Non-priority debts and deprivation of capital

ManyWays

Some comments on a couple of peoples points:

I want to pay off some of my non-priority debts, especially if I am given a good settlement offer by the debt collection agency, but don't want that to be held against me at some point in the future, especially as I am claiming Universal Credit
Unless you had more than 6k in savings, there is no question of any of this applying, as below 6k the DWP has no interest in your savings at all. Most people on UC are nowhere close to that amount. If you are saving up money to make settlement offers, make them one by one as soon as you can, dont wait until you have saved 10k up to make several at one go. And dont wait until you are offered a settlement, propose one yourself

I'm wondering what sort of edge case it would be for someone to have more than £16000 in savings AND have debts, either priority or not. 
Why would they owe family money too?  
You have just inherited £25,000 from your grandmother's estate...

RAS

The other factor with UC, as per advisors in the relevant MSE forums, is that money received during a payment cycle is not counted as capital unless it remains in an account you own at the beginning of the next cycle. 

So if you can F&F that £25k within the month it doesn't count as capital. So sort out the rent, CT and utilities arrears, replace the fridge freezer if required, or buy heavy curtains and F&F some other debts. All legitimate.

MrHeisenberg

ManyWays said:

Some comments on a couple of peoples points:

I want to pay off some of my non-priority debts, especially if I am given a good settlement offer by the debt collection agency, but don't want that to be held against me at some point in the future, especially as I am claiming Universal Credit
Unless you had more than 6k in savings, there is no question of any of this applying, as below 6k the DWP has no interest in your savings at all. Most people on UC are nowhere close to that amount. If you are saving up money to make settlement offers, make them one by one as soon as you can, dont wait until you have saved 10k up to make several at one go. And dont wait until you are offered a settlement, propose one yourself

I'm wondering what sort of edge case it would be for someone to have more than £16000 in savings AND have debts, either priority or not. 
Why would they owe family money too?  
You have just inherited £25,000 from your grandmother's estate...

I received a £16,000 back payment from the DWP, and I haven't been going on a spending spree or been depriving myself of capital. The DWP have disregarded that sum indefinitely. That has put me in a difficult situation now, as not everyone is bound by the DWP's disregard rules, which has the underlying principle that no means-tested claimant should be penalised (denied mean-tested social security benefits) for being owed arrears.

ManyWays

Are you currently trying to apply for social housing? 
Do you have any debts?

kimwp

MrHeisenberg said:

ManyWays said:

Some comments on a couple of peoples points:

I want to pay off some of my non-priority debts, especially if I am given a good settlement offer by the debt collection agency, but don't want that to be held against me at some point in the future, especially as I am claiming Universal Credit
Unless you had more than 6k in savings, there is no question of any of this applying, as below 6k the DWP has no interest in your savings at all. Most people on UC are nowhere close to that amount. If you are saving up money to make settlement offers, make them one by one as soon as you can, dont wait until you have saved 10k up to make several at one go. And dont wait until you are offered a settlement, propose one yourself

I'm wondering what sort of edge case it would be for someone to have more than £16000 in savings AND have debts, either priority or not. 
Why would they owe family money too?  
You have just inherited £25,000 from your grandmother's estate...

I received a £16,000 back payment from the DWP, and I haven't been going on a spending spree or been depriving myself of capital. The DWP have disregarded that sum indefinitely. That has put me in a difficult situation now, as not everyone is bound by the DWP's disregard rules, which has the underlying principle that no means-tested claimant should be penalised (denied mean-tested social security benefits) for being owed arrears.

What are the housing entitlement rules for your area?

MrHeisenberg

ManyWays said:

Are you currently trying to apply for social housing? 
Do you have any debts?

Yes, I have successfully applied for social housing, but the Housing Association has a capital limit of £16000. I suspect they aren't alone in that. It all seems to derive from the mean-test used for social security benefits.

Yes, I have £8000 worth of debts, but if I pay them, even after being made a settlement offer I can't refuse, I could potentially be accused of depriving myself of capital, by both the Council and the Housing Association, as they are considered non-priority debts. It's a serious conundrum. What does one do? 

MrHeisenberg

kimwp said:

MrHeisenberg said:

ManyWays said:

Some comments on a couple of peoples points:

I want to pay off some of my non-priority debts, especially if I am given a good settlement offer by the debt collection agency, but don't want that to be held against me at some point in the future, especially as I am claiming Universal Credit
Unless you had more than 6k in savings, there is no question of any of this applying, as below 6k the DWP has no interest in your savings at all. Most people on UC are nowhere close to that amount. If you are saving up money to make settlement offers, make them one by one as soon as you can, dont wait until you have saved 10k up to make several at one go. And dont wait until you are offered a settlement, propose one yourself

I'm wondering what sort of edge case it would be for someone to have more than £16000 in savings AND have debts, either priority or not. 
Why would they owe family money too?  
You have just inherited £25,000 from your grandmother's estate...

I received a £16,000 back payment from the DWP, and I haven't been going on a spending spree or been depriving myself of capital. The DWP have disregarded that sum indefinitely. That has put me in a difficult situation now, as not everyone is bound by the DWP's disregard rules, which has the underlying principle that no means-tested claimant should be penalised (denied mean-tested social security benefits) for being owed arrears.

What are the housing entitlement rules for your area?

There is some mention of deprivation of capital in the Council's housing allocations policy, but that isn't very clear, which is what concerns me. It is also not clear as to how the Housing Association works out capital. They do say, though, that each case is considered on its own merits, which is perhaps a way of saying "we have a lot of discretion", but that could cut both ways.

Personally, at the very least, I think it would be wrong to include monthly benefit income in the capital calculation, and that is what took me over too. I have just gone under £16,000 now too, even when not disregarding my income, after paying my rent and annual car insurance etc., so I suppose it depends how pedantic they are.

According to this article, savings is how much money you have left after you pay your recurring expenses and living costs:

https://www.investopedia.com/terms/s/savings.asp#:~:text=Savings is how much money,very low rates of return.

kimwp

Can you share the relevant housing policy?

You might be able to argue that the settlement offer has an expiry date. Also, if you have a settlement offer, then presumably the debt has defaulted and you are not paying interest, so it's down to you what you pay (IE not a contract)?

What do you mean by your housing application has been successful? You have been given a house? 

MrHeisenberg

kimwp said:

Can you share the relevant housing policy?

You might be able to argue that the settlement offer has an expiry date. Also, if you have a settlement offer, then presumably the debt has defaulted and you are not paying interest, so it's down to you what you pay (IE not a contract)?

What do you mean by your housing application has been successful? You have been given a house? 

The allocations policy just states that person who deliberately deprives themselves of savings will be taken off the housing register. Obviously, I don't want that to happen.

Yes, I suppose it is possible to argue that, but it seems it all comes down to the discretion of the respective person that works for the Council, and many of them are not capable of fair and reasonable decision-making.

Yes, the debt has defaulted, and I am not paying interest, but it is a gentlemen's agreement, so they could potentially want to issue court proceedings with a view to recovering the debt.

No, not given a place just yet.

kimwp

Well, if you are over the £16,000 threshold, then you are at risk of coming off the housing list anyway, so personally I'd be considering the full and final offer.