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Pension lump sum Universal Credit

lucycmorley

Hello

I am an Australian living in the UK with my British husband. I have recently reached retirement age and can now access my Australian pension.
I do not work an my husband is in a low income so we currently receive the housing element of Universal Credit for our private rent.

We are considering purchasing a shared ownership property as we cannot afford the private rent in London any longer. We are in a position to make a cash purchase of 25% of the property if I make a lump sum withdrawal of my Australian pension.

My question is if I make the lump sum withdrawal from my Australian pension fund to buy a share in the property would DWP class the lump sum as capital meaning we would loose our entitlement to the housing element or would the capital be disregarded by DWP as we are using it to purchase a home to live in.

I have spent hours searching the internet but cannot find any answer and hoping someone can help

Thank you

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Comments

Albus_Alumni

Hey @lucycmorley and welcome to the community. 😊

I'm not 100% on the answer here, but I pretty sure the lump sum would count as capital/savings still and would need to be reported to the DWP. If it's over £16k then you'd lose your UC. If it's between £6k and £16k, your UC would be reduced until you went below that savings threshold again.

Hopefully a super smart community member will be able to give you a solid answer soon.

poppy123456

Albus is correct and it will be treated as capital, with no disregard. Are UC aware that you have an Australian pension? As you have reached state pension age that pension will affect your UC entitlement. Are you receiving any state pension? This will be treated as other income and affect your UC entitlement.

lucycmorley

Hi Poppy

Thanks for answering. No I have not reached state pension age, I am 60. The rules around Australian pensions are different. The funds are locked until a person reaches 60 and has retired from the workforce. I haven’t told UC about it as I have only just turned 60 and have not drawn down or taken anything from it as yet. The entire amount is being held by my Australian pension fund

poppy123456

Ah ok, I inferred that when you said you had reached retirement age that you were state pension age. Some people that have private pensions here can access them at age 55 but that doesn't mean they have reached retirement age.

My advice about the lump sum still applies and there will be no disregard for you to buy a property or share of a property to live in.