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UC cpital "deprivation"

rbz

Because UC decision maker don't want to disregard some of my spendings I'll asked for written statement of reasons.

Yesterday received response, but decision maker failed to provide detailed information on why they can't disregard part of my spendings.

They wrote that decision is based on Legislation number (forgot number, but legislation is about Capital deprivation), but no detailed information.

Legislation has no explanation which spendings were "not allowable".

Any idea how to ask for detailed information? I can't prepare Mandatory reconsideration request, because don't know why they decided about capital deprivation.

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Comments

OverlyAnxious

Hi,

This is a difficult situation because there are no firm 'rules' on what you can and can't spend money on. The wording for proof that you have not deprived yourself of capital is this:

A claimant is not treated as depriving themselves of capital if they -

Use it to reduce or pay a debt owed by them; or
Purchase goods or services if the expenditure was reasonable in the circumstances of their case

So if they haven't given an explanation then you can still write the MR. Just explain that the goods or services were reasonable in your circumstances. You should be able to calculate which items were 'not allowed' as you will still be treated as having that amount of savings, and that will cause a fixed deduction on your UC amount. This is listed on every UC statement.

rbz

@OverlyAnxious

Wonder why decision maker can't explain decision. Full information will help to better prepare MR letter.

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/982888#Comment_982888

Yes I do agree with you. But getting accurate information out of UC rarely seems to be easy, so I would just bypass them altogether and write the MR.

You can also make it clear that they failed to provide suitable evidence as to why they believe it to be deprivation.

anisty

If this is the issue where you were using your UC to fund your adult daughter through her uni studies, we did explain it to you.

You cannot use your UC to support adult children. She needs to get a job, a student loan or both.

rbz

https://forum.scope.org.uk/discussion/comment/985023#Comment_985023

I don't use my UC payments for my daughter's education.

I'll use my SAVINGS.

When started to claim UC my savings was near £50k

And I pay for my daughter's education since September 2022, migrated from tax credits jus on July 2024.

Payments for my daughter's education is normal task for our family. There no single attempt to reduce our savings.

rbz

https://forum.scope.org.uk/discussion/comment/985023#Comment_985023

Today I will place a Formal complaint regarding this matter.

UC staff don't want to disclose grounds why they treat my spendings as "deprivation" , but not "allowable spendings".

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/985418#Comment_985418

I think you may have misunderstood how this works.

Deprivation of capital means reducing your savings. It is not about spending UC income.

michael57

would you have been entitled to uc with 50,000 in savings

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/985469#Comment_985469

Yes, as it's a special circumstance. There was a 12 month capital disregard for people migrating from Tax Credits.

Kimi87

If OP transferred from Tax Credits, there is a one year disregard if savings are over £16k.

rbz

https://forum.scope.org.uk/discussion/comment/985464#Comment_985464

You can't reduce your savings without spending money 😁

In my case I didn't know why they treated my spendings as "deprivation". Over 4 weeks awaiting for response.

For example I bought a new vehicle and they treated as "allowable spendings".

OverlyAnxious

Lol, yes, that's a fair point. But UC payments are counted as income for the period in which you receive them. The deprivation rules do not apply to that. But if you paid out a very large sum in one period, more than the UC payment, then of course some of that had to come from capital (savings) instead. That is when deprivation can be applied.

If it is true that you covered higher education costs, then they are not usually accepted as allowable spending if there was entitlement to a student loan instead. Obviously you are still welcome to challenge it, and I agree it's not fair that they haven't given you a proper reason for not allowing it. It shouldn't be left to strangers on the internet to explain it!

letitbe

https://forum.scope.org.uk/discussion/comment/985482#Comment_985482

so however you spend your income ( UC/ pip ) can’t be regarded of depravation ? It only applies to savings ?
I think there was a thread where you said if the day before your assessment period was over and you had withdraw the £50 that would’ve taken you over the savings limit , this could be seen as deprivation? But that £50 would’ve been from income .
im just confused about all this .

rbz

https://forum.scope.org.uk/discussion/comment/985469#Comment_985469

Most people think that UC claimants are "poor" people.

There exists a lot of government programs were you can earn money without affect to your UC claim.

For example we rent out spare room in our house under "Rent a room scheme". Income from this scheme under £7500 - not taxable and disregarded for UC purposes.

Also exists a lot different schemes where you can receive income (disregarded for tax and UC purposes).

Just need to follow government websites.

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/985488#Comment_985488

It is confusing, and I try to simplify it where possible to avoid causing even more confusion.

Basically though, as long as you spend income, from the bank account in which it was paid, within that payment period (or most of the next period), then it does not count as capital. It becomes capital on the last day of the following payment period for both UC and PIP. (Bearing in mind the dates will be different for both UC & PIP). That is what the Deprivation of Capital rules cover. They do not cover income, only capital.

However, proving whether you're spending income or capital gets difficult unless you use a different bank account for capital.

With the £50 analogy, if you take it out on the final day of your payment period, that is the point where it counts as capital. If you took it out the day before the final day then in theory you could claim it was still income. However, you cannot keep it as cash because cash should also be declared as part of your capital. And if there was at least £50 in that account before the start of the previous payment period, then DWP could claim that it was capital from before, rather than income from this period.

letitbe

https://forum.scope.org.uk/discussion/comment/985500#Comment_985500

this all all doing my head in .

So basically as long as I spend my income ( UC / LCWRA/pip ) before the last day of assessment period they can’t class it as depravation ? So I can basically spend my income on whatever I want and how I want it’s fine ?
ive been trying to do the right thing and not impulse spend all my income but if im gonna have to go into jobcentre every month after reporting and increase of savings I’ll be spending and giving my income away to charity .

OverlyAnxious

https://forum.scope.org.uk/discussion/comment/985501#Comment_985501

Yes, that is correct for Deprivation of Capital. That is what other long term members have advised on here in the past, spending all of the income within the payment period so there's no capital to worry about.

For the sake of total honesty, I am not 100% sure that there aren't some other rules for spending income. I am not aware of any at this point though.

I must admit, on a personal level, I don't agree with spending for the sake of spending, and I also feel it gives us a bad look, and puts us into the stereotype of benefits claimants wasting money on luxuries. But I also feel like we're pushed into it with the daft rules on capital deprivation. If I was designing the system, there are some changes I would make to it!

letitbe

https://forum.scope.org.uk/discussion/comment/985511#Comment_985511

I know and that why I haven’t been spending all my income but all this stress actually makes me wish I would’ve so I wouldn’t have to declare the above 6k in next few months . I’ve always tried to do the right thing although I can go through phases of impulse spending , it’s not everyday.
I also think the 6k should be higher ( maybe 10k) it’s been 6k for so many years .
I’ll just be donating all my extra income to loads of charities every month - they can’t say I’m living a life of Riley then .

rbz

https://forum.scope.org.uk/discussion/comment/985482#Comment_985482

Wonder why we must to take student loan and pay interest if we can have enough savings. DWP have no rights to push claimants to use loans, mortgages and etc.

anisty

It's really nothing to wonder about. Benefit money comes from those who work and pay taxes.

Benefits are a safety net for those unable to work and support themselves to maintain a basic standard of living.

Many people who work full time never have 50k in savings. They are scraping from month to month.

Although you maintain what you are doing is legally right, it seems to me to be morally dubious that someone can afford to support an adult child through education and maintain eligibility for benefits at the same time.

I am coming from a taxpayer point of view though; i am not a benefit claimant. My husband and I work.

It seems perfectly reasonable to me that you need to support yourselves when you have the means to do so, before turning to the taxpayer to support you.

Your 50k could have been used for your living expenses. Saving the taxpayer some money.

I'm no Rachel Reeves and do not begrudge my taxes going to help those in need but this is taking the mick.