ESA to UC migration

System

This discussion was created from comments split from: Universal credit and the £6000 threshold.

ginocottage

Hi.  I'm in the process of migrating from ESA to UC   I have debts I need to clear and want to know about this threshold of £6000.. savings... I can't find any rules about how often I can withdraw money from my pension without affecting my UC payments.. its been 2 years since I last withdrew £5000 while on ESA to clear part of a long term debt and I want to do it again , I've contacted the DWP and spoken to 6 agents and 1 compliance officer.. the compliance officer said as long as it's no more than£6000 is fine,  and 2 agents agreed with that,  4 agents didn't know as its a grey area .. the DWP guess whether you are trying to pay the system with regular payments as savings but they could be regarded as earnings if too frequent,  but there are no fixed rules in place as to what is too frequent.  Which I find ridiculous.. how can you stay within the rules if there are no parameters? I've messaged my with coach but had no reply... but the last time I did it on ESA the HMRC informed the DWP of the 25% tax I payed in my withdrawal and they said it was earnings and deducted £89 pw from my benefits and it took me 5 months of calls and letter sending to get that decision changed.. and I don't want to go through all that again.  Does anyone know the actual rules on this as online it says you can draw down under £6000 from your pension as often as you like without affecting your UC payments... but I'm very wary of this.  Thankyou in advance for any help. 

huckster

You need to post your own thread,
The site team may remove your post as the thread relates to someone else.

Grumpy_chap

ginocottage said:

Hi.  I'm in the process of migrating from ESA to UC   I have debts I need to clear and want to know about this threshold of £6000.. savings... I can't find any rules about how often I can withdraw money from my pension without affecting my UC payments.. its been 2 years since I last withdrew £5000 while on ESA to clear part of a long term debt and I want to do it again , I've contacted the DWP and spoken to 6 agents and 1 compliance officer.. the compliance officer said as long as it's no more than£6000 is fine,  and 2 agents agreed with that,  4 agents didn't know as its a grey area .. the DWP guess whether you are trying to pay the system with regular payments as savings but they could be regarded as earnings if too frequent,  but there are no fixed rules in place as to what is too frequent.  Which I find ridiculous.. how can you stay within the rules if there are no parameters? I've messaged my with coach but had no reply... but the last time I did it on ESA the HMRC informed the DWP of the 25% tax I payed in my withdrawal and they said it was earnings and deducted £89 pw from my benefits and it took me 5 months of calls and letter sending to get that decision changed.. and I don't want to go through all that again.  Does anyone know the actual rules on this as online it says you can draw down under £6000 from your pension as often as you like without affecting your UC payments... but I'm very wary of this.  Thankyou in advance for any help. 

This would be better as a separate thread, but some comments that may help:

The amount of capital is assessed at the end of the assessment period (AP). 
Income received during the AP is not capital at the end of the AP.

I do not know whether the £5k pension draw down is considered as capital or as income.  The rules are not obvious (to me at least) - hopefully someone will be along who can advise.
It does make a difference.
If the pension sum is considered as income, then it will affect your UC entitlement for that AP.
If the pension sum is considered as capital and you use the sum to pay off debts, then ensure the debts are paid within the same AP as the pension drawdown is received.  Repayment of debts is not DoC (deprivation of capital).

DWP staff / agents / officers / Work Coach / Decision Maker will usually be unable to comment on what may happen if you take a certain action.  It is not their role to advise on how to retain / avoid losing benefits entitlement.  They would also risk giving incorrect or misinterpreted comment if you said "I plan to do x" but you actually do "something ever so slightly different from x".  DMs etc will only confirm any impact after the event.

I assume you are over 55 so able to access pension funds without penalty.  If you are drawing pension now to fund living expenses / clear debts, what provision do you have left for funding retirement?

MSE_ForumTeam5

@ginocottage we've split your question into this new thread