query.

I disagree, providing their savings are less than £6,000 they are ignored anyway so what you do with your money is your decision.

NedS

How a person spends their income is of no concern to DWP.

If a person has capital (above £6000) and is spending more than their income, and in so doing is reducing their capital, then there is the potential for DWP to consider deprivation of capital if they believe the claimant is knowingly reducing their capital for the purposes of claiming more benefits. In those circumstances they may be required to prove that their expenditure above their income is reasonable.

lala2662

poppy12345 said:

£100 - £200 every couple of days is more than £500 - £600 a month. Regardless of that anyway, what she withdraws makes no different to her means tested benefits entitlement. Providing she has less than £6,000 (in any bank or at home) in total savings then it's ignored for means tested benefits.

MovingForwards said:

it's recommended receipts are kept for big purchases in case there's any problems with it or in this instance there's a DWP query.

I disagree, providing their savings are less than £6,000 they are ignored anyway so what you do with your money is your decision.

Thanks for reading & replying.
She has less then £6,000 but my worry is;- can the DWP accuse her of withdrawing money to maintain her savings below £6,000? Because when withdrawing money it doesn't say where the money is going it just says money withdrawn on bank statement. That's why I'm thinking that collecting receipts is good but also at the back of my mind I'm like "come on it's crazy to collect every single receipt".

NedS

lala2662 said:

poppy12345 said:

£100 - £200 every couple of days is more than £500 - £600 a month. Regardless of that anyway, what she withdraws makes no different to her means tested benefits entitlement. Providing she has less than £6,000 (in any bank or at home) in total savings then it's ignored for means tested benefits.

MovingForwards said:

it's recommended receipts are kept for big purchases in case there's any problems with it or in this instance there's a DWP query.

I disagree, providing their savings are less than £6,000 they are ignored anyway so what you do with your money is your decision.

Thanks for reading & replying.
She has less then £6,000 but my worry is;- can the DWP accuse her of withdrawing money to maintain her savings below £6,000? Because when withdrawing money it doesn't say where the money is going it just says money withdrawn on bank statement. That's why I'm thinking that collecting receipts is good but also at the back of my mind I'm like "come on it's crazy to collect every single receipt".

As I stated above, if she has savings (capital) that is less than £6000, and she continues to spend her income in full each month, then her savings will never go above £6000. It is of no concern to DWP how she spends her income. She can withdraw her income in full in cash every month and spend it in the bookies or down the pub if she wants - it's her money to spend as she sees fit and there is nothing in the legislation that would give DWP the right to ask for details about how she chooses to spend her income.
Any income that is unspent at the end of the period then becomes capital.

slowcars

NedS said:

Any income that is unspent at the end of the period then becomes capital.

That's precisely why I posted my query. If she saves some of her benefits beyond the relevant period to pay a bill that will arrive in say 2/3 weeks' time and because of that her capital goes over the limit, then she will be subject to a deduction of her next benefit because of excess capital. Likewise, if you save say £50 a week to pay for a holiday next year and already have £6000 of capital then future benefits will be reduced until she brings down the capital with a payment to the travel agent in the months to come.

NedS

slowcars said:

NedS said:

Any income that is unspent at the end of the period then becomes capital.

That's precisely why I posted my query. If she saves some of her benefits beyond the relevant period to pay a bill that will arrive in say 2/3 weeks' time and because of that her capital goes over the limit, then she will be subject to a deduction of her next benefit because of excess capital. Likewise, if you save say £50 a week to pay for a holiday next year and already have £6000 of capital then future benefits will be reduced until she brings down the capital with a payment to the travel agent in the months to come.

That's correct. The first £6000 of capital is disregarded. Anything above that must be declared and will be taken into account.

tacpot12

I think your Mum only needs to keep receipts for large items, like a fridge, if these are purchased when her savings are above £6000.

Saving to pay bills is very sensible, but I doubt anyone on means-tested benefits have future bills that will exceed £6,000. 

slowcars

tacpot12 said:

I think your Mum only needs to keep receipts for large items, like a fridge, if these are purchased when her savings are above £6000.

Saving to pay bills is very sensible, but I doubt anyone on means-tested benefits have future bills that will exceed £6,000. 

This was relating to the fact that that if someone had up to £6000, say £5000 and then saved say £100 a month then once the £6000 was reached any further savings would be penalised.
Many people on benefits do have up to £6000 in savings. We have under £10,000 (the limit for pensioners). I have saved all of the COL payments which has pushed the savings to just over the limit. I have now been advised that COL payments are ignored by the DWP if you save them. Thankfully.