Migration from benefits to UC questions? Saving etc?

blackstar

Hello all

Hoping for some advice. 
We live in Central Scotland and as we all know there is managed migration to UC coming up at some point. We would like some advice please as quite stressed about it as it may leave us alot worse off. Our circumstances are at the moment.

* Myself disabled recieve Contribution Based Support group ESA and Middle and lower DLA.

* wife works part time. 

* two children who receive Child Disability Payments (Scottish version of DLA) higher rate for mobility and Care for one and lower and middle rather for the other child. 

*Child tax credits

* Scottish child payment. Scottish child payment is £25 a week per child 

* Child benefit paid by DWP

We have savings under 16k but are trying to save for a deposit to use to buy a house. We are hoping to get to 20k in the next couple of years but if we go over 16k and we are migrated to UC ( I know first 12 months savings are disregarded) would this mean we would lose our credit tax credits after a year of being on UC ? Or is due to maybe our daughter being in High rate DLA mean savings over 16K are disregarded or any other exceptions? Would we also lose any of the other benefits we get or just the child Tax credits? If so that's so annoying that Child tax credits on UC is means tested but not the old Child Tax Credit's? This means if we have over 16K in savings our income would reduce significantly if we lose our Child Tax credits? But what about the other benefits too?

Hoping someone can help?

Thanks all? 

Spoonie_Turtle

blackstar said:

Hello all

Hoping for some advice. 
We live in Central Scotland and as we all know there is managed migration to UC coming up at some point. We would like some advice please as quite stressed about it as it may leave us alot worse off. Our circumstances are at the moment.

* Myself disabled recieve Contribution Based Support group ESA and Middle and lower DLA.

* wife works part time. 

* two children who receive Child Disability Payments (Scottish version of DLA) higher rate for mobility and Care for one and lower and middle rather for the other child. 

*Child tax credits

* Scottish child payment. Scottish child payment is £25 a week per child 

* Child benefit paid by DWP

We have savings under 16k but are trying to save for a deposit to use to buy a house. We are hoping to get to 20k in the next couple of years but if we go over 16k and we are migrated to UC ( I know first 12 months savings are disregarded) would this mean we would lose our credit tax credits after a year of being on UC ? Or is due to maybe our daughter being in High rate DLA mean savings over 16K are disregarded or any other exceptions? Would we also lose any of the other benefits we get or just the child Tax credits? If so that's so annoying that Child tax credits on UC is means tested but not the old Child Tax Credit's? This means if we have over 16K in savings our income would reduce significantly if we lose our Child Tax credits? But what about the other benefits too?

Hoping someone can help?

Thanks all? 

You'll only get transitional protection for savings over £16,000 if you have them at the time you need to claim UC.

If you claim UC with savings below that threshold, if you then go over £16,000 you'll no longer be eligible for UC.  

All the other benefits you've listed will continue regardless.  UC only replaces Tax Credits out of those.  

Incidentally your wife can also claim the carer element for UC if she provides 35hours of care for any one of you, no earnings threshold for that unlike Carers Allowance.

peteuk

Claiming other benefits does not stop your £16K limit, but bear in mind anything above £6K will reduce the amount you claim (after the transition period) 

Given your other benefits will continue, its just the UC that is means tested (and so will stop after youve save £16K+) then after the transition period you will be expected to use your savings instead of receiving UC and as soon as you go below the £16K you will be able to claim again.

poppy12345

Once you claim UC your tax credits will stop. Once you receive the managed migration letter if you don't claim UC by the date in the letter then your tax credits will still stop.

Child benefit is paid by HMRC and not DWP, it continues as normal.

If you have more than £16,000 when you claim UC then there will be a 12 month disregard. However, if you drop below £16,000 savings and then go above again, UC will stop.

As you're in the Support Group for ESA then you'll be entitled to the LCWRA element of UC from the start of your claim. Your ESA will continue as normal but be deducted in full from any UC entitlement.

blackstar

Thanks for the very helpful replies.

I have heard that savings from dla and child disability payments will be disregarded for savings over 16k? will be so hard to navigate in terms of for instance UC disregarding savings from DLA and child disability payments and similar as they go into the same bank account as my wife's wages. How do they separate them? Maybe we should have start a separate bank account which those benefits which are disregarded in savings go into? 

Are there any legal challenges at the moment going kn with regards to having 16k in savings as hiw can it have been OK under tax credits but not with UC?

"As you're in the Support Group for ESA then you'll be entitled to the LCWRA element of UC from the start of your claim. Your ESA will continue as normal but be deducted in full from any UC entitlement."

The quote above I guess would mean my ESA will be deducted from any universal credit which will hit us financially alot.

What about the transition 12 months if you nave savings between 6k and 16k?

Any idea hiw much carers element of UC is for my wife and also can she only get that if we have savings less than 16k? 

Our current chikd tax credits are so important for our survival at £188 per week and wpuld struggle so much without that and if that's gone then we will really be hit. 

HillStreetBlues

blackstar said:

Are there any legal challenges at the moment going kn with regards to having 16k in savings as hiw can it have been OK under tax credits but not with UC?

No, The Government has decided to now target that benefit to those it deems most in need of it. So it now expects people who do have savings over a certain amount  to use those savings.
So it wouldn't be classed as "unfair" to bring it into line with other income related benefits which the move to UC has done.

poppy12345

blackstar said:

Thanks for the very helpful replies.

I have heard that savings from dla and child disability payments will be disregarded for savings over 16k?

That's not correct. As the money goes into your partners bank account, what's left at the end of the period they are paid for is counted as savings, in with all the rest of your savings. They are not disregarded.

Grumpelstiltskin

You say you are saving for a deposit on a house. So you would then be applying for a mortgage when your income is benefits. Have you thought about what the chances are of you getting a mortgage?

Spoonie_Turtle

blackstar said:

1. Thanks for the very helpful replies.

I have heard that savings from dla and child disability payments will be disregarded for savings over 16k? will be so hard to navigate in terms of for instance UC disregarding savings from DLA and child disability payments and similar as they go into the same bank account as my wife's wages. How do they separate them? Maybe we should have start a separate bank account which those benefits which are disregarded in savings go into? 

Are there any legal challenges at the moment going kn with regards to having 16k in savings as hiw can it have been OK under tax credits but not with UC?

"As you're in the Support Group for ESA then you'll be entitled to the LCWRA element of UC from the start of your claim. Your ESA will continue as normal but be deducted in full from any UC entitlement."

2. The quote above I guess would mean my ESA will be deducted from any universal credit which will hit us financially alot.

2a. What about the transition 12 months if you nave savings between 6k and 16k?

3. Any idea hiw much carers element of UC is for my wife and also can she only get that if we have savings less than 16k? 

Our current chikd tax credits are so important for our survival at £188 per week and wpuld struggle so much without that and if that's gone then we will really be hit. 

1. Only if they are lump sum backpayments, then they can be disregarded for a year after receiving them.

To work out what's savings and what's not, for UC it's unspent income by the end of the assessment period after the one in which you receive it.

For totalling up savings at the point you claim UC … that's a bit trickier.  Technically capital would be the total minus the most recent payment of each benefit you received, but UC do ask for the total that you have in all accounts and cash.  So if the total is over £16,000 but the actual savings bit isn't - well actually as a managed migration you would benefit from them counting it all and disregarding savings above £16k, because it would give you a year to save up more for the house deposit and still receive UC.  And once you use it towards a house, you can reclaim UC (but with no protection to bring the payments up to any level, if you've had to end your UC in between the year of protection and using the deposit).

2. If your ESA wasn't taken into account as income for your TC then there should be a transitional protection element to bring it up to at least the level of your TC … in theory.  And you might have to chase them for it, asking for a breakdown of the transitional protection element.

2a. Deductions for savings between £6k and £16k area supposed to be covered by the transitional protection element too.

3. Carer element is £185.86/month (until it increases in April).  It's part of the overall maximum UC award so if you're eligible for UC at all then it'll be included in the calculation.


Do you currently rent, by the way, or is saving up for a deposit so you can sell your current home and buy another?  If you currently rent, do you claim Housing Benefit?

blackstar

Thanks all for the very helpful replies. 

I was hoping that savings from Child Disability Payments etc would be disregarded but doesn't seem like they are.

Sounds like we will be alot worse off of we switch to UC as we get about £180 per week in tax credits and if we have say 18k and working up towards a deposit to buy a house we will a) no longer be able to save for a deposit as will be much worse off and b) have to use our saving to get by each month.

Totally gutted about that. Wish they had never changed it to UC. Never be able to save for a deposit to buy a house now.

My wife works 25 hours per week.

blackstar

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/capital-rules/

https://www.legislation.gov.uk/uksi/2013/376/contents

https://www.uceplus.co.uk/disregarded-capital#:~:text=The following is some common,certain other compensation payments

I was reading these in the hope that income from certain benefits in savings wouod be disregarded but can't make it out as so complex.