Small Pots Pension effect on UC

saintscouple

Hello,

I would just like to clarify something.

In the near future i will be drawing from my pension under small pots rule, aprox £7k
I understand this is treated as capital / savings in UC, and also anything over £6k will have £4.35 deducted for every £250 or part of over the £6k

My question is, in the same assessment period as when the lump sum hits my account, could i spend the excess of £6k, so my account shows a balance of less than that amount, and then declare it to UC meaning I avoid any deductions? 

Thank you 

DE_612183

I think you have until the end of the NEXT assessment period to dispose of the excess to avoid deductions - you still have to report however much you have left of the £7k

HillStreetBlues

DE_612183 said:

I think you have until the end of the NEXT assessment period to dispose of the excess to avoid deductions - you still have to report however much you have left of the £7k

No, as it's capital it will be the same AP that it's received.

HillStreetBlues

saintscouple said:

My question is, in the same assessment period as when the lump sum hits my account, could i spend the excess of £6k, so my account shows a balance of less than that amount, and then declare it to UC meaning I avoid any deductions?

Yes, as long as the end of the AP capital is £6k or below there aren't any deductions

saintscouple

Thank you for the clarification, much appreciated. 

NedS

I would add that what you spend it on is relevant and will be taken into consideration, to ensure it is not deliberate deprivation of capital in order to increase your award of UC. You should check the deprivation of capital rules carefully.

saintscouple

Thanks NedS,

I cannot find official guidance of the rules, other than i have not deprived myself of capital if it were used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

We have a holiday each year, so guess we can use money for that as long as it´s a similar cost to previous years, and we can do with some new appliances. 

I guess it just comes down to the decision makers judgement when I inform them of the savings. 

HillStreetBlues

saintscouple said:

Thanks NedS,

I cannot find official guidance of the rules, other than i have not deprived myself of capital if it were used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

We have a holiday each year, so guess we can use money for that as long as it´s a similar cost to previous years, and we can do with some new appliances. 

I guess it just comes down to the decision makers judgement when I inform them of the savings. 

How much over the £6k will you be when you get pension payments? and are you allowing for income?

saintscouple

HillStreetBlues said:

saintscouple said:

Thanks NedS,

I cannot find official guidance of the rules, other than i have not deprived myself of capital if it were used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

We have a holiday each year, so guess we can use money for that as long as it´s a similar cost to previous years, and we can do with some new appliances. 

I guess it just comes down to the decision makers judgement when I inform them of the savings. 

How much over the £6k will you be when you get pension payments? and are you allowing for income?

£1k over and not allowing for income. 

HillStreetBlues

saintscouple said:

HillStreetBlues said:

saintscouple said:

Thanks NedS,

I cannot find official guidance of the rules, other than i have not deprived myself of capital if it were used to:

• pay off or reduce a debt

• pay for goods and services if the purchase was reasonable in the claimant's circumstances

We have a holiday each year, so guess we can use money for that as long as it´s a similar cost to previous years, and we can do with some new appliances. 

I guess it just comes down to the decision makers judgement when I inform them of the savings. 

How much over the £6k will you be when you get pension payments? and are you allowing for income?

£1k over and not allowing for income. 

If your UC payment  (or other benefits & income) is over £1k then even with £7k monies at the end of your AP you aren't over the £6k lower capital limit.
With that amount of money DoC will not be a factor.

NedS

HillStreetBlues said:

If your UC payment  (or other benefits & income) is over £1k then even with £7k monies at the end of your AP you aren't over the £6k lower capital limit.
With that amount of money DoC will not be a factor.

They've received £7k of capital in the AP. If they then spend £1k of that capital during the rest of the AP to take it under £6k by the end of the AP, then clearly DoC is relevant. It is income that is not relevant (in this case) as it is not capital. This isn't about income being classed as capital in the AP in which it was received. The £7k was never income, it was always capital from the day it was received.