UC and if you go over 16k?

blackstar

HillStreetBlues said:

blackstar said:

So today I went to my local jobcentre to ask if theres anything they can do to help with the delay on a DM assessing our capital as its holding up our UC Payment.

Can I ask if I am doing this correctly? As the guy I spoke to didn't agree.

So we added up all our monies on the last day of the AP without making any deductions as we were told not to in journal.

So I showed him a spreadsheet.

All our monies on July 28th 2025 (last day of AP) June 29th - July 28th 2025 AP.

Without deductions 14k.

With deductions (ie if you subtracted all income ie wage and benefits received within June 29th - July 28th 2025.) It comes to 10k.

He said the figure that should be used is 14k as your capital. I said yes but why are you not disregarding the 4k of income we received in that AP. He said "because everything was the same the AP before that one and before the one before that roughly, so therefore your capital is now 14k"

I said "yes but that income (wage/benefits) of around 4k should be disregarded each month, so for example we spend that 4k of income each month then our capital should always be considered as 10k" he again said "no that's not how it works, it's now considered as capital as you always are around 14k each month in total at the end of each AP".

Who's correct here? 

What it looks like the guy did was taking your spending from income, not capital which is what guidance seems to imply. Working it out that way there is no income to be deducted meaning everything at the end of the AP is capital.
Everything I've seen on here before including my own review lets a person spend their capital during their AP  leaving income intact. If the DWP have changed policy (or even just leave it to DMs to decide)  it signals a big shift in spending income as default
A person might having to prove what account money was spent from to see if income or capital was being spent.

I for one would be caught out if the policy has changed, I expect with quite a few others.

I dont think the policy has changed. I dont think he understood it.

That makes mo sense what he says.

He is including ALL our income received in said AP as capital on the last day of said AP. But he shouldn't do this I dont think?

So I am awaiting 2 things now.

1) DM to asses this months capital

2 ) the answer to our Mandatory reconsideration from rhe previous AP where they put our capital 6k higher than it should have been. In which I asked them to clarify how they came to that conclusion ie a breakdown and also to correct it based on what I believe the legislation says. 

So our UC is on hold until this is all done. 

So what next Hill it thet get it wrong at the MR? A tribunal? Can I represent myself as cant get any help with this from CAB etc. 

My main reasons is to 

A) Get it all clarified 

B ) A simple solution going forward so theres not all this every month 

C ) Also to get this corrected and clarified as it coupd potentially mean they at some point get it wrong badly and close our claim. So if its all clarified and in writing then that hopefully avoid such a situation.

D) To get everything in writing clarified about income/disregards etc to not just help me but others. 

Yes Spoonie is exactly right, theres no where we can just put in a box all income received in said AP ie "UC amount of £ ..." etc and system automatically deducts it from your declared capital. The system only allows you to have to declare everything in your bakk accounts. Which is totally ridiculous when legislation says "income is not regarded as capital until the end of the next AP after the one in which it was received "

I said even but if we had a month with no income at all we would spend 4k to live on (mortgage etc etc) and our capital would go from 10k to 6k.

Then the next month if we had again no income and we spent 4k again for living expenses we would be down to 2k in capital. ........

He still didnt agree.

HillStreetBlues

There is a combination of ways of working out capital.
You have £14k from the last AP all that is capital on the start of next AP you spend £4k and income is £4k   how's it's been worked out in the past is as the end of the AP it's £10k capital and £4k of income as spending from capital. If spending from income the all the income is spent leaving capital, that would mean capital was £14k and if that continues capital would always be £14k.
In your case it's the disregards issue as well.

It seems a total mess and dragging on far longer than it should be, as all you can do is wait.

If it goes to a Tribunal then it ill be a case of getting as much case law and regs to show that the DM has erred, hopefully it won't come to that.

blackstar

HillStreetBlues said:

There is a combination of ways of working out capital.
You have £14k from the last AP all that is capital on the start of next AP you spend £4k and income is £4k   how's it's been worked out in the past is as the end of the AP it's £10k capital and £4k of income as spending from capital. If spending from income the all the income is spent leaving capital, that would mean capital was £14k and if that continues capital would always be £14k.
In your case it's the disregards issue as well.

It seems a total mess and dragging on far longer than it should be, as all you can do is wait.

If it goes to a Tribunal then it ill be a case of getting as much case law and regs to show that the DM has erred, hopefully it won't come to that.

Thanks. Any case law and regs appreciated if we goto tribunal.

Do you think though I am understanding it correctly?

In each AP we get 4k income, we spend 4k in each AP, so 4k should not be considered as capital in each AP until the end of the next AP after the one in which it was received?

So I belive our true capital is 10k. Over the course of the AP our bank account fluctuates between 10k - 14k. Sometimes reaches 14 as sometimes pur income alll comes in around the same time. Like the day before the last day of our AP. But the guy today said "the last day of your AP you had 14k in your account so that's your total capital" 
But I said "no my wife just got paid and most of our benefits just got paid the day before the AP and thats not considered capital until the last day of the next AP as this is what we will live on for next month."
He wasn't having it and was adamant our capital was 14k!!! 

huckster

Why not put most of the money into a totally separate savings account or accounts and only have one account for income/spending ?

HillStreetBlues

blackstar said:

HillStreetBlues said:

There is a combination of ways of working out capital.
You have £14k from the last AP all that is capital on the start of next AP you spend £4k and income is £4k   how's it's been worked out in the past is as the end of the AP it's £10k capital and £4k of income as spending from capital. If spending from income the all the income is spent leaving capital, that would mean capital was £14k and if that continues capital would always be £14k.
In your case it's the disregards issue as well.

It seems a total mess and dragging on far longer than it should be, as all you can do is wait.

If it goes to a Tribunal then it ill be a case of getting as much case law and regs to show that the DM has erred, hopefully it won't come to that.

Thanks. Any case law and regs appreciated if we goto tribunal.

Do you think though I am understanding it correctly?

In each AP we get 4k income, we spend 4k in each AP, so 4k should not be considered as capital in each AP until the end of the next AP after the one in which it was received?

So I belive our true capital is 10k. Over the course of the AP our bank account fluctuates between 10k - 14k. Sometimes reaches 14 as sometimes pur income alll comes in around the same time. Like the day before the last day of our AP. But the guy today said "the last day of your AP you had 14k in your account so that's your total capital" 
But I said "no my wife just got paid and most of our benefits just got paid the day before the AP and thats not considered capital until the last day of the next AP as this is what we will live on for next month."
He wasn't having it and was adamant our capital was 14k!!! 

There is this thread on Rightsnet (posted in a different thread) https://www.rightsnet.org.uk/forums/viewthread/21288/
IMHO the lack of posts on that thread would indicate to me there is no clear cut answer, as if there was I would expected to be posted.

If it goes to a Tribunal they will be looking at the actual law and that could be different from any guidance.

HillStreetBlues

huckster said:

Why not put most of the money into a totally separate savings account or accounts and only have one account for income/spending ?

Going forward that might be the safest option.
Income paid into account A capital in account B, Monies then should be spent from account B. At the start of the AP move all money from account A to account B. That way a person is always spending capital.

blackstar

HillStreetBlues said:

blackstar said:

HillStreetBlues said:

There is a combination of ways of working out capital.
You have £14k from the last AP all that is capital on the start of next AP you spend £4k and income is £4k   how's it's been worked out in the past is as the end of the AP it's £10k capital and £4k of income as spending from capital. If spending from income the all the income is spent leaving capital, that would mean capital was £14k and if that continues capital would always be £14k.
In your case it's the disregards issue as well.

It seems a total mess and dragging on far longer than it should be, as all you can do is wait.

If it goes to a Tribunal then it ill be a case of getting as much case law and regs to show that the DM has erred, hopefully it won't come to that.

Thanks. Any case law and regs appreciated if we goto tribunal.

Do you think though I am understanding it correctly?

In each AP we get 4k income, we spend 4k in each AP, so 4k should not be considered as capital in each AP until the end of the next AP after the one in which it was received?

So I belive our true capital is 10k. Over the course of the AP our bank account fluctuates between 10k - 14k. Sometimes reaches 14 as sometimes pur income alll comes in around the same time. Like the day before the last day of our AP. But the guy today said "the last day of your AP you had 14k in your account so that's your total capital" 
But I said "no my wife just got paid and most of our benefits just got paid the day before the AP and thats not considered capital until the last day of the next AP as this is what we will live on for next month."
He wasn't having it and was adamant our capital was 14k!!! 

There is this thread on Rightsnet (posted in a different thread) https://www.rightsnet.org.uk/forums/viewthread/21288/
IMHO the lack of posts on that thread would indicate to me there is no clear cut answer, as if there was I would expected to be posted.

If it goes to a Tribunal they will be looking at the actual law and that could be different from any guidance.

Thanks what is the actual law on the subject do you know?

NedS

blackstar said:

HillStreetBlues said:

blackstar said:

HillStreetBlues said:

There is a combination of ways of working out capital.
You have £14k from the last AP all that is capital on the start of next AP you spend £4k and income is £4k   how's it's been worked out in the past is as the end of the AP it's £10k capital and £4k of income as spending from capital. If spending from income the all the income is spent leaving capital, that would mean capital was £14k and if that continues capital would always be £14k.
In your case it's the disregards issue as well.

It seems a total mess and dragging on far longer than it should be, as all you can do is wait.

If it goes to a Tribunal then it ill be a case of getting as much case law and regs to show that the DM has erred, hopefully it won't come to that.

Thanks. Any case law and regs appreciated if we goto tribunal.

Do you think though I am understanding it correctly?

In each AP we get 4k income, we spend 4k in each AP, so 4k should not be considered as capital in each AP until the end of the next AP after the one in which it was received?

So I belive our true capital is 10k. Over the course of the AP our bank account fluctuates between 10k - 14k. Sometimes reaches 14 as sometimes pur income alll comes in around the same time. Like the day before the last day of our AP. But the guy today said "the last day of your AP you had 14k in your account so that's your total capital" 
But I said "no my wife just got paid and most of our benefits just got paid the day before the AP and thats not considered capital until the last day of the next AP as this is what we will live on for next month."
He wasn't having it and was adamant our capital was 14k!!! 

There is this thread on Rightsnet (posted in a different thread) https://www.rightsnet.org.uk/forums/viewthread/21288/
IMHO the lack of posts on that thread would indicate to me there is no clear cut answer, as if there was I would expected to be posted.

If it goes to a Tribunal they will be looking at the actual law and that could be different from any guidance.

Thanks what is the actual law on the subject do you know?

First some fundamental principles of UC we need to understand:

1. A UC award is based on your circumstances on the last day of the AP

2. Monies you have can generally be considered INCOME or CAPITAL. There is a fundamental difference between how UC treats income and capital. At the point of assessment, monies can either be treated as income or capital as defined in the UC Regs (legislation), but not both at the same time (that time being the last day of the assessment period).

Working on the premise that you have around £14k of monies, of which around £4k have been received in the current AP as 'income'.

There are two sources of relevant information - first is the UC Regulations as written in law, this is the definitive source. Second is the DWP's own Advice for Decision Makers (ADM) chapters, which seeks to distill the legislation down into a more readable guidance for DWP Decision Maker (DMs) staff.

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

Dealing with income first, we have ADM chapter H3 Earned Income: https://assets.publishing.service.gov.uk/media/67eaac09f0edd954a99fe991/adm-chapter-h3-earned-income-employed-earnings.pdf

and ADM H5 Unearned Income: https://assets.publishing.service.gov.uk/media/6894a1c93080e72710b2e230/adm-chapter-h5-unearned-income.pdf

Earned income covers anything received/earned from employment (wages) [UC Regs 52-56; ADM H3004]. Unearned income covers most other forms of income (e.g, benefit income, pension income etc) [UC Regs 65-66; ADM H5002]

The UC Regs (and ADM) define how income should be treated in the AP in which it is received. Earned income and unearned income are treated differently.

Generally for earned income (wages), the net amount (gross amount less deductions for tax, NI and pension conts) is used, and a work allowance (if applicable) and 55% taper rate are used, so the UC award is reduced by 55p in the pound for each pound earned (after tax, NI and pension conts) above the work allowance [UC Reg 22 - note the amounts have subsequently been amended, but the principle is the same)

Unearned benefit income (e.g, ESA, JSA, CA) is generally deducted from the award under overlapping benefit rules [UC Regs 66; ADM H5060).

Some benefit income (e.g, PIP/DLA) is disregarded completely, but I cannot find any mention of how PIP is specifically treated. As there is no reference in the legislation to it being disregarded as income, one could argue that it is immediately treated as capital as anything that is not income must be capital (it has to be one or the other, not both at the same time, and if it's not defined as income then it falls to be capital???)

Following on from the part about PIP above, generally, if monies are not specifically defined as income (and therefore are not taken into consideration as income under the above regulations), then they fall to be treated as capital.

Some examples of when 'income' is treated as capital are income derived from capital such as interest earned on account balances, or rent received from a rented property.

Treatment of capital on UC is defined the ADM chapter H1Capital and H2 Capital Disregards:

https://assets.publishing.service.gov.uk/media/65d336b3e1bdec2be1322238/admh1.pdf

https://assets.publishing.service.gov.uk/media/6894a1a7a6eb81a3f9b2e227/adm-chaper-h2-capital-disregards.pdf

ADM H1020 defines what is considered as capital

ADM H1050 states:

When income becomes capital
H1050 Income becomes capital if it has not been spent by the end of the assessment period after the
one in which it was received.

For the purposes of this case, it is important to remember the fundamental difference between INCOME and CAPITAL.

Any income received in the AP, which has been treated as income (either earned income under UC Reg 22; ADM H3) or unearned income (UC Regs 65-66; ADM H5002) cannot then be also treated as capital in the same AP. It's either income or it's capital, but never both at the same time. This is why H1050 specifically refers to the assessment period after the one in which it was received.

So you can clearly argue that UC has taken your £4k of income into account as income (either earned income or unearned income) and therefore those amounts cannot also be considered as capital in the same AP. This should allow you to deduct any amounts of income received within the AP from the total monies held on the last day of the AP.

The part for which I can find no legislation or guidance is how PIP/DLA payments should be treated (if you receive PIP/DLA). They are not mentioned in any of the income related regulations or chapters of guidance, which leads me to believe that as they are not being considered as income, they may immediately become capital. If anyone has any guidance or opinion on this, I'd be interested to see it. As there is no specific guidance, I'd still argue it's income at tribunal and let DWP try to prove otherwise, but you may be on soft ground arguing PIP as income under UC regs.

[Edit: It's just occurred to me that there is also nothing in the UC Regs to say how UC income should be treated either, and whether that amount can be deducted as 'income'].

The reason JCP staff get very confused over this (they cannot see the wood for the trees) is that they completely fail to understand the fundamental difference between how income and capital are treated on UC. They simply see £X amount and to them that is the amount of capital on the last day of the AP. Luckily they are not the ones making the decision, and a DM should have a better understanding of the regulations and guidance.

Spoonie_Turtle

The part about income is very reassuring for me, NedS!

As to PIP/DLA/etc., would it fall under this?

"(3) Subject to paragraph (4), any sums that are paid regularly and by reference to a period, for example payments under an annuity, are to be treated as income even if they would, apart from this provision, be regarded as capital or as having a capital element."

[Paragraph (4) referenced deals with capital payable in installments, which does not sound like it applies to normal benefit payments.]

HillStreetBlues

ADM H1050 states:

When income becomes capital
H1050 Income becomes capital if it has not been spent by the end of the assessment period after the
one in which it was received.

For the purposes of this case, it is important to remember the fundamental difference between INCOME and CAPITAL.

Any income received in the AP, which has been treated as income (either earned income under UC Reg 22; ADM H3) or unearned income (UC Regs 65-66; ADM H5002) cannot then be also treated as capital in the same AP. It's either income or it's capital, but never both at the same time. This is why H1050 specifically refers to the assessment period after the one in which it was received.

So you can clearly argue that UC has taken your £4k of income into account as income (either earned income or unearned income) and therefore those amounts cannot also be considered as capital in the same AP. This should allow you to deduct any amounts of income received within the AP from the total monies held on the last day of the AP.

Isn't a possible issue is the DWP can claim the income has been spent during the AP, as it's been spent they have taken the income into account but there is no income left to deduct.
I hope this isn't the case, but I haven't found anything that states a claimant always spends capital first. Logically a person would spend the income first  and any monies left over at the end of AP going into a savings account


EDIT (moved to a further post