LCWRA and Using & Saving Money

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Heyo!

I applied for UC in 2019 when I left full time undergraduate education and I've been on LCWRA and the Housing Component since I started receiving payments in 2020. I'm now 27 and I've since finished my part time Masters in Biotech.

My genetic disability essentially ensures that regular employment without very lenient expectations wouldn't really be feasible for me and also entities me to pretty much every disability benefit I can find, which I am already the recipient of.

Currently UC pay for my adapted and energy efficient council flat and bills. I have most of my food intake via medical overnight feed, a care package from NHS England Continuing Healthcare, I don't drink, smoke, go out much and my hobbies are very inexpensive. That being said, I have no other income.

The result of all of this is that I'm effectively a rich pauper. I'm usually somewhat above the £6000 savings limit (£7-9000) and haven't been reassessed since I signed on. I'd like to be able to save more to... well I don't know what yet. Invest in something worthwhile I suppose. I'm currently just finding things that I can "waste" money on: kitchen equipment, computer upgrades, furniture, an as of yet unplanned holiday... all things I use but it's terribly unfulfilling and only ever a short term "firefighting" measure to avoid the dreaded £16000 threshold.

I'd really like to know what I can and can't do with my money without getting into trouble. Thanks to anyone who responds!
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Comments

  • Muttleythefrog
    Muttleythefrog Posts: 19,821 Forumite
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    edited 1 February 2023 at 12:06AM
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    Firstly you need to report holding savings above £6k... technically that which resides after a period of benefit payment (e.g. that held the day before new payment of U/C). The £16k threshold is when income related entitlement ends (things like PIP are not means tested so unaffected) but U/C will be affected by savings above £6k. Are you aware of this and the need to report your savings levels affecting entitlement?

    Investments for the most part will count as capital. The rules on depriving yourself of capital to gain benefits can be subjective and complicated..... one person's normal requirement might be luxurious extravagance to another.

    It's hard to otherwise advise.... perhaps holidays... social life.... can spend on those.... potentially look to change situation like thinking of some self employed type work you could do that you would enjoy and can invest in.... Universal Credit could be affected. 

    Others will have better advice... but primarily my concern is you may not be aware of the savings issue and your responsibility to report levels.... as that could indeed land you in trouble. Secondary I think how to reasonably spend your excess income that benefits you such as through leisure... but I understand the issue as faced it myself when not very active.
    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
  • TheDJMC
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    Firstly you need to report holding savings above £6k... technically that which resides after a period of benefit payment (e.g. that held the day before new payment of U/C). The £16k threshold is when income related entitlement ends (things like PIP are not means tested so unaffected) but U/C will be affected by savings above £6k. Are you aware of this and the need to report your savings levels affecting entitlement?

    Investments for the most part will count as capital. The rules on depriving yourself of capital to gain benefits can be subjective and complicated..... one person's normal requirement might be luxurious extravagance to another.

    It's hard to otherwise advise.... perhaps holidays... social life.... can spend on those.... potentially look to change situation like thinking of some self employed type work you could do that you would enjoy and can invest in.... Universal Credit could be affected. 

    Others will have better advice... but primarily my concern is you may not be aware of the savings issue and your responsibility to report levels.... as that could indeed land you in trouble.
    I just asked on a separate website literally minutes ago and was informed of that so yes (they didn't really answer my actual question because of it). I was under the assumption that it was up to them to reassess your case on a regular basis. Like I say, I have no other income so it's not like I thought of this as stealing or anything.

    I guess I'm 
    depriving myself of capital to gain benefits... but I didn't have any to begin with and if I don't have the UC I'll be destitute. I can't both invest in capital and not invest though.

    I'd like to work in that way but I can be bedbound for months at a time when ill and I don't really have any skills other than writing academic reports. It's the stability that concerns me. I'm just really worried that if I get a job for 6 months they'll use it against me when I inevitably fall ill again.
  • poppy12345
    poppy12345 Posts: 18,097 Forumite
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    TheDJMC said:
      I was under the assumption that it was up to them to reassess your case on a regular basis. Like I say, I have no other income so it's not like I thought of this as stealing or anything.


    No idea where you got that from but it's not correct. How can DWP assess you when they don't currently know you have savings above £6,000. It's your responsibility to report all changes. Part of your claimant commiments is to report all changes, this includes savings./capital above £6,000. However, if you don't report the changes they will eventually find out.
    TheDJMC said:

    I guess I'm 
    depriving myself of capital to gain benefits... but I didn't have any to begin with and if I don't have the UC I'll be destitute. I can't both invest in capital and not invest though.


     You may not have had savings/capital when you started claiming UC but you do now. Once your savings reach more than £16,000 entitlement ends.

    Although your UC will reduce by £4.35/month for every £250 or part there of over £6,000, you have your savings which you can use.

    There's no rules on what you can and can't spend your savings on, providing you don't buy the most expensive things. One thing that's not classed as deprivation of capital for UC is paying off any debt which you may have as this is allowed under UC rules.
  • Muttleythefrog
    Muttleythefrog Posts: 19,821 Forumite
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    edited 1 February 2023 at 1:22AM
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    TheDJMC said:
    Firstly you need to report holding savings above £6k... technically that which resides after a period of benefit payment (e.g. that held the day before new payment of U/C). The £16k threshold is when income related entitlement ends (things like PIP are not means tested so unaffected) but U/C will be affected by savings above £6k. Are you aware of this and the need to report your savings levels affecting entitlement?

    Investments for the most part will count as capital. The rules on depriving yourself of capital to gain benefits can be subjective and complicated..... one person's normal requirement might be luxurious extravagance to another.

    It's hard to otherwise advise.... perhaps holidays... social life.... can spend on those.... potentially look to change situation like thinking of some self employed type work you could do that you would enjoy and can invest in.... Universal Credit could be affected. 

    Others will have better advice... but primarily my concern is you may not be aware of the savings issue and your responsibility to report levels.... as that could indeed land you in trouble.
    I just asked on a separate website literally minutes ago and was informed of that so yes (they didn't really answer my actual question because of it). I was under the assumption that it was up to them to reassess your case on a regular basis. Like I say, I have no other income so it's not like I thought of this as stealing or anything.

    I guess I'm depriving myself of capital to gain benefits... but I didn't have any to begin with and if I don't have the UC I'll be destitute. I can't both invest in capital and not invest though.

    I'd like to work in that way but I can be bedbound for months at a time when ill and I don't really have any skills other than writing academic reports. It's the stability that concerns me. I'm just really worried that if I get a job for 6 months they'll use it against me when I inevitably fall ill again.
    U/C is reassessed each month but you are responsible for reporting changes in circumstances such as savings regarding affected benefits like U/C - that is a commitment you are effectively signed up to. I am also getting LCWRA.. in my U/C account as will be the case for yours it will state in your commitments
    • complete all activities in my to-do list
    • report changes to my circumstances promptly, including changes to work
    It's a potentially serious situation which is why probably like here they were distracted by focus on that issue when responding to you. You could be deemed to be committing fraud if you are gaining benefits (or gaining more than entitled to) as a result of not informing them of changed circumstances you are required to inform them of. If capital is between £6k and £16k it would diminish the amount you get. If this has been happening then before advising on spending excess benefits you might need some professional advice on dealing with that matter.

    The issue of deprivation is a real one to consider.... but hard to define beyond unreasonable expenditure that is with attempt to gain benefits. Also worth reminding that capital is considered more broadly than just money in accounts.

    I certainly get the employment concern you have and medical advice should be king on that along with your own understanding of condition and realities. I was thinking more perhaps for example if you were creative in mind you could make things and irregularly sell. It's difficult otherwise to advise.... some claimants around these boards have faced the issue of how to spend income when they actually have quite cheap lives at a basic level.... holidays and helpers to accompany are one example of things that crop up. 


    "Do not attribute to conspiracy what can adequately be explained by incompetence" - rogerblack
  • Spoonie_Turtle
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    You may find it useful to know that what you spend your income on is of no concern to DWP.  Although if you invest it, it then becomes capital in the next assessment period anyway.

    The rules around deprivation of capital apply if you spend your savings, once they are savings, with the intention of depleting them to retain/increase benefit entitlement.  But spending income in the period in which you receive it - so monthly for UC, 4 weekly for PIP - has no restrictions whatsoever, even if it's specifically to prevent the accumulation of savings.  You could literally give substantial amounts of your income away before it became savings if you wished, you just can't hold onto it and still be entitled to means-tested benefits once savings go above £16,000 whether that's in cash or in investments.

    The one form of savings that would be ignored would be an official pension pot, although there is a limit to how much you can pay into one if you're not working.


    With wanting to work, I say the following purely in case you are interested in possibly pursuing anything, absolutely no implication that anyone *should* be trying to do anything:  many disabled and chronically ill people have managed to make freelance suit them.  It doesn't suit everyone (me included, I have far too little brainpower), but I thought I'd mention it just in case.  There are also volunteering opportunities, especially now that nondisabled society has seen some of the benefits of remote access for themselves.  This blog post might be of interest https://www.lifeofpippa.co.uk/2018/10/20/finding-accessible-work-with-a-chronic-illness/
  • TheDJMC
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    No idea where you got that from but it's not correct.
    I never claimed it was. I've already explained I've just been corrected today. Funnily enough it might've been by you now that I see your username.
    There's no rules on what you can and can't spend your savings on, providing you don't buy the most expensive things.
    And what does that nebulous category include??

    One thing that's not classed as deprivation of capital for UC is paying off any debt which you may have as this is allowed under UC rules.
    Wait... isn't that a giant loophole?
     If this has been happening then before advising on spending excess benefits you might need some professional advice on dealing with that matter.
    Message received. Who would you suggest talking to? I'm really not trying to do anything incorrectly. I just want a clearer picture of the rules (although I very much understand the immediate issue).

    The issue of deprivation is a real one to consider.... but hard to define beyond unreasonable expenditure that is with attempt to gain benefits. Also worth reminding that capital is considered more broadly than just money in accounts.

    I certainly get the employment concern you have and medical advice should be king on that along with your own understanding of condition and realities. I was thinking more perhaps for example if you were creative in mind you could make things and irregularly sell. It's difficult otherwise to advise.... some claimants around these boards have faced the issue of how to spend income when they actually have quite cheap lives at a basic level.... holidays and helpers to accompany are one example of things that crop up. 
    Yeah that's really worrying to be honest. I didn't even know that was a thing. Well I did, but I didn't realise the way I'm living might count as such. Uhhhhhhhhhhhh... ok... This actually shows that I lack even more knowledge than I thought I did.

    My helpers are provided 24/7 by the NHS. My condition is crudely comparable to quadriplegia to illustrate my situation.
  • TheDJMC
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    You may find it useful to know that what you spend your income on is of no concern to DWP.  Although if you invest it, it then becomes capital in the next assessment period anyway.

    The rules around deprivation of capital apply if you spend your savings, once they are savings, with the intention of depleting them to retain/increase benefit entitlement.  But spending income in the period in which you receive it - so monthly for UC, 4 weekly for PIP - has no restrictions whatsoever, even if it's specifically to prevent the accumulation of savings.  You could literally give substantial amounts of your income away before it became savings if you wished, you just can't hold onto it and still be entitled to means-tested benefits once savings go above £16,000 whether that's in cash or in investments.
    So it's the monthly rollover that determines savings?
  • Spoonie_Turtle
    Spoonie_Turtle Posts: 8,532 Forumite
    First Anniversary First Post Name Dropper
    edited 1 February 2023 at 2:36AM
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    TheDJMC said:
    You may find it useful to know that what you spend your income on is of no concern to DWP.  Although if you invest it, it then becomes capital in the next assessment period anyway.

    The rules around deprivation of capital apply if you spend your savings, once they are savings, with the intention of depleting them to retain/increase benefit entitlement.  But spending income in the period in which you receive it - so monthly for UC, 4 weekly for PIP - has no restrictions whatsoever, even if it's specifically to prevent the accumulation of savings.  You could literally give substantial amounts of your income away before it became savings if you wished, you just can't hold onto it and still be entitled to means-tested benefits once savings go above £16,000 whether that's in cash or in investments.
    So it's the monthly rollover that determines savings?
    Yes.

    From ADM H1, the official guidance  https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1073425/admh1.pdf

    "When income becomes capital
    H1050 Income becomes capital if it has not been spent by the end of the assessment period after the one in which it was received."


    What you need to do to make things right with UC is firstly work out when your capital went above £6,000, then work out how much it was at the end of every assessment period thereafter.  (Remember PIP and UC are both income, so subtract those from the balance at the end of each AP.)  Then report a change through your journal in the relevant section.  You should also send a message with the details so they can work out what the overpayment will be.  There may be a fine for not telling them at the time, civil penalties are apparently £50 https://www.turn2us.org.uk/Benefit-guides/Overpayments-under-the-Universal-Credit-system/Civil-penalties-for-benefit-overpayments

    Oh, and just to make things even more complicated, the £650 and £150 Cost of Living Payments are supposed to be disregarded indefinitely, as are any £25 Cold Weather Payments.  I don't know how that works in practice, it seems very odd if you can take off £800+ indefinitely - and then we'll get another £900 at least in the next 18 months. The idea of those payments is they're to be spent, but as well as people starving and/or freezing due to lack of money, there are also people like you and I at the other end of the financial spectrum with low/very low costs for daily life for whatever reasons related to our disabilities.
  • williewonder
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    I just spend my excess benefits and holidays which are fulfilling and help my mental health. I went away 4 times last year and going away two times this year.
  • wild666
    wild666 Posts: 2,126 Forumite
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    edited 15 February 2023 at 2:47PM
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    I was caught out by the £6000 limit in 2016 but the £6000 limit can be over for every payment of UC as they have to deduct the PIP payment, which is currently £627.60, from the account when paying in the UC and will be £691 from April. They won't work it out when a PIP payment is put in because it doesn't count as savings even if over the £6000 limit. A person can effectively have £6,627.59 in the account every time a UC payment is made and because they have to deduct the £627.60 the account will show £5,999.99 and that is under the £6000 that would see £1 per week taken from the UC payment. The only time PI@P payments are included in the total is when the account will be £6000 or over on the payment date of UC after the 4 weekly payment of PIP has being taken into account.
    be aware that savings includes all accounts like an ISA or premium bonds and could also be any other property the person owns, they even say that money saved at home is counted but they would find it hard to prove how much a person had in saving or day to day usage even if it was tens of thousands of pounds in a safe at home.
    Someone please tell me what money is
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