Universal Credit and capital more than £16,000

poppy12345

ElwoodBlues said:

poppy12345 said:

MikeJXE said:

My cousin inherited £50,000 last year so he spent it on a new car and caravan to stay below the £16,000

If it's means tested benefits they are claiming, when they received the money did they report the changes? If they didn't then they should have and let a decision maker decide whether there's still any entitlement to their benefits.

As per sammyjammy, I thought you only need to report your savings at the end of each AP?

That's not what sammyjammy advised.

sammyjammy said:

Just report your savings balance when its in your account in your UC journal, they will do the rest, same with council, report it to them and they will close the claim

In this case you need to report the changes when the money goes into your bank because it's an inheritance. If you didn't report it then DWP could ask questions in the future because they would eventually find out. 

Yes the last day of your assessment period is what your entitlement is based on but if someone has savings of more than £16,000 and spends it within a short space of time they may be asked what it was spent on. There are things like paying off debt which is allowed when claiming UC but they will still need to know.

Spoonie_Turtle

poppy12345 said: 

Yes the last day of your assessment period is what your entitlement is based on but if someone has savings of more than £16,000 and spends it within a short space of time they may be asked what it was spent on. There are things like paying off debt which is allowed when claiming UC but they will still need to know.

To follow on from this -
If someone plans to spend a large enough chunk that their savings would fall below the threshold within the same assessment period, in effect they would have become ineligible (when receiving the money) then eligible again (after spending it) within the same assessment period.

With entitlement based on the circumstances at the end of the assessment period, being ineligible due to savings for a few days is overridden by being eligible again at the end of the same AP.

So instead of closing then reopening the claim within a few days, it's more practical to just not do that, but it's always sensible to let them know what's happened because it will get flagged up at some point, the money going in (and then out) and if you've let them know then they will already know the reason for that and it's clear you're not hiding anything.


For people not in this particular situation, who don't have immediate expenditure needs that would get their savings down below the threshold, they should report the change in savings when it happens.

poppy12345

Thanks spoonie, much better "put" than mine, appreciate it.

Newcad

If you got money and didn't need to spend it but only did so wIthin the same AP to keep claiming the same amount of benefits then that fits the definition of "deprivation of capital".

If you don't tell them that you had the money and then spent/disposed of the money during the same AP then it will just take them longer to find out, at which point they will want any overpaid benefit back.

If however you spent it within the same AP on what was needed/allowed then they might not be happy that you didn't tell them. (and would probably then look through your claim with a fine comb) but that's as far as they could go.

So again it's why you spent it, and if that spending was done with the intention to maintain or increase benefits that counts.

The only advantage of getting money and paying it out in the same AP is if that spending is not deprivation, in that case it avoids UC being reduced or stopped at the end of that AP only to be reinstated later.

Edit- sorry I was answering the first page and hadn't seen the later answers. (*** phone).

GiroBoy

MikeJXE said:

My cousin inherited £50,000 last year so he spent it on a new car and caravan to stay below the £16,000

Had a client in similar circumstances, he bought a campervan, the DWP closed his UC claim, we went to appeal and lost, deprivation of capitol 

ElwoodBlues

How would DWP find out about it if the claimant doesn't declare it? The proposed future changes to give them direct access to claimant's bank account would facilitate it, but at the moment I thought they could only get access that kind of info if there was an investigation opened?

Eldi_Dos

GiroBoy said:

MikeJXE said:

My cousin inherited £50,000 last year so he spent it on a new car and caravan to stay below the £16,000

Had a client in similar circumstances, he bought a campervan, the DWP closed his UC claim, we went to appeal and lost, deprivation of capitol 

Not the emoji most taxpayers would have used.

HillStreetBlues

ElwoodBlues said:

How would DWP find out about it if the claimant doesn't declare it? The proposed future changes to give them direct access to claimant's bank account would facilitate it, but at the moment I thought they could only get access that kind of info if there was an investigation opened?

If money is in a ISA then the tax man shares information with the DWP, they also have methods of checking some inheritance. 

NedS

HillStreetBlues said:

ElwoodBlues said:

How would DWP find out about it if the claimant doesn't declare it? The proposed future changes to give them direct access to claimant's bank account would facilitate it, but at the moment I thought they could only get access that kind of info if there was an investigation opened?

If money is in a ISA then the tax man shares information with the DWP, they also have methods of checking some inheritance. 

Indeed, we live in a digital world where DWP are increasingly using data sharing and AI to flag risk cases for review. There is nowhere to hide - a solicitor isn't going to pay out an inheritance in cash and any estate that has gone through probate is reported to HMRC.

If Tesco and Amazon can work out how much I spend and what I spend it on, I'm sure the government can too.

born_again

HillStreetBlues said:

ElwoodBlues said:

How would DWP find out about it if the claimant doesn't declare it? The proposed future changes to give them direct access to claimant's bank account would facilitate it, but at the moment I thought they could only get access that kind of info if there was an investigation opened?

If money is in a ISA then the tax man shares information with the DWP, they also have methods of checking some inheritance. 

All savings are reported by banks, for interest & possible tax payable to HMRC, so same would go for any bank account that paid interest.