Capital and a loan.

ThirtySixteen
ThirtySixteen Online Community Member Posts: 62 Empowering
in Universal Credit (UC)

Hi guys, this is a strange one. Sorry

My wife is disabled and I am her carer. We are claiming UC.
My son on PIP has been given a backpay of around £11k and UC have told us it’s fine and we don’t need to declare it and that as it’s over a certain amount we don’t have to spend it within 12 months.

My son wants to lend us around £5k of it to pay of some debts and I want to pay him back.

Would UC be ok with this? Or would they see it as deprivation of capital?

Thank you.

Comments

  • james19o6
    james19o6 Online Community Member Posts: 172 Contributor
  • Albus_Scope
    Albus_Scope Posts: 11,423 Scope Online Community Coordinator

    Heya @ThirtySixteen That's good news about your sons back pay! As the amount is over £5000, it is disregarded indefinitely, so they can loan you £5000 and it wont matter to the DWP.

  • ThirtySixteen
    ThirtySixteen Online Community Member Posts: 62 Empowering
    https://forum.scope.org.uk/discussion/comment/1073241#Comment_1073241

    Thank you very much for your reply.
    What about me paying him back? Would UC be ok with that?
    Obviously I’d only pay him back until the amount reached £11k again.

    We just want to keep this safe for him until reaches 18 and then let him use it for a car or essentials.

  • OverlyAnxious
    OverlyAnxious Online Community Member Posts: 5,179 Championing

    Hi,

    Your son lending you the money wouldn't be seen as deprivation of capital because it's disregarded currently anyway.

    However, the money will no longer be disregarded for your son when you pay it back to him. It would be classed as capital at that point, with deductions made for anything over £6000.

    This is where it gets more complicated, trying to work out how much of the original £11k is left, and how much is declarable capital by that point.

    If you hold the money for him, purposely delaying the repayments to prevent him getting capital deductions on it, then that could be classed as deprivation of capital in order to claim more benefit than he is entitled to. That's a potentially grey area that they might not be able to prove, but it's certainly on the cusp of the regulations.

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