UC AP How to calculate??

Genesis1

So much confusion over this. It states online to calculate on the last day of your assesment period the total amount of money in all accounts, then deduct PIP, DLA, any wages and the UC payment itself. That leaves you with the capital because all the benefits, wages etc are income in tge current month it was payed in and they only become capital if not spent in total or in part by the next AP. Thats when they get treated as capital/savings.
However, I asked UC and they said No! You add it all up including the PIP wages any other benefits everything. But that contradicts what is said online, because its not savings until you have saved it.
Also pip is supposed to be disregarded. Non of it makes sense and even UC contradict themselves. How am I meant to calculate correctly with no clear official formula??

Muttleythefrog

There's dispute over whether you disregard monies not considered capital when reporting or whether you should let them determine what is disregarded from balances of accounts reported. I'm not sure you'll ever get clarity on that... just opposing opinions member to member, UC employee to UC employee, guidance to advice. It has been heavily debated in recent times on other threads on this board particularly in relation to cases where UC reviews have led to dispute with UC staff over the numbers and potential overpayments as many simply don't understand the rules on what is capital and what can be disregarded.

Does your capital or totals in accounts go over £6k for end assessment periods?

Genesis1

Yes, we already have deductions made for capital over £6000 when we applied. They calculated and payed our first UC payement showing how they worked it out. The first £6000 is disregarded and for every £250 or part over you are deducted £4.35. I have looked at the statement and nothing lists PIP being deducted. It seems you have to include the total amount including savings and benefits then they work out whether your UC is reduced. Still not clear though. Because benefits go in at different times in the month. 

Spoonie_Turtle

As it stands the system only allows for reporting overall totals in your bank accounts.  The only way to try to get them to separate out income and capital would be to send a journal message after reporting the totals to tell them the payments you had received during that AP.

If you decide that to the best of your understanding, deducting those types of payments is the correct thing, if your capital when doing so at the end of an AP is below 6k then you don't need to do anything (even if your totals are above)*.
However if your capital is above 6k that's where things get annoying for you because you will still have to report changes that take you above or below a £250 threshold compared to the previous AP (or the start of your claim, if this is a new claim).

*If currently your capital is showing as above but you know it's actually below 6k, one easy thing you can do is report a change during the AP when your total dips below, with the actual totals on that date so you are still honestly reporting according to what they're asking, and that will update the system without any faff needed.

The line of thought that says to separate out benefits and wages payments received as income is based on this piece of official guidance (first bit on bold):

"When income becomes capital
H1050 Income becomes capital if it has not been spent by the end of the assessment period after the one in which it was received.

Example: Pearl makes a claim for UC on 6 February. She declares savings in a bank account of £5,973.00. On 24 February, her earnings of £250.00 are paid into that account. Her assessment period is calculated as 6 Feb to 5 March and the earnings are taken into account as part of her income for that assessment period. When the next assessment period begins on 6 March, Pearl still has some of the unspent earnings so the bank account balance is now £6,105.00. **In the assessment period from 6 March to 5 April** she will therefore be treated as having an assumed yield from that capital of £4.35."
https://assets.publishing.service.gov.uk/media/693ace15c72b0f8ccf33d609/adm-ch-H1.pdf

The second bit in bold is the reason some people think you only separate out what you haven't spent from your income, so:
Add up all that you've spent
Minus that from income received = leftover income  (e.g. income 1600 - 1500 spent = 100 leftover.  That's not to be reported as savings in the present AP, only the next.)

Minus the overall accounts total at the beginning of the AP from the overall total at the end of the AP (e.g. 6750 at the end - 6300 at the start = 450 change)

Minus leftover income from the change in totals (450 - 100 = 350)

If the result is a +ve number that's what your capital has increased by and you add that to your savings totals.

            

That still doesn't change the fact the system only lets you report overall totals so you would still have to send a journal message telling them what is remaining income and not to be included in your capital. 

I suppose what you could do if you can't decide which method, is do the two different calculations for them in the journal message and see which one they use?  (That's if they act on the journal message, of course - not a given.)

Of course if your account totals (or capital even using the more conservative method) are under £6,000 then all of this is moot right now anyway.  But maybe it's useful to see the two lines of reasoning - and it's important to understand that the system does just ask for totals with no option for separating out income and capital.

[Also anecdotally members have had DWP use or accept the first method - for my own review I used it as at the time I was certain that it was correct, and DWP accepted my calculations and corrected their initial accusations of me having gone over the threshold - BUT anecdotes, and even DWP policy, aren't the law which is what would matter if it went to tribunal.  They're just extra contextual information about what is currently happening in reality.]

Spoonie_Turtle

(I was typing whilst you posted.)

Genesis1 said:

Yes, we already have deductions made for capital over £6000 when we applied. They calculated and payed our first UC payement showing how they worked it out. The first £6000 is disregarded and for every £250 or part over you are deducted £4.35. I have looked at the statement and nothing lists PIP being deducted. It seems you have to include the total amount including savings and benefits then they work out whether your UC is reduced. Still not clear though. Because benefits go in at different times in the month. 

PIP is not taken into account as income, i.e. it's ignored for making deductions in the AP on which it's paid, but unspent PIP does add to your capital totals.  

What counts is your total capital at the end of an assessment period.  (The general principle for UC is it's based on your circumstances on the last day of your AP.)

HillStreetBlues

The answer is that you declare capital, no matter what DWP staff say it's up to the claimant to correctly state their capital. It is then up to the DWP to calculate if that capital incurs any deduction from UC.
The onus is always on the claimant to have a correct claim. 
EDIT to made clear it only needs reporting if it affects any entitlement