Universal Credit Finances Interview

wwfwilla

Hi everyone,
Today my brother had a meeting with DWP where they check his finances for any hidden savings etc. He isn't well mentally and my mum was there as his appointee to answer all the questions (she is his carer). For reference my brother barely speaks at times.

My mum was answering the questions so she has a reasonable understanding of his finances as they are quite basic (bank account and an ISA).
More or less straight after the call it came to her that my brother has shares. 
They are overseas shares. He used to work at Asda (when they were owned by Wal-Mart) and had a number of shares. He still has them and they are held in Wal-Mart (in America) and held in dollars.
She has made a simple mistake as she was giving answers on behalf of my brother and it never came to mind. My brother gets a yearly statement and then never thinks about them again. My brother would have been 'switched off' during the meeting and isn't always aware of what he's being asked anyway.
My mum panicked and called me straight away. I said I'd double check the best way to resolve this and get back to her - which is why i'm here.

Should we put a message in the journal or something?
I'm under the impression that even when converted from dollars to pounds that it will be over the £16,000 threshold by maybe £10k (I caught sight of last years statement very briefly).
He's had these shares for maybe 20 years and stopped contributing at least 10 years ago. Despite not contributing a lot Wal-Mart shares have rocketed over that time.

I notice from the guidance it states if he paid off a debt he can bring down the value of his assets. My brother doesn't have any debts but about 5 years ago gave me some money towards a house deposit. Could he do the same again and give me money to overpay my mortgage or similar? I don't want to fall foul of the rules and be in any grey area though.
I only ask because my brother worked part time at Asda and through his Asperger's never really went out much or had many friends. Despite being on a low income (usually below the tax threshold) he invested as much as he could in the shares as he wasn't spending it elsewhere. He's never earned a lot of money, he just put a lot of it aside as he didn't spend it on anything. It almost feels unfair that because he didn't go out and spend his money on shopping, cinema, restaurants etc like everyone else and just sat in his room every night that he's been caught foul of the rules by putting his extra to one side when he's now in need of an income.

Thanks for your time.

Brie

First - check on the value and see where that gets you.  If the value is low and he has no other savings then it's all fine.  Maybe consider selling these to crysalise the value and then he can spend the money himself over the coming months/years.

If they do have a substantial value then disposing of them in any way other than paying his own debts/needs would definitely be a no-no.  It's referred to as deprivation of assets.  Of course if you/mom had lent him money in the past and he paid you back that would be fine.  But some sort of proof might be required.  

An alternative would be seeing if there is something that needs upgrading around his (mom's?) home.  New TV, new tires for the car, new washing machine etc.  All legitimate expenses.  

peteuk

The two thresholds are £6K and £16K.

At the point of capital being £6K UC is reduced by £4.35 for every £250 or part of there in, for example £6200 would mean a reduction of £4.35.  Capital of £6300 would mean a reduction of £8.70.

At the £16K point then entitlement to UC ends.

As for debts and purchasing - yes you can pay off debts (noted he has none) or buy something as a replacement if you can justify it.  For instance a new kitchen at a reasonable cost, if you can show the old one was in need of repair. 

Gift money is seen a deprivation of capital and will be treated as he still has the money.  DWP will work out how long it will take for that amount to naturally be spent and then work out the reduction or when he can reapply.

The other news is, at the point of having over £6K, UC will need to recalculate his payments and the point of having £16K end his claim.  At which point there will be an amount of overpayment due to be returned.

As for the fairness, some would ask why UC is paying him when he is sat with potentially £16K in shares.  He put it aside for when he needed an income so that time has arrived.

wwfwilla

Thanks so far.
I'm almost certain he has about £25,000-£30,000 in the shares.

Even if he found something to spend his money on i'm guessing it'd only be valid from that point and that the UC money he'd had over the previous year would be needed to be repaid in full?

peteuk

wwfwilla said:

Thanks so far.
I'm almost certain he has about £25,000-£30,000 in the shares.

Even if he found something to spend his money on i'm guessing it'd only be valid from that point and that the UC money he'd had over the previous year would be needed to be repaid in full?

Overpayments can be paid over time or can be replayed through reducing the amount of benefits received, however if your correct then he wont be receiving benefits.

Id also add they may take into account the amount he gave you and in calculation of his capital consider it as still in his account. 

elsien

For future reference, as his appointee it is your mum’s responsibility to make sure that any changes are declared the DWP. At whatever time they happen, not just when there is an interview going on.
So she probably needs to doublecheck anything else that might have been overlooked as well. 

I would also ignore Brie’s suggestion about a new TV for the family home or new tyres on his mother’s car, if he is not living independently. That is clearly spending money to try and get rid of it because he’s not replacing something of his own that has worn out. 

wwfwilla

I just had a word with my mum and she says that because he is unwell he gets an enhanced rate of UC and is about £800 a month rather than the standard £400.
I'm guessing he'd have to pay all of this back still?

wwfwilla

Whats the cut-off point for what i'd describe as a gift?
For example I have about £8,000 of credit card debt. I'm sure my brother would rather gift me £8,000 rather than find something in the house to spend £8,000 on?

Rubyroobs

Yes it will all need to be paid back if he has assets over 16k. 
If he has worked and paid NI contributions in the past 2-3 years he could consider claiming new style ESA instead which is not means tested.

Muttleythefrog

wwfwilla said:

Whats the cut-off point for what i'd describe as a gift?
For example I have about £8,000 of credit card debt. I'm sure my brother would rather gift me £8,000 rather than find something in the house to spend £8,000 on?

I would strongly advise them trying to dispose of assets while clearly there is going to be an issue of overpayment for some time. Gifting you thousands in money will surely be seen as a clear case of deprivation of capital (in an environment where subjectivity can and does apply)... and so they would consider he still has it... paying off his own debts is completely different and is fine under UC rules.

Agree with above advice... he with mother or mother if appointee needs to really trawl the books to get a handle on this before it gets any further out of hand (last thing needed is a future fraud investigation). And offer to repay any overpayments to avoid further actions. The capital should have been declared.

Yes to your question on retrospective spending... he (or appointee) cannot spend money tomorrow and have it considered as spent last year. Ultimately yes people behave differently with money but logically the means testing system is unlikely to facilitate people holding large savings while they claim they need income from state to live - your brother surely knew of excessive capital from annual statement reminders if nothing else and chose not to declare. 

born_again

wwfwilla said:

Whats the cut-off point for what i'd describe as a gift?
For example I have about £8,000 of credit card debt. I'm sure my brother would rather gift me £8,000 rather than find something in the house to spend £8,000 on?

There is no cut off for gifts. 
Paying off your debt, could be seen as DOA.

UC will want to see the history on the shares. So they can calculate the amount that will need to be repaid. So someone is going to have to find or get copies of the annual statements.
Given holding shares there should also be a dividend payment every so often as well.

As to selling shares. Capital gains tax may come into play... So be careful there.