Migration from benefits to UC questions? Saving etc?

blackstar

Thanks all,
In regards to question 1.

I am wondering if its a bit too risky to enter the migration period with over 16k and then take out money at the end for a deposit for a house or something similar as there's a chance we could be deemed to have deliberately done that and then end up with no UC or Scottish child payments etc and that would cause us a huge poverty. 
Maybe it's best to enter the transition stage with how we are now between the 6k - 16k and right away we having the monthly assesments etc but atleast we don't have to worry about potentially being deemed to have removed money at the end of the 12 months and end up in poverty.

Out of interest if someone's deemed to have removed money to keep claiming UC how long does that punishment last for?

2) when we declare a difference of £250 in our savings does that also include any left over income ie wages? 

HillStreetBlues

blackstar said:

Out of interest if someone's deemed to have removed money to keep claiming UC how long does that punishment last for?

Diminishing notional capital rule is used.

For example  person is found to have notional capital of £50k and was entitled to UC at £1k , then every month the notional capital would reduce by £1k, so £49k of notional capital after first month. This would be ongoing until the notional capital reached £16k or below.
It also has to take into account of any UC uplift during that period or any other changes to the amount of UC that they would be entitled too.

poppy12345

blackstar said:

Thanks all,
In regards to question 1.

I am wondering if its a bit too risky to enter the migration period with over 16k and then take out money at the end for a deposit for a house or something similar as there's a chance we could be deemed to have deliberately done that and then end up with no UC or Scottish child payments etc and that would cause us a huge poverty. 

Using the money to buy a home you intend to live in will very unlikely be treated as DoC.

blackstar said:

Thanks all,

Maybe it's best to enter the transition stage with how we are now between the 6k - 16k and right away we having the monthly assesments etc but atleast we don't have to worry about potentially being deemed to have removed money at the end of the 12 months and end up in poverty.

If you did that then how are you going to increase your savings further to allow you to buy a home in the furture? If savings go over £16,000 then entitlement to means tested benefits ends.

blackstar said:

2) when we declare a difference of £250 in our savings does that also include any left over income ie wages? 

Again, this has been answered several times. Yes, it includes earnings.

blackstar

1) Using the money to buy a home you intend to live in will very unlikely be treated as DoC.

Yes this is true. The only issue is it will be so difficult to ensure a) we have enough over 16k for a deposit at the end of the 12 months for a house b) we find a suitable house around the end of the 12 months transition stage and if we don't then we will either have to buy something else which is not likely to be treaded as DoC in order to stay on UC or loose UC and see our savings for a deposit dwindle away with everyday living expenses. 
For this I would need to be very clear on What Won’t Result in Deprivation of Capital?
I did read this but find it hard to believe that going on holiday is not considered Deprivation of capital.

https://www.leading.uk.com/what-can-i-buy-that-is-not-deprivation-of-capital/

2) yes it has been covered before that any left over money from living expenses will be subject to the £235 deduction. 

3) say if we enter the 12 months transition period over 6k but under 16k and a relative gives us a lump sum to take us over 16k for the sole purpose for a deposit for a house will this stop of UC? If not, how long will they give us to use it for a deposit for a house?

poppy12345

blackstar said:

2) yes it has been covered before that any left over money from living expenses will be subject to the £235 deduction. 

It's not a £235 deduction. It's £4.35/month for every £250 or part thereof over £6,000.

blackstar said:

3) say if we enter the 12 months transition period over 6k but under 16k and a relative gives us a lump sum to take us over 16k for the sole purpose for a deposit for a house will this stop of UC? If not, how long will they give us to use it for a deposit for a house?

Yes, your UC will stop. There's no disregard for this. Your UC entitlement is based on the last day of each assessment period.

Spoonie_Turtle

Yamor said:

Spoonie_Turtle said:

blackstar said:

Spoonie would also really appreciate your reply to my above post also.

Poppy thanks for that. When you say 

"If your savings are under £16k when you claim and then you go over that amount then your UC will end."

1. How about during the 12 months transition stage?

2. When you say assesment stages is every month? What does this mean? Does it mean every month we have to declare our savings amount maybe sometimes all bank statements etc at a certain date every month in order to continue wirh UC to prove we are still eligible in relation to savings and incone?

3. Out of interest what's the earning cut out, I read.

". A couple with just one earner in the same circumstances can make almost £59,000 in income before being cut off, a rise from £49,300 previously."

Not that we are anywhere close to that income.

3. Your earnings / income cut off is dictated  by your maximum UC.

So for you:
Max UC  £2342.34 + £643 = £2,985.34
- £561.16 ESA = £2,424.18
÷0.55 (55% taper rate) = £4,407.60
+379 work allowance = £4,786.60 per month of earnings.
Then minus £4.35 for each £250 savings between £6,000 and £16,000.  With savings of 16k that's £174, so £4,612.6 earnings per month.  That's an annual take-home of £55,351.20             - edit: according to an online calculator that comes out at a gross salary of over £82,000

And it'll all increase in April when benefits have their annual rise for inflation!

Small mistake here: the £174 comes off earlier in the calculation - together with the deduction for the ESA.

Thanks, I did it at the end to account for later reduction in capital if they do get to use savings as a house deposit.  And that was still wrong.

Yamor

Spoonie_Turtle said:

Yamor said:

Spoonie_Turtle said:

blackstar said:

Spoonie would also really appreciate your reply to my above post also.

Poppy thanks for that. When you say 

"If your savings are under £16k when you claim and then you go over that amount then your UC will end."

1. How about during the 12 months transition stage?

2. When you say assesment stages is every month? What does this mean? Does it mean every month we have to declare our savings amount maybe sometimes all bank statements etc at a certain date every month in order to continue wirh UC to prove we are still eligible in relation to savings and incone?

3. Out of interest what's the earning cut out, I read.

". A couple with just one earner in the same circumstances can make almost £59,000 in income before being cut off, a rise from £49,300 previously."

Not that we are anywhere close to that income.

3. Your earnings / income cut off is dictated  by your maximum UC.

So for you:
Max UC  £2342.34 + £643 = £2,985.34
- £561.16 ESA = £2,424.18
÷0.55 (55% taper rate) = £4,407.60
+379 work allowance = £4,786.60 per month of earnings.
Then minus £4.35 for each £250 savings between £6,000 and £16,000.  With savings of 16k that's £174, so £4,612.6 earnings per month.  That's an annual take-home of £55,351.20             - edit: according to an online calculator that comes out at a gross salary of over £82,000

And it'll all increase in April when benefits have their annual rise for inflation!

Small mistake here: the £174 comes off earlier in the calculation - together with the deduction for the ESA.

Thanks, I did it at the end to account for later reduction in capital if they do get to use savings as a house deposit.

I realised that, but it does make your final answer slightly wrong. The earnings needed to reduce UC to nil will be lower than your result because of this.

Spoonie_Turtle

Yamor said:

Spoonie_Turtle said:

Yamor said:

Spoonie_Turtle said:

blackstar said:

Spoonie would also really appreciate your reply to my above post also.

Poppy thanks for that. When you say 

"If your savings are under £16k when you claim and then you go over that amount then your UC will end."

1. How about during the 12 months transition stage?

2. When you say assesment stages is every month? What does this mean? Does it mean every month we have to declare our savings amount maybe sometimes all bank statements etc at a certain date every month in order to continue wirh UC to prove we are still eligible in relation to savings and incone?

3. Out of interest what's the earning cut out, I read.

". A couple with just one earner in the same circumstances can make almost £59,000 in income before being cut off, a rise from £49,300 previously."

Not that we are anywhere close to that income.

3. Your earnings / income cut off is dictated  by your maximum UC.

So for you:
Max UC  £2342.34 + £643 = £2,985.34
- £561.16 ESA = £2,424.18
÷0.55 (55% taper rate) = £4,407.60
+379 work allowance = £4,786.60 per month of earnings.
Then minus £4.35 for each £250 savings between £6,000 and £16,000.  With savings of 16k that's £174, so £4,612.6 earnings per month.  That's an annual take-home of £55,351.20             - edit: according to an online calculator that comes out at a gross salary of over £82,000

And it'll all increase in April when benefits have their annual rise for inflation!

Small mistake here: the £174 comes off earlier in the calculation - together with the deduction for the ESA.

Thanks, I did it at the end to account for later reduction in capital if they do get to use savings as a house deposit.

I realised that, but it does make your final answer slightly wrong. The earnings needed to reduce UC to nil will be lower than your result because of this.

Yes, I suddenly realised where I went wrong!  Thank you, I definitely wouldn't have if you hadn't pointed it out.  Going to fix now …

Spoonie_Turtle

Right, have amended my previous post but for simplicity here is the accurate calculation for the first 12months while you have £16,000+ in savings … but based on rates up until April, so it will all increase after that.

To account for your house deposit savings:
Max UC  £2342.34 + £643 = £2,985.34
- £561.16 ESA = £2,424.18
- £174 savings deduction = £2250.18
÷0.55 (55% taper rate) = £4091.23
+379 work allowance = £4,470.23 per month of earnings.
Which works out at an annual take-home of £53,642.76

Shirker_Bee

Which works out at an annual take-home of £53,642.76

The person earning that amount via working will hand over a third of that in income tax. Where you don’t - something is wrong somewhere.