Universal credits and income from discretionary trust

BriNylon

Can anyone tell me how income from a discretionary trust is treated for universal credit?
Do the same rules apply for means tested ssp?

calcotti

The trust needs to be disclosed to UC and whether or not it can be disregarded depends on the terms of the trust.

SSP is payable for 28 weeks and is not means tested.

SSP is treated as earnings when calculating UC.

NedS

It depends where the money came from to form the trust.

Income from a trust should generally be fully taken into account as unearned income (H5088). However, there are some examples where it can be disregarded (H5123, H5140)

See Advice for decision makers H2 (H2028) and H5 (H5088 onwards) for more information

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1136904/admh2.pdf

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1061722/admh5.pdf

BriNylon

Many thanks for these replies.  

So my understanding is therefore if individual received regular payments from a discretionary trust they would be indeed taken into account for UC?
If, however, individual receives, say, £4K, then presumably UC credit stopped that week.  He then spends it on things he needs.  Say adapted car, new clothes, holiday. He has none left.  Will UC start again the following week?

NedS

BriNylon said:

Many thanks for these replies.  

So my understanding is therefore if individual received regular payments from a discretionary trust they would be indeed taken into account for UC?
If, however, individual receives, say, £4K, then presumably UC credit stopped that week.  He then spends it on things he needs.  Say adapted car, new clothes, holiday. He has none left.  Will UC start again the following week?

UC is a monthly benefit.

If the trust / income from the trust cannot be disregarded, then any income would be taken into account in the month in which it is received. Any income not spent within the month then becomes capital.

Any income would need to be declared and would reduce any entitlement to UC pound for pound in that month.

How large is the trust and where did the money originally come from? It may be that the trust capital cannot be disregarded and that there is no entitlement to UC at which point it all becomes academic. The trust must be declared to UC at the outset of any claim and the decision maker will decide if it can be disregarded and if any income from it can likewise be disregarded, or not.

Spoonie_Turtle

NedS said:

BriNylon said:

Many thanks for these replies.  

So my understanding is therefore if individual received regular payments from a discretionary trust they would be indeed taken into account for UC?
If, however, individual receives, say, £4K, then presumably UC credit stopped that week.  He then spends it on things he needs.  Say adapted car, new clothes, holiday. He has none left.  Will UC start again the following week?

If the trust / income from the trust cannot be disregarded, then any income would be taken into account in the month in which it is received. Any income not spent within the month then becomes capital.

Any income would need to be declared and would reduce any entitlement to UC pound for pound in that month.

If it's a one-off lump sum would it perhaps be capital not income?

HillStreetBlues

Spoonie_Turtle said:

If it's a one-off lump sum would it perhaps be capital not income?

I thought if it was income it would be classed as that, wouldn't matter in it was a lump sum or paid monthly.

If money is removed from the trust and put into a personal account, then it would then be classed as capital.

But would be good if someone could  confirm.