Capital spending.

Simon7685

I have a question around my own circumstances for a change, instead of asking for someone else

This may sound ostentatious for a sick man on UC, Lcwra and PIP but my life is not all roses round the door!!

I have a car sat on my drive worth around £14k.   I use it once a week to trundle to the supermarket and for Drs/Hospital and that sort of thing.  Thanks to many health issues I'm not going to be a long liver on this earth and it struck me that there are a few things I may like to do before I cant anymore.

So I'm thinking of selling my car, which I own outright.  I would need to buy a reliable run around as buses don't get me near enough to what I need. (I don't get high rate mobility on PIP, they chopped it back on transition but gave me a 10 year award altogether  so I didn't rock the boat.)

I'm aware I can have 6k without any effect on my UC or Council Tax benefit etc.  If I sold my car and received say 14k.  I estimate wanting to spend around 4k to get a smaller car for what I need leaving me with 10k in capital.

I have a daughter in her final year at Uni, her car has its issues, so I was thinking of giving her something to try and get her a bit better vehicle and finally I have some credit I would like to have paid off.

I estimate after that I would have around 5 and a half thousand left to make my life more comfortable and do a couple of things.  I believe I can do with that as I wish as long as its under 6k?

I need to know how all this would be treated by UC though.  I've read through Capital rules in the UC guide but my brain isn't what it was and I struggle to both fully understand them and retain the info.  Oh how illness effects you over time!!

Could someone help me out on here, to know if I can do the stuff I want to do without losing my benefits, or is it a non starter?

I realise some might think it's pretty wrong to sell a car and benefit from what it makes and still expect the state to pay me and that's fine.  I'm just wanting to have a last but of fun while I can that's all.

Thanks in advance

HillStreetBlues

Simon7685 said:

I have a question around my own circumstances for a change, instead of asking for someone else

This may sound ostentatious for a sick man on UC, Lcwra and PIP but my life is not all roses round the door!!

I have a car sat on my drive worth around £14k.   I use it once a week to trundle to the supermarket and for Drs/Hospital and that sort of thing.  Thanks to many health issues I'm not going to be a long liver on this earth and it struck me that there are a few things I may like to do before I cant anymore.

So I'm thinking of selling my car, which I own outright.  I would need to buy a reliable run around as buses don't get me near enough to what I need. (I don't get high rate mobility on PIP, they chopped it back on transition but gave me a 10 year award altogether  so I didn't rock the boat.)

I'm aware I can have 6k without any effect on my UC or Council Tax benefit etc.  If I sold my car and received say 14k.  I estimate wanting to spend around 4k to get a smaller car for what I need leaving me with 10k in capital.

I have a daughter in her final year at Uni, her car has its issues, so I was thinking of giving her something to try and get her a bit better vehicle and finally I have some credit I would like to have paid off.

I estimate after that I would have around 5 and a half thousand left to make my life more comfortable and do a couple of things.  I believe I can do with that as I wish as long as its under 6k?

I need to know how all this would be treated by UC though.  I've read through Capital rules in the UC guide but my brain isn't what it was and I struggle to both fully understand them and retain the info.  Oh how illness effects you over time!!

Could someone help me out on here, to know if I can do the stuff I want to do without losing my benefits, or is it a non starter?

I realise some might think it's pretty wrong to sell a car and benefit from what it makes and still expect the state to pay me and that's fine.  I'm just wanting to have a last but of fun while I can that's all.

Thanks in advance

How much is the credit (debt)? as that would be important to the figures of the answer.

Simon7685

The credit is around the 1k amount thanks.

HillStreetBlues

Do yu have any other capital atm?

Simon7685

Not at the moment just a small overdraft every month that gets cleared when I'm paid.  Normally between 150 and 200 pounds that is interest free.

HillStreetBlues

The selling of the car, buying a another one and paying for a debt is fine.

The issue will be once you are over £6k  then giving money away can be seen as DoC , as the money you give her will allow you to claim more UC,
If you have under £6k then you are free to do what you like with your money.


So say instead of a £1k debt,  you had a £5K debt then when you sold the car at £14k  bought a another one at £4k and paid off the £5k  you would then  have £5k  so nothing to declare.

You would want to do that all in the same assessment period. As if you sold car at the end of AP  then any capital would have to be declared on the last day.
So you would be much better off  arranging the car sale on or shortly after the AP starts. That would give you the rest of the month to sort everything else out.

Simon7685

Thats great thanks, I would have fallen for it without sound advice!  My brain is definitely not what it was, trying to make sense of the rules!!

HillStreetBlues

Also remember that your UC and PIP is classed as income in the period it is paid, so only becomes capital in the next period.

For example If you got £1000 UC & £500 PIP   and the end of the assessment period you had £7k in your account you wouldn't be over £6k where deductions begin, as the breakdown would be £1,500 income & £5.5K capital.

Murphybear

Not about the rules but the experience of a friend.

when she was 75 she gave up driving and sold her car.  She lived in a small market town.  The public transport wasn’t brilliant so for her few journeys she got an account with a local taxi firm.  She told me that she spent a lot less money on taxis than running a car.  

TELLIT01

Capital between £6k and £16k only reduces the amount of UC received, it doesn't stop UC payments completely.  Giving money away to family members would almost certainly be classed as deprivation of capital which means that for benefit purposes you are treated as still having that money.