Universal credit and lump sum from private pension

Mittens77

I hope someone can help me 

I'm on universal credit and also get lcwra..total amount is £1249 per month.

£440 is Lha towards rent.  Rent is £700+ per month

I get pip totalling £303 per month

I also have a family member send me roughly £200 per month voluntary cash gift in dribs and drabs to help with bills, household expenses etc

All this money is spent each month...nothing left over.

I am over 55 and have a small private pension and have realised that I can now take up to 25% of that in a tax free lump sum. 

I need urgent dental treatment which is going to cost me roughly £2000 ( I do not have an NHS dentist). 

If I take £5500 as my £25% capital lump sum from the pension will this affect my universal credit amount each month? 

If I pay £2000 dental treatment and then have £3500  sat in my current account will this affect my monthly UC amount? 

If over the course of a year that £3500 left is spent ...well on anything from meals, social events treating myself to a weekend away...anything tbh. Will any of this affect my universal credit payments? 

Oh and will that lump sum affect the housing benefit over the course of a year ?

I've had cancer for over three years and it hasn't reduced in that time so who knows if I'll still be around in 10 years when I reach retirement age ! 

PS I am separated and live alone

Any help much appreciated 

Kimi87

Universal Credit is a benefit made up of different elements. These elements are all added up then any deductions are made. So Housing Element is included in your overall award and and not counted separately.

If you have over £6000 capital UC will make a small deduction of £4.35 for every £250 or part thereof, over £6k.

You would subtract income from that.

The calculation can be complex, but basic principle is any unspent income becomes capital after a month (as your income is monthly).

Each UC payment is based on your circumstances for the previous calender month (known as the Assessment Period).

It's your finances on the last day of that AP which are really important.

If you receive the money and that £2000 pays the dentist soon after, I don't think you have anything to worry about.

Mittens77

Thanks for the reply. Much appreciated.

I understand about universal credit being one payment. I was trying to give a breakdown of my finances.

The lump sum capital from the pension would be under £6000 .

So, £2k for dental treatment in the AP…the treatment may end up rolling over in to the next AP as I'm guessing there will be a few visits to the dentist

The other £3.5K would roll over in to the next assessment period. Would that then be classed as income if I started spending any of it ?

Would that then be classed as income and then completely mess up my universal credit amount

Many thanks

Kimi87

The lump sum would be treated as capital straight away.

I was trying to say if that puts you above £6000 in the bank immediately, you'd need to subtract your income to arrive at the correct capital figure for that Assessment Period.

As you said all your income gets spent in full then technically you shouldn't be above £6k capital.

Mittens77

Thank you so much for this.

I feel like I've been going round in circles on the Internet these past couple of days