When do gambling winnings become capital for UC?

Altior

By definition the overall average account balance should regress to nil in the long run, unless of course it is deliberately manipulated or miscalculated by the supplier. Granted, legislation doesn't always account for logic. 

Newcad

I've now done some digging and interestingly the ADM chapter H1 'Capital' does not mention credits held in utility accounts at all.

Thinking more about it any such credit may have been left out because such credit would not normally attract interest, and so could not be said to generate any income which is what the deductions for over £6K are about.

However I do note that until last year OVO used to have certain accounts that paid 3% interest on credit balances of above the customers monthly DD amount, that has now stopped in the UK because of Ofgem rules on customer credit balances, although OVO Australia still does it.

Also I've been thinking again about what I wrote in my post above about the possible 'hiding' of capital in Tax Credit migration cases.

For it to be considered as being DoC then the money must have been put somewhere where it would not normally be regarded as capital for benefits purposes.
That's because it couldn't be DoC if the money was still counted as capital anyway.

Taking those factors into account I'm now of a mind that credit balances in utility accounts do not currently count as capital for benefits purposes.

HillStreetBlues

Newcad said:

Thinking more about it any such credit may have been left out because such credit would not normally attract interest, and so could not be said to generate any income which is what the deductions for over £6K are about.

The deduction is just deemed, it has no bearing if it attracts interest or not, think of cash or money in most current accounts.

Newcad said:

For it to be considered as being DoC then the money must have been put somewhere where it would not normally be regarded as capital for benefits purposes.

You can  have a DoC even if you still have the capital. A person buys an expensive car, the car is still capital but disregarded as it's a personal possession but buying it still could be DoC.  

I think it would come down to the reasonable test. If the credit is reasonable in the circumstances then would be classed as paying a bill,  if not then it would be classed as capital as that person would be expected to request a refund of the high balance.

Northern_Wanderer

huckster said:

Does this debate indicate that some benefit claimants are receiving too much in benefits ?

Well, having children and lots of disabability payments in the household can give a very good income without having to work. There are plenty of threads of people asking how to deal with their capital to keep within limits, threads of those taking many holidays. So you may have a point. But then other people really struggle.

born_again

Newcad said:

I've now done some digging and interestingly the ADM chapter H1 'Capital' does not mention credits held in utility accounts at all.

Thinking more about it any such credit may have been left out because such credit would not normally attract interest, and so could not be said to generate any income which is what the deductions for over £6K are about.

However I do note that until last year OVO used to have certain accounts that paid 3% interest on credit balances of above the customers monthly DD amount, that has now stopped in the UK because of Ofgem rules on customer credit balances, although OVO Australia still does it.

Also I've been thinking again about what I wrote in my post above about the possible 'hiding' of capital in Tax Credit migration cases.

For it to be considered as being DoC then the money must have been put somewhere where it would not normally be regarded as capital for benefits purposes.
That's because it couldn't be DoC if the money was still counted as capital anyway.

Taking those factors into account I'm now of a mind that credit balances in utility accounts do not currently count as capital for benefits purposes.

Which begs the question why do they ask about PayPal, as again no interest, but can be used to hide capital far easier. 
Although I do think that no one would have credits in a utility account of excessive amounts, just to avoid exceeding savings limits. As utility co might have to refund.

Newcad

huckster said:

Does this debate indicate that some benefit claimants are receiving too much in benefits ?

I don't think that anyone would say benefits pay too much. (anyone sensible that is).
However some may be getting more benefits then they would normally be eligible for -sort of - at the moment, but not for long.

There are currently a lot of UC recipients who Managed Migrated from Tax Credits with capital that would normally exclude them from receiving UC. (So yes you could say that those people were getting more benefits than strictly entitled to).
Because of the Managed Migration rules then that capital was/is disregarded for 12 UC payments after which time if they still have capital they will no longer be eligible for further UC payments.

Some of those are debating if/how they can reduce their savings and so stay on UC.
We may see more of such discussion up to next April. as the way the TC migrations were ramped-up means that more each month will begin to reach the end of their 12 month disregard.

huckster

I have actually spoken to a few claiming various benefits and they were worried about gradually increasing savings, which would cause them difficulties with means tested benefits.

Bur these tend to be single people living at home with parents. 

I just wonder how many claimants end up exceeding savings threshold on UC, because they are not spending benefits received.

The advice has always been to discuss their situation with their parents/family and to get some advice from CAB or other benefits advice service. Perhaps they could spend some of the money to improve the quality of life. 

Shame there is not some form of ISA or Government investment for those who are are registered disabled where they can invest a small sum which is disregarded by means tested benefits. A possible fund to help with future needs.

peteuk

Altior said:

I know very little about benefits, but I do know a lot about betting!

How would it be interpreted if someone in receipt of means tested benefits placed a bet on a future event?

Just hypothetically, for an example, they had a £0 balance, deposited £100 and put it on Labour to win the next UK general election.

Their cash balance/wallet in the betting account is, once again, back to £0. But there is a betting exposure of £100, which likely won't be settled until 2029.

In a nutshell, does betting exposure still count as capital, or just the available cash/wallet? There's obviously no way for anyone looking into the affairs to know that exposure exists anyway, unless they accessed the account and knew their way around the site. So the question is of a hypothetical nature, though a curious one for me.

There’s a difference between having money on a live bet and having credit on the account.  Once bet unless you tap out, the money is not there for you to access freely.  If you tap out or have money as credit you can withdraw this.

Put another way, I place £30 into my lottery account, I put 6 balls on lotto for the weekend, I only have £28.00.  I decide I feel lucky and do an instant win on line and win £30.  I now have £58.  I withdraw £30 so I’ve spent nothing, but my capital is £58.  If I think I’m lucky and put another two lines on the lotto, my bank has the £30, my lotto account £24 and I have £6 of lotto tickets.  

I only have access to £54, until the numbers come up on one of the tickets….

peteuk

Newcad said:

huckster said:

Does this debate indicate that some benefit claimants are receiving too much in benefits ?

I don't think that anyone would say benefits pay too much. (anyone sensible that is).
However some may be getting more benefits then they would normally be eligible for -sort of - at the moment, but not for long.

There are currently a lot of UC recipients who Managed Migrated from Tax Credits with capital that would normally exclude them from receiving UC. (So yes you could say that those people were getting more benefits than strictly entitled to).
Because of the Managed Migration rules then that capital was/is disregarded for 12 UC payments after which time if they still have capital they will no longer be eligible for further UC payments.

Some of those are debating if/how they can reduce their savings and so stay on UC.
We may see more of such discussion up to next April. as the way the TC migrations were ramped-up means that more each month will begin to reach the end of their 12 month disregard.

If youre not wise to a persons situation, it’s easy to think that someone on benefits having 3 holidays a year is on too much benefits.  But once you dig down, the benefit system does allow (and rightly) for some people to correctly claim, with having little outgoings which means they accumulate savings/capital.  I’m also mindful some people need to go abroad during the winter due to illnesses and diseases affected by the weather.

Grumpy_chap

Newcad said:

ADM chapter H1 'Capital' does not mention credits held in utility accounts at all.

Thinking more about it any such credit may have been left out because ...

I doubt there is any because.
I doubt the case was ever really considered.

Let's be practical - the normal way that a utility account gets to a credit situation is the balance at October accrued from regular monthly payments so that a management amount is to be paid over the winter period.  Ordinarily back close to nil by March.  Often called a "budget plan" or similar.

The scenario that has been discussed in this thread is an individual paying money into the utility account so that it holds a credit balance larger than would be the case under a normal "budget plan".
That is probably and edge case.
It also does not need to be specifically mentioned as it is captured under the general catch all:
https://www.gov.uk/guidance/universal-credit-money-savings-and-investments#reducing-your-money-savings-and-investments-on-purpose

The utility account balance may not be particularly well aligned to a credit balance on a betting account.