Universal credit & childs savings

Grumpy_chap

HillStreetBlues said:

In my opinion it will come down to if it's a hard or soft loan.
A parent loaning money to their child will normally be treated as a soft loan, as they parent will never take legal action to enforce the debt.
So the parents no longer have the money as they can't legally claim it, but if it is repaid then it becomes their money again.

Thankyou - that does seem to be a reasonable differentiation.

I remain unsure how a DM would treat it, and the limits.  I think the consensus here is that £400 for car is insurance is reasonable.

@Spoonie_Turtle (whom I am also agreeing with) has put things in a different context to the "hard" or "soft" loan in that recovery from a private individual is always probably of repayment being impossible to enforce (over and above the unlikely case of a parent taking their child to court).  

I don't profess to understand the full detail of the guidance linked but "£400 loan to son for car insurance" (or anything equivalent) is not listed under the heading "what is capital?".  That would mean that the individual does not have that capital until they have it back (which is reasonable, exactly what was suggested a few posts upthread).

Hopefully we can find a definitive response that would give the OP the factual information they need should a DM not be favourable in the first instance.

My comments really are to challenge the basis, not to say that a parent should not support their child in the way that is desired.

Spoonie_Turtle

Grumpy_chap said:

HillStreetBlues said:

In my opinion it will come down to if it's a hard or soft loan.
A parent loaning money to their child will normally be treated as a soft loan, as they parent will never take legal action to enforce the debt.
So the parents no longer have the money as they can't legally claim it, but if it is repaid then it becomes their money again.

@Spoonie_Turtle (whom I am also agreeing with) has put things in a different context to the "hard" or "soft" loan in that recovery from a private individual is always probably of repayment being impossible to enforce (over and above the unlikely case of a parent taking their child to court).  

I typed and posted my comment before seeing HSB's; I think they have probably used the language I was lacking - I've never heard of hard/soft loans before but in the context of the rest of their comment it does sound very similar to the distinction I was trying to make

Grumpy_chap

No - I had never heard of the "hard" or "soft" loans terminology before.
I am not sure that it is an official terminology, but HSB really does seem to have found the language and phraseology that really works.

HillStreetBlues

Grumpy_chap said:

HillStreetBlues said:

In my opinion it will come down to if it's a hard or soft loan.
A parent loaning money to their child will normally be treated as a soft loan, as they parent will never take legal action to enforce the debt.
So the parents no longer have the money as they can't legally claim it, but if it is repaid then it becomes their money again.

Thankyou - that does seem to be a reasonable differentiation.

I remain unsure how a DM would treat it, and the limits.  I think the consensus here is that £400 for car is insurance is reasonable.

The bar is " significant purpose " would getting the extra benefit play a significant purpose in not having the money.
As the extra money would either be £4.35 or £8.70 a month I wouldn't have thought it played no part in the decision, never mind a significant purpose

My personal opinion is that no judge would would rule it as a significant purpose, as they would be the ultimate decider if  needed.