Migrating from ESA to UC after receiving backpayment

MrHeisenberg

Spoonie_Turtle said:

PIP and ESA regular payments are only disregarded for the assessment period in which they are paid.  For starting a UC claim I think it would be the most recent PIP payment and ESA payment that are disregarded, to be on the safe side (as I understand it - although welcome correction where needed, as always - for income-based legacy benefits the disregard was for the relevant payment cycle of the benefit paid, which for ESA is two weeks and PIP is 4 weeks).  But once your claim is submitted, it is simple that for each monthly assessment period you disregard benefit payments received in that monthly period.

Cost of Living payments are disregarded if they remain unspent.  How you work out whether they were spent or not is up to you really, as mixing capital from different sources (which the vast majority of us do!  It's normal for savings all to end up in the same account) means any division is going to be fairly arbitrary unless your total ever dropped to 0.

Many thanks.

Yes, very hard to neatly separate that out at the best of times it seems, not least as one has to trawl through bank statements.

So does that mean that my last PIP and ESA payments are disregarded for the purposes of working out my current capital? Presumably housing benefit is disregarded in a similar way too?

I am minded to call the DWP first thing in the morning and inform them that I am a little worried that I may have inadvertently gone over the £6K threshold, and perhaps ask them to do the calculations, as that way they can't apportion blame on me if I get them or have gotten them wrong. Also, not sure that it is fair on claimants who suffer from debilitating health problems to be hit with these complex issues.

MrHeisenberg

Robbie64 said:

This is my take on things, so not necessarily correct. 

If you received £16k as a back payment in 2021 and the lowest your bank account has been since then is £7k then logic dictates that you spent £9k of the back money.

Take £9k off your bank balance and what do you have left?

The Cost Of Living Payments throw something of a spanner in the works - did you get some COL payments AFTER your balance was down to £7k? If so, ignore then too. If not, then you either spent them at the time or more money from your backpayment has to be considered to have been spent.

As I posted, the above is my take on things but it makes sense to me.

Yes, indeed. That leaves around £6K, which is dangerously close to the limit, or exceeds it slightly. 

My account was down to £7K on 5 March 2023. Seems the last cost of living payment was in February 2024. Not sure when the others were paid.

Robbie64

There's a full list of Cost Of Living Payments at https://www.gov.uk/guidance/cost-of-living-payment

The good news is, that means you can disregard COLP for:

ESA: £900 (3 payments)

PIP: £150 (1 payment)

All the above were paid after 5 March 2023. The payments total £1050 which will reduce your capital for benefit purposes by the same amount. if you are close to the £6k limit (after deducting £9k for the back money you have spent) then the £1050 as above will reduce it further. It also means you don't need to contact the DWP tomorrow if all the above calculations (£10,050 in total) take your savings well below £6k.

When you claim UC, you will be presented with a page which is headed "Things you need to tell us about" for money, savings and investments. There are two parts that will apply to you:

Welfare support payments

Backdated benefit payments

I'm assuming clicking on each of these these will present another screen where you will then input details of the sums involved. The DWP will then decide whether these sums can be disregarded as capital / savings.

HillStreetBlues

Robbie64 said:

This is my take on things, so not necessarily correct. 

If you received £16k as a back payment in 2021 and the lowest your bank account has been since then is £7k then logic dictates that you spent £9k of the back money.

Take £9k off your bank balance and what do you have left?

That's calculation is incorrect as OP now has £15k -£9k is £6k
OP's capital dropped to £7k so that's as much as can be disregarded any sum build up after that is no longer disregarded. The sum needs to be £15K - £7k so will be £8k of capital not disregarded.


EDIT with factoring in CoL payments it will depend on when the balance dropped to £7k

MrHeisenberg

Robbie64 said:

There's a full list of Cost Of Living Payments at https://www.gov.uk/guidance/cost-of-living-payment

The good news is, that means you can disregard COLP for:

ESA: £900 (3 payments)

PIP: £150 (1 payment)

All the above were paid after 5 March 2023. The payments total £1050 which will reduce your capital for benefit purposes by the same amount. if you are close to the £6k limit (after deducting £9k for the back money you have spent) then the £1050 as above will reduce it further. It also means you don't need to contact the DWP tomorrow if all the above calculations (£10,050 in total) take your savings well below £6k.

When you claim UC, you will be presented with a page which is headed "Things you need to tell us about" for money, savings and investments. There are two parts that will apply to you:

Welfare support payments

Backdated benefit payments

I'm assuming clicking on each of these these will present another screen where you will then input details of the sums involved. The DWP will then decide whether these sums can be disregarded as capital / savings.

Sincere thanks.

Well, that is massively relieving. 

The exact calculations are as follows then:

Backpayment: £16008.40.
My account balance on 5 March 2023: £6800.80.
My account balance today: £14900.77.
£16008.40 - £6800.80 = £9207.60
£14900.77 - £9207.60 = £5693.17

Cost of living payments:
£900.00 + £150.00 = £1050
£5693.17 - £1050 = £4,643.17

Total capital for the purposes of ESA and UC: £4,643.17

Is that correct?

I can't remember the Welfare support payments section, but must may have completed it, as it is not on my to-do list.

Yes, I got stuck on this question:

"How much do you have in backdated benefit payments, in pounds and pence?"

Seems the answer is £5693.17?

Robbie64

HillStreetBlues said:

Robbie64 said:

This is my take on things, so not necessarily correct. 

If you received £16k as a back payment in 2021 and the lowest your bank account has been since then is £7k then logic dictates that you spent £9k of the back money.

Take £9k off your bank balance and what do you have left?

That's calculation is incorrect as OP now has £15k -£9k is £6k
OP's capital dropped to £7k so that's as much as can be disregarded any sum build up after that is no longer disregarded. The sum needs to be £15K - £7k so will be £8k of capital not disregarded.


EDIT with factoring in CoL payments it will depend on when the balance dropped to £7k

Thanks. I had a feeling I'd got it the wrong way around and that the sum still to be disregarded for the back pay should be £7k and not £9k but my mind went blank.

MrHeisenberg

Robbie64 said:

HillStreetBlues said:

Robbie64 said:

This is my take on things, so not necessarily correct. 

If you received £16k as a back payment in 2021 and the lowest your bank account has been since then is £7k then logic dictates that you spent £9k of the back money.

Take £9k off your bank balance and what do you have left?

That's calculation is incorrect as OP now has £15k -£9k is £6k
OP's capital dropped to £7k so that's as much as can be disregarded any sum build up after that is no longer disregarded. The sum needs to be £15K - £7k so will be £8k of capital not disregarded.


EDIT with factoring in CoL payments it will depend on when the balance dropped to £7k

Thanks. I had a feeling I'd got it the wrong way around and that the sum still to be disregarded for the back pay should be £7k and not £9k but my mind went blank.

Yes, I am concerned the correct calculation is as follows:

Backpayment: £16008.40.

My account balance on 5 March 2023: £6800.80.

My account balance today: £14900.77.

£14900.77 - £6800.80 = £8099.97.

Cost of living payments:

£900.00 + £150.00 = £1050

£8099.97 - £1050 = £7049.97

If one doesn't disregard my most recent ESA, PIP and HB payments, I may have gone £1049.97 above the £6000 limit. This is not good.

Robbie64

You can disregard the most recent benefit payments as they would not yet be considered capital. Does this take your capital to below £6,000?

Given the money you have in the bank, you are constantly sailing very close to the lower capital limits. It would be better to try and get your capital to an amount which isn't going to require multiple disregards of the money you have. Backdated payments, COLP and also current benefit payments currently need to be disregarded to take your capital below £6k. Obviously don't spend money for the sake of it, but with regards to the money you have recently received (ESA, PIP and HB) are there any bills you need to pay? Are you holding on to your HB or have you now paid this as rent?

MrHeisenberg

Robbie64 said:

You can disregard the most recent benefit payments as they would not yet be considered capital. Does this take your capital to below £6,000?

Given the money you have in the bank, you are constantly sailing very close to the lower capital limits. It would be better to try and get your capital to an amount which isn't going to require multiple disregards of the money you have. Backdated payments, COLP and also current benefit payments currently need to be disregarded to take your capital below £6k. Obviously don't spend money for the sake of it, but with regards to the money you have recently received (ESA, PIP and HB) are there any bills you need to pay? Are you holding on to your HB or have you now paid this as rent?

Yes, these are the figures:

HB: £391.24 
ESA: £489.30
PIP: £295.60

Total: £1175.54

Sadly, it seems my bank balance has been around £14K to £15K since September 2024. At one point, it seems to have even gone just over £16K, so it looks like I may need to let the DWP know, and just ask them to check if there has been an issue, and just explain that my health has been very poor. 

If I have been over the limit, this would only have been on and off for the past 43 weeks, and probably no more than around £1000. So, if every £250 of the remaining £1,000 counts as £1 of weekly income, £4 should have come off my weekly ESA payment since September 2024, that would mean that I owe the DWP around £172 only, plus a £50 penalty, which is hardly a major problem, especially if I have too much capital. May have to pay the Council something along those lines too I believe? I suppose I am more worried about being accused of fraud, when all this was a genuine mistake or oversight on my part.

Yes, I could try make a payment into my electricity account etc. Need to give all this some thought. Don't want to be accused of "deprivation of capital" (not quite sure how that applies in practice), so what the hell does one do? All this puts people between a rock and a hard place.

Rent gets paid on the 13th of every month.  

Spoonie_Turtle

You are allowed to spend your income as you see fit; deprivation of capital only starts to apply if you unreasonably spend savings over £6,000. 
So within the rules it's permissible to spend enough of your income each month to ensure your savings don't go above £6,000 (or to ensure they don't increase, if they are above £6,000).