Proving what is not capital for the Pension Service

slowcars

Over the past few weeks, I am having to show that our capital has never exceeded £10,000.
First of all I am informed that income paid say weekly has to be spent by the end of the following week. Fortnightly payments have to be spent by the end of the next two weeks. Monthly by the end of the next month and so forth.
We keep the maximum savings down to £10,000 so as to avoid being penalised.
All of our bills etc are paid by DD monthly on the same day each month generally between the 19th and 21st with a big one coming out on the 1st of the month
It's almost impossible to not build up income to pay the monthly DD's on how we should spend our income.
Is there some magic formulae on how we should do this? Should we draw out the money not spent by the end of the relevant period and put it in a box under the bed? Then when a DD comes up for payment pay in some of the cash to cover it?

Robbie64

If you are always close to £10,000 can you not reduce your capital by a modest amount which removes the problem? Is there nothing you need to buy that costs a few hundred pounds?

whizzywoo

Apparently any Cost of Living payments you have received will not count towards capital thresholds for means tested benefits.

Spoonie_Turtle

whizzywoo said:

Apparently any Cost of Living payments you have received will not count towards capital thresholds for means tested benefits.

That's an excellent point, especially as someone on Pension Credit will be getting at minimum the £650 CoL + £5/600 WFP/CoL,  + likely the £150 CT rebate and maybe £150 disability CoL.  That's well over £1,000 to be disregarded.

NedS

Not sure for Pension Credit (but I assume it's similar as for UC), but I believe the UC regs allow CoL payments to be disregarded indefinitely whereas any payments that fall under energy help schemes (e.g, the £150 CT rebates or the £400 energy rebates) are disregarded for 12 months. So not all payments are disregarded equally. One would need to check the relevant legislation for details.

slowcars

whizzywoo said:

Apparently any Cost of Living payments you have received will not count towards capital thresholds for means tested benefits.

Are you sure? The DWP notes on the budget only refer to the payments not being taxed or used for the benefit cap. No mention has been made as far as I can see that these payments will not count towards capital if they are saved.

slowcars

Robbie64 said:

If you are always close to £10,000 can you not reduce your capital by a modest amount which removes the problem? Is there nothing you need to buy that costs a few hundred pounds?

Our income continues to cover all day to day expenses and bills with maybe a £50/£100 excess per month which we try to spend on things that would be nice to have such as a new coat, shoes etc. We no longer have a car and because of health difficulties we do not have an outside social life. If we need to go somewhere we use the bus (free).

Spoonie_Turtle

slowcars said:

whizzywoo said:

Apparently any Cost of Living payments you have received will not count towards capital thresholds for means tested benefits.

Are you sure? The DWP notes on the budget only refer to the payments not being taxed or used for the benefit cap. No mention has been made as far as I can see that these payments will not count towards capital if they are saved.

Explicitly stated in the legislation https://www.legislation.gov.uk/ukpga/2022/38/section/8/enacted
(This refers to the CoL payments, not energy £150/£400 support.)

slowcars

Great that seem to cover it then. So if you save all of COL payments and in doing so exceed the capital limit of £10,000 the extra savings are not to be treated as capital

poppy12345

slowcars said:

Great that seem to cover it then. So if you save all of COL payments and in doing so exceed the capital limit of £10,000 the extra savings are not to be treated as capital

Correct.

slowcars

slowcars said:

Great that seem to cover it then. So if you save all of COL payments and in doing so exceed the capital limit of £10,000 the extra savings are not to be treated as capital

Brilliant and thanks. That really is a worry that I no longer have. Now waiting for the £500 heating allowance that will go straight into the savings account!