SDP disregard
Hi, can anyone tell me how long is backdated SDP is disregarded. A payment of over £22000, letter says due to change of circumstances backdated for 6 years. Went into account in lump sums of 4 x £5000 and a separate £2500. Was told over the phone it’s disregarded for rest of ESA claim. Will it be disregarded for Universal Credit on migration and if so how long. I keep seeing regs saying any payment over £5000 but can’t make head nor tail of it as the letter does not mention anything error on DWP part. Many thanks.
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Hi,
It will continue to be disregarded for the lifetime of the UC claim.
Make sure you've got some paperwork confirming it as UC will ask about it. When you declare the savings on UC, you will need to put the full amount first, then put the £22000 (exact amount) in the disregard page under backdated benefits.
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many thanks and apologies for my questions. So if he spent say £5000 by the time he was to migrate over, what figures do you put where. Many thanks.
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No problem. You should always still put the total savings figure on the first page.
Then put the exact amount of back-payment on the disregard page. Obviously that might create a minus figure if he's gone below £22,000 total, but I'm hoping the automated UC system can cope with that and class it as £0. (It's still fairly new, used to be done manually by a staff member.)
Ultimately, there should never be a savings deduction made in this case, unless the total figure goes over £28,000. (£22k backpay disregard plus £6k normal lower savings limit).
There's no need to slowly deduct any money that you feel has been used from the backpay, as legally it doesn't work in that way. The full £22k is disregarded for the life of the claim.
(Hopefully Kimi Or Chiarieds can confirm this as well)
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Thanks so much, can he spend it on whatever he would like. His home needs some new furniture and he would like to have some decorating done. He asked this morning could he have some to buy a new cover for his Ipad and a new harness for his dog.
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Yes, he can spend it on anything he likes. 🙂
It would still be worth keeping receipts for larger purchases as UC are likely to ask for a savings review at some point. Although legally he can spend the backpay on anything, the UC staff could still be 'awkward' about large spends during the review. I don't want to put you or him off spending it. This money should be used to improve his quality of life, in whatever way he choses. But we have also seen the way these reviews are conducted by some of the UC staff.
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Fab, as his appointee I assume it would be me who would need to explain, all recipts will definately be kept. Thanks again.
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Sorry to be a pain but if the award letter for the back payment does not mention error, or error at point of law will it still be disregarded for his migration onto UC. His letter says change of circumstances backdated for 6 years. It was the gent on the phone who said disregarded for the life of ESA claim. It’s so confusing but I just want my ducks in a row for when his migration notice comes through. I may have to contact ESA again to ask for written confirmation. Many thanks.
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You're not a pain at all, it's better to keep asking until you're sure.
As long as the letter shows the full amount as being over £5k from the DWP then that should be enough evidence. But if you can get one that specifically says it was caused by their error then that would make it absolutely certain for the future.
I'm also going to tag @Kimi87 and @chiarieds in this thread as I was thinking about it a lot last night. I may have been wrong where I said you don't have to work out how much of the back-payment has been spent when declaring that on the disregard page for UC. That was based on the COL payment disregard (which is also for the lifetime of the claim) but I now think it probably is different in a case like this. I think you could only disregard up to £22k, but do not specifically have to work out whether it's from backpay or 'old' savings.
Just as an example, if he had £3k before, and got £22k backpay, that makes £25k. If he spent £2k the total would be £23k, but he could still disregard £22k of that as backpay, regardless of the account it came from.
But once the overall total drops below £22k, then I believe he could only disregard the maximum amount. So for example, £20k in total, £20k disregarded.
The reason this matters so much is if he gets an inheritance or a lottery win or similar in future. If his total savings had dropped to say £10k. Then he got an £8k inheritance. The total would be £18k. But only £10k disregarded at that point, so a deduction would be made for the £2k declarable capital over £6k. Under my previous advice, he could still have claimed the full £18k as disregarded, even though £8k came after the backpay. I now believe that was incorrect. Sorry that looks very complicated written down but it is quite straightforward in reality. Hopefully Kimi or Chiarieds can confirm this as I'm doubting myself now.
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Hi @NeuroEve - when you get paid back over £5, then it gets paid in the fashion your son received it in a few payments, but the total amount received will be disregarded when he migrates to UC & for the lifetime of the UC claim as @OverlyAnxious has said.
It doesn't need to be an error /error in law (as SDP isn't automatically added) so don't worry about that
This is all covered under The Universal Credit (Transitional Provisions) Regulations 2014 , i.e. regulation 10A
The DWP's ADM (Advice for Decision Makers) ChapterH2: Capital disregards - H2092 references these regulations in the section ''Arrears and concessionary payments of £5,000 or more'':
Hope that reassures
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Thank you so much. Really appreciated.
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You're very welcome @NeuroEve & thank you for the tag @OverlyAnxious 😊
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