UC and if you go over 16k?

huckster

The purpose of the gift may be for you to spend it straightaway.  But arguably you could fall ill and not be able to spend it straightaway. And then you would have to pass the money back to the lender to avoid going over £16000 at the end of the assessment period.

Universal Credit is based on assessment periods, with the assessment completed on the last day of the assessment period. There is no pro rata benefit entitlement for part of an assessment period.

What you have been told about declaring above £16000 during an assessment period and having the claim closed is a bit of a grey area. How quickly are UC going to be able to evaluate whether the amount over £16000 is a correct sum or whether the amount is lower as some would be disregarded ?

The decision/evaluation of capital may still be outstanding when you come to report capital below £16000 on the last day of the assessment period. 

Reporting capital of more than £16000 by the end of an assessment period, would cause the next UC payment statement to be blocked from being issued. This then allows the Job Centre to arrange for documents e.g. Bank Statements to be provided, so a decision can be made regarding capital.

I think you would be a complete pain in the *ss  if you reported twice within an assessment period. Half way reporting say £16500 and then on the last day of the assessment period reporting you only had £15900. Could you imagine the impact on UC services if claimants were reporting multiple changes to capital during assessment periods.

The intention of benefit legislation must be to ensure benefits are not overpaid. Given that UC awards are based on assessment on the last day of an assessment period, this would appear to be the most practical time to report changes to capital.

blackstar

Thanks. Are cost of living payments permanently disregarded and never regarded as capital? Even if it tips you over 16k?

What about a help to save bonus?

How about my wife's yearly work bonus which is subject to NI and tax etc? 

huckster

You could come up with a large range of different issues that affects how much capital you hold at any one time.

Yes I think COL payments are permanently disregarded.

Help to save bonus would be part of your capital.

Work bonus not spent by the end of the following assessment period would form part of your capital.

If I were in this position, I think I would find reason to spend say £2000 on essentials and save myself from potential hassles. 

blackstar

Yes I hear you. Thank you.

Would you in our situation simply either

A)  make sure you never ever go over 16k even from income that's spent right away and always back under 16k at end of next assessment period? 

Or 

B ) would you not be quite as careful and just ensure there's no chance of any gifts or bonus from for instance help to save pushing you over 16k and not worry about income pushing you over 16k for a temporary time during the AP?

Also When declaring savings each month or whenever. Do I just deduct the cost of living payments? But for how long ? How can it be known if we actually spend the cost of living payments as it just gets lumped into everything else??.

huckster

A would be my choice.

There is no time period for the COL payment. Legislation just says is not considered when considering benefit eligibility.

BUT you would have a hard job proving you had not spent the COL, unless you paid it into a separate account and have never touched it.  So I don't think I would be deducting it from current capital unless I had proof of not spending it.

Spoonie_Turtle

huckster said:

A would be my choice.

There is no time period for the COL payment. Legislation just says is not considered when considering benefit eligibility.

BUT you would have a hard job proving you had not spent the COL, unless you paid it into a separate account and have never touched it.  So I don't think I would be deducting it from current capital unless I had proof of not spending it.

That's interesting.

I'd thought that if your capital never went below the COL total after receiving them then that could show you hadn't spent them, as any other capital spent could be from other sources.

For instance I didn't spend them, and my savings have slowly accumulated since then due to unspent income.  In spending on anything I certainly haven't spent more than the amount of income that accumulated after receiving each COL Payment.  It would be an absolute pain to work out and prove and I don't think my own brain would be up to it, but for people without such severe brainfog I'm sure it would be doable.

However it is good to hear from someone who actually deals with this in reality.  Food for thought, especially for those of us counting on the COL disregard to keep our capital below a relevant threshold.

Yamor

Spoonie_Turtle said:

huckster said:

A would be my choice.

There is no time period for the COL payment. Legislation just says is not considered when considering benefit eligibility.

BUT you would have a hard job proving you had not spent the COL, unless you paid it into a separate account and have never touched it.  So I don't think I would be deducting it from current capital unless I had proof of not spending it.

That's interesting.

I'd thought that if your capital never went below the COL total after receiving them then that could show you hadn't spent them, as any other capital spent could be from other sources.

For instance I didn't spend them, and my savings have slowly accumulated since then due to unspent income.  In spending on anything I certainly haven't spent more than the amount of income that accumulated after receiving each COL Payment.  It would be an absolute pain to work out and prove and I don't think my own brain would be up to it, but for people without such severe brainfog I'm sure it would be doable.

However it is good to hear from someone who actually deals with this in reality.  Food for thought, especially for those of us counting on the COL disregard to keep our capital below a relevant threshold.

Your original thoughts are actually correct.

See the answer to Q2 of Annex C in this document (although the discussion there is about compensation payments, the same would apply to any disregarded capital):

https://assets.publishing.service.gov.uk/media/631af6838fa8f5020ac91004/ssac-minutes-8-december-2021.pdf

However, the authors of the Sweet and Maxwell commentary to Social Security Law do suggest that:

"That approach [their capital threshold is effectively increased by the amount of the original payment for the duration of that period] ought for consistency to apply to all capital disregards applying to payments rather than other assets, although probably if funds derived from any sort of compensation payment are held in a segregated account with no payments in from any other source (whether subject to a trust or not) a payment out of that fund would go to reduce the amount disregarded."

And I would add that the same would probably apply if the balance of the account into which the disregarded capital was paid into reduces to below the amount of the disregarded capital.

blackstar

Huckster thanks that's helpful to know if you were me you would ensure you never went above 16k, not even temporarily with income. Correct?

So the COL payments you could simply when you get it, transfer it straight into another empty account and leave it there and keep it as a savings that's forever disregarded for UC purposes. and you can keep for emergency if ever needed? Right?
But you don't have to do this though so long as your capital never falls below the amount of the COL payments you received?

Very interesting we got COL payments in November last year. Does this mean I can state that this certain sun of money ie the col payments has to be disregarded when we provide them our savings the next time. 

We have been on UC since Sept 2024 after migrating over to UC with capital protection as had over 16k in savings. However need to go under 16k soon as have urgent repairs coming up. 

But that may make things very confusing as what if they then go back for last 3 years of COL payments and exclude them from UC as they would have used the ones we got before we claimed UC as part of our overall capital when we claimed and maybe if they had disregarded them then they would not have concluded we had over 16k of savings hence not have been given months of capital disregard?
What should I do? Should I tell them our cost of living payments we're not disregarded when I came in and gave you all my bank accounts and you added up all our capital? We didn't know COL payments were disregarded for UC purposes so have no idea to mention it?
What should we do?

When were the COL payments made? And what did they come under on the statements? Had a look for them but couldn't find them? We are in Scotland 

Think we had 3 payments of £650, £900 and £900  over last 3 years so a total of £2,450. Our savings when we claimed UC were 19k. We have never been below the amount of COL payments we received so doesn't that mean when our Transitional protection ends we should have £2,450 disregarded until or unless we ever fall.under £2,450 in savings?

Is there any kind of COL payments line I can call and ask them the dates and amount of the COL payments just so I can be sure as I'm not 100% but think it's right

huckster

Sounds like a game being played to see whether and how UC deals with capital slightly below or above £16000.

The COL payments were to help people manage at the time, due to economic fall out from Covid. We are now a few years on from when the COL payments were made. I note Yamors comments above and the COL payments may have inflated your current savings. But you would have to argue this, if Decision Makers queried the true level of savings and what can be disregarded.  Perhaps you spent the COL payments and the capital you hold, has nothing to do with COL.

The COL payments are all documented on Government websites if you search. You can ask your Bank for statements showing payments in.

HillStreetBlues

Spoonie_Turtle said:

That's interesting.

I'd thought that if your capital never went below the COL total after receiving them then that could show you hadn't spent them, as any other capital spent could be from other sources.

For instance I didn't spend them, and my savings have slowly accumulated since then due to unspent income.  In spending on anything I certainly haven't spent more than the amount of income that accumulated after receiving each COL Payment.  It would be an absolute pain to work out and prove and I don't think my own brain would be up to it, but for people without such severe brainfog I'm sure it would be doable.

However it is good to hear from someone who actually deals with this in reality.  Food for thought, especially for those of us counting on the COL disregard to keep our capital below a relevant threshold.

That is my view as well, it the same with backdated benefit payments.
I have over £6k capital as £2k is from a backdate. If it was any other way DWP could just claim I spent the backdate straight away, so no longer disregarded.
Disregarded capital should sit and the bottom of any capital and the last to be spent.