Universal Credit Savings and deprivation of capital

kingston1506

I have looked at rules re deprivation of capital for UC and am worried about spending money my benefits total 1339 through pip and uc after paying rent so I have a lot of disposable income which will just increase my savings every month until I hit 16k then my benefits will stop. If they stop my benefits if I reach 16k when the savings are gone will they reinstate my benefits?  A friend of mine on UC  says she spends the majority of her uc on clothes shoes and going out and she is not worried about deprivation of capital. My care worker said to just spend the money but I am not a frivolous person so know my savings will rise till I hit the 16k my care worker also said once the savings are gone it takes a long time to reinstate benefits so then I will be in the opposite position of not being able to pay rent or bills.  I am trying to work out what is deemed to be deprivation of capital for UC purposes 

peteuk

Only your UC will be affected by the capital you have.  PIP is not means tested. 

It sounds like you have over £6K in savings already - this will mean your Uc is reduced by £4.35 for every £250 or part there of over the £6K.
Once you reach £16K your entitlement ceases.  

Certain payments are disregarded, like the COL payments are disregarded for life if you can show you still have them.  For example

If you received £1500 in COL payments and since the your savings have never been lower than this then you can disregard £1500.  If your savings droped to £1k then you disregard £1k of the £1.5K.

Your income and benefits do not count as capital until your next assement period, this is what you are expected to life off. 

Any lump sums may also be disregarded depending on why they came from and the  circumstances you recieved them in.

itsthelittlethings

Do yourself a budget. Unlike most people doing a budget, where you are trying to spend less, try to spend more. Think of things that would improve your quality of life. Do you enjoy going out for coffee or to the cinema? Day trips? Would you like a new tv? Buy nicer food to increase your food bill? I think you are right to try not to exceed 16k. It will be a headache to try to get your benefits back once they have been stopped and I think you are right to try not to put yourself in this situation.

By the way, you need to notify the DWP when you have over 6k, as your benefits will be reduced at this point. Over 16k they will be stopped. I was not sure if you were aware of this.

itsthelittlethings

Day to day spending is very unlikely to be deemed deprivation of capital. Deprivation of capital is really wildly unreasonable spending, like inheriting 50k and immediately buying a sports car so you have less than 6k, or giving it away.

Rubyroobs

There's no point buying stuff you don't need - bad for the environment and you'd be overwhelmed with stuff. 
Either give excess money to a charity or foodbank if you have more than you need from benefits or just let it build up until it goes over 16k and then re-claim again when it drops back under. your benefits would naturally reduce this way. As above you need to report any savings over 6k as there would be a small deduction on your UC.

HillStreetBlues

How much is your current capital?

kingston1506

I have declared savings of £7k and received a tax rebate for £700 so will go over my declared savings by a bit so they will want to see all my bank statements as they did when I declared my savings in the first instance. I am worried they will deem certain purchases as deprivation.  I could pay for days out cinema etc and that’s not deemed to be deprivation. I have a mental health condition so don’t tend to go out much hence why my savings have built up. 

Spoonie_Turtle

kingston1506 said:

I have declared savings of £7k and received a tax rebate for £700 so will go over my declared savings by a bit so they will want to see all my bank statements as they did when I declared my savings in the first instance. I am worried they will deem certain purchases as deprivation.  I could pay for days out cinema etc and that’s not deemed to be deprivation. I have a mental health condition so don’t tend to go out much hence why my savings have built up. 

What kinds of purchases are you worried about?

Deprivation of capital only potentially applies to spending savings above the £6,000 threshold.  If you spend all of your income in an assessment period and as a result your savings don't increase, that's not deprivation of anything, it's you using your income and they have absolutely no basis to question that. 

And e.g. if you did happen to reduce your savings by paying for a holiday (not a round-the-world cruise or £10k+ all-inclusive luxury tropical resort somewhere, but a normal, nice holiday) that's not likely to be a problem either.

Muttleythefrog

As above... what kind of purchases are you thinking could be a problem?

kingston1506

I have recently moved into a new property which I had to furnish top to bottom new carpets bed white goods sofa chairs etc I still need to buy a cooker but worried to spend in case they class as deprivation.

HillStreetBlues

The correct way to look at DoC isn't how you spend your money but why. This only applies if over £6k, there can never be DoC if a person stays £6k or under.
If you fancy a holiday for the purpose of going way then unless it's extravagant   it's unlikely to be DoC even thou it increase your benefit entitlement.
BUT if you book a holiday for the purpose of decreasing your capital so increasing benefit entitlement then that is DOC.