Income & benefits vs capital

I currently have savings of around £4500 (a lot of which is locked in fixed term savings and inaccessible, although the term ends soon). Across the course of a month/AP, I receive my UC payment, PAYE income, and Child Benefit. I've just noticed that depending on the order of my payments coming in and expenses going out, my combined current account and savings account balance can breach the £6k capital threshold.

I'm sure I read somewhere that income during the month isn't supposed to be considered capital unless it doesn't get spent? I guess the capital/bank balances should only get considered on the final day of the current AP, but I've also seen somewhere that if your capital increases across a threshold (6k, 16k) that it's considered a change in circumstances and you're supposed to report that to UC?

Also, I put most household living costs (groceries, clothes council tax, fuel, insurance etc) on a credit card, which I always pay off in full each month. But at any one time I can have as much as £2000 plus credit card balance. So I don't consider all of my savings as capital, because a big chunk is very short term savings in anticipation of the current credit card bill. But I know UC doesn't consider debts/offset those from capital, so they might see things differently?

If I managed my expenses differently (e.g paid with debit card rather than credit, paid household bills earlier), it would keep my cash in the bank below 6k. But then I'd lose the consumer protection that the credit card provides.   

Comments

  • Brie
    Brie Posts: 9,364
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    edited 14 December 2023 at 4:30PM
    Could the debit on your credit card (i.e. the £2k you owe) be balanced against the total credit (i.e. savings etc) when reporting?

    If not maybe you could make payments to your card throughout the month to keep things at the right level.
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  • Spoonie_Turtle
    Spoonie_Turtle Posts: 8,192
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    edited 14 December 2023 at 4:35PM
    Brie said:
    Could the debit on your credit card (i.e. the £2k you owe) be balanced against the total credit (i.e. savings etc) when reporting?
    No.

    However unspent income does not become capital until the end of the assessment period after the one in which it was received. 

    So an easy way to work out the potentially reportable total is to total everything, then minus the income you've received during the present AP.  What's left is technically capital, apart from any unspent cost of living payments which are disregarded indefinitely (the intention being that people would be needing to spend them anyway).

  • HillStreetBlues
    HillStreetBlues Posts: 3,110
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    edited 14 December 2023 at 4:55PM

    I'm sure I read somewhere that income during the month isn't supposed to be considered capital unless it doesn't get spent? I guess the capital/bank balances should only get considered on the final day of the current AP, but I've also seen somewhere that if your capital increases across a threshold (6k, 16k) that it's considered a change in circumstances and you're supposed to report that to UC?
    You are correct on both counts but run in tandem with each other. It's capital over £6k not monies, which most often are different.

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