Technical question - UC AP

NedS

@Altior wrote:

I've read that declaring capital of anything between £6K and £16K instantly triggers a review. Under £6K and there's no review for 6 months minimum. In one respect that has some logic, as UC payments vary between £6K and £16K, based on the specific level of capital. But anyone cheating who knows this could simply declare under £6K it seems to me!

That is not correct, or at least not the correct terminology.

When you declare capital over £6k (either as part of a new UC claim or when declaring a change on an existing claim), it needs to be manually verified by a UC agent working in the jobcentre. So they will ask you to bring in evidence (statements) showing the amount of capital you have declared. This is not a UC Review and will not trigger a UC Review - it is simply asking for evidence to verify the amount of capital you have declared. If you declare capital under £6k, it does not need to be verified as it does not affect the claim. It may be investigated for DoC if declaring capital under £6k when an amount significantly over £6k had previously been declared (and verified), but this is not a UC Review (see below).

A review, conducted by the specialised UCR Team (there agents are not based in jobcentres and only conduct telephone appointments), is something that happens from time to time where the specialist UCR Team will review your claim to ensure you are receiving the correct amount of benefits. There is no publicly available information to suggest what, if anything, may trigger a review.

There are fraud checks, both at the point of initially making a UC claim and ongoing throughout the life of a UC claim.

Altior

https://forums.moneysavingexpert.com/discussion/comment/81936399#Comment_81936399

Thanks. Quite the saga isn't it!

Theoretically I could declare over £6K on the original submission, and I would have no problem backing it up if it didn't mean that 4 month review thing.

However it goes back to that quirk with my council, of the £6K cut off/cliff edge. I'm assuming if I went with £7K (for instance) on the original application, I wouldn't qualify under the council's terms at that point, and would then need to subsequently do a manual application once I was able to access the matured funds to settle debt.

The only way around it is to declare what I know my capital would be at the end of the first AP.

I keep coming back to submitting in August, which has to be said would be much more straight forward.

NedS

In terms of payment, the figure that is relevant is the capital on the last day of an AP (the first AP in this case).

However, when you make your claim, you must declare the capital that you have at that time, as you cannot possibly know how much capital you will have at some point in the future.

If the declared amount of capital is over £6k, you will be asked to provide evidence as part of the new claim application process. You cannot provide evidence to verify an amount of capital you may or may not have in the future, so they can only verify what you have right now (at the point of claim).

If your capital changes within the first month, then you can declare a change in capital online at any time, so before the end of the first AP, which may or may not need to be verified.

As a general rule, nothing on UC can happen in the future (the system will not allow you to put in a date in the future). You cannot report any changes until they actually happen, so must wait for the date of change before reporting the change. The system will always ask "What date did this change occur" and will only allow you to enter 'today' or a date in the past.

Altior

https://forums.moneysavingexpert.com/discussion/comment/81936457#Comment_81936457

I can definitely know how much capital I will have at a date in the future. As I have multiple credit card liabilities, I can easily pay exactly what I'd need to, to match a capital amount to the penny, close to the AP end date.

Obviously I am aware that systems are not designed to operate in this fashion, and my circumstances are pretty unusual I suspect. It's more than awkward to have to count inaccessible capital that is locked away in bonds as 'savings', even more awkward that they add up to £6008! But it has to be that way.

I am also far more comfortable without workarounds. There's no real tangible financial benefit to applying earlier, just a psychological one, to get it out of the way. After July, my affairs will be reasonably boring again, aside from only £3008 in locked bonds (for another two years). So I think I need to put UC out of my mind now, until July ticks around.

Yamor

One point I would add is that if you have capital "locked away", then the current value of that capital will almost certainly be lower than the amount in the account.

I'm not qualified to tell you how much lower, but it would relate to how long it will still be inaccessible for.

Altior

https://forums.moneysavingexpert.com/discussion/comment/81936587#Comment_81936587

Thanks Yamor, do you have any source of information I can read about this in detail?

Apparently I can also disregard the most recent ESA payment. So if I had absolutely nothing else on application date it would be £6008+£272-£291.80, getting me under that critical £6K (by £11.80!). And if the true value of that £6008 is considered lower, it would be a bit less.

All of my cash bonds date back to 2023 when we had that brief window of opportunity of high interest rates. I did a mix 1-5 years, so a number of them have already matured.

Yamor

Nothing really useful, but take a look at the ADM at H1675-H1676 which mentions that the value of money in the bank is assumed to be the balance in the account "because it is assumed the bank […] will be able to pay out the money when asked."

The intention there is probably for situations where the bank might be in financial difficulty, but the same thing would apply when you don't have a right to withdraw the money yet.

Similarly, the examples in H1676 don't include your case, but the same principle would apply.

Ultimately, a bank account is a debt owed to you by the bank, and the value of a debt will always decrease if it is not immediately repayable.

https://assets.publishing.service.gov.uk/media/693ace15c72b0f8ccf33d609/adm-ch-H1.pdf

HillStreetBlues

https://forums.moneysavingexpert.com/discussion/comment/81936587#Comment_81936587

I have wondered about that, but never found anything about money locked away.

Just musing but could it be said that there is no capital and the bank doesn't owe you the money until it matures (assuming there is no possible access to it until it matures). But if a person did do that on purpose it would then be DoC?

Yamor

https://forums.moneysavingexpert.com/discussion/comment/81936779#Comment_81936779

I think it is legally straightforward that the relationship between a bank and an account holder is one of debtor/creditor, and that any limitation on when you can withdraw the money is simply akin to a loan with a term.

The value of money in the bank is always the value of the "chose in action" due to being able to sue for the money. Clearly, if the money can be withdrawn immediately, and the bank can afford to pay (!), then the value of the chose in action will be virtually equal to the amount of the "loan".

A loan which only has to be repaid on some future date certainly has a value, but the value will clearly be lower than the face value of the debt.

Altior

Naturally it has crossed my mind whether fully locked cash bonds count as capital for the purposes of UC at all. They are effectively useless to me at the current time, even if I was destitute, until the maturity date. I searched for ages, but can find no examples online of people affected asking the question, let alone publicly accessible formal literature!

The issue is an obvious one, it would be a simple route for DoC. But obviously not if they were initiated three years ago!

I use the HL active savings account platform, and on there I don't have any account numbers or transactions for the individual cash bonds. So I wasn't even sure what to use for account numbers in the UC application. You do get a 'statement of interest credited' for the tax year, but it's not itemised for the different institutions or accounts. Just the total gross interest received.