Hi, my name is collegegirl2025!
Can someone tell me if paying off some of your Morgage 20,000 is classed as notable for uc? They saying I shouldn’t have paid it as it wasn’t needed? But it was as my interest went up and I needed to lower it and doing this brought my interest down.
how long does this stay on if it’s notable? Can’t I claim? I have 3 kids to support
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Hi,
Making mortgage payments is allowed on UC. But over-paying beyond your monthly amounts can be considered Deprivation of Capital, exactly as they have said.
If this is for a new claim and you got rid of £20k just before applying for UC then I'm afraid the UC staff are correct, you won't be able to claim while still considered to have over £20k in capital. You can appeal the decision but it sounds like it will be difficult to prove this wasn't done for the purpose of claiming UC.
There is no specific timescale but the notional capital above £16k is calculated to reduce by the amount of UC that you would have been paid each month without it. So this will be different for everyone based on individual circumstances. UC should be able to tell you how many months you'll need to wait before claiming.
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Here is the legislation on Notional Capital which might help to explain.
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so it’s not in my possession as it’s paid park or my Morgage off? So how does this work as it not something I have now?
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You are classed as still having it I'm afraid. It's called Notional Capital now that you don't physically have it. That Notional Capital does decrease each month as shown in the link above.
Unfortunately it is too late to go back and not pay it, so now just have to follow the process, which is most likely waiting a few months until you can claim UC. Or you can choose to appeal their decision. If you choose to appeal then you will need to prove that the money wasn't spent for the purpose of claiming Universal Credit.
You don't have to answer this but do you have any other savings or income at the moment to cover the next few months?
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Would mortgage not be classed as debt? And repaying debt is always allowed on UC, their regs state:
(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a)reducing or paying a debt owed by the person; or
(b)purchasing goods or services if the expenditure was reasonable in the circumstances of the person's case.
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Overpaying a mortgage by 20 grand, then asking for state support? That doesn't ring true with me.
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it wasn’t just ‘paid off’ to claim. It was to pay my Morgage to bring the payments down over £250 a month extra that I couldn’t afford or fix to a new rate!
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With deprivation of capital the burden of proof is on them to show that you intentionally and knowingly deprived yourself of capital in order to increase a claim or be eligible to claim, which doesn't sound like is the case here
Plus, paying debt is ALWAYS okay on UC. I'm not 100% sure if mortgage is regarded in same way, but it's still a debt so would assume so. It's quite clear on their guidance debts are ignored (look at point 50 in the legislation here:
I really think you can challenge them on this if they are saying not eligible for UC ❤️
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I really feel for you. What you did makes complete sense. You were trying to protect your home and keep things manageable for your family, not trying to game the system. Sadly, the DWP does not always recognise the logic behind real life decisions.
You have every reason to challenge this. The rule you would be appealing under is Regulation 50(2) of the Universal Credit Regulations 2013. It states that you should not be treated as having deprived yourself of capital if the money was used to repay a debt or spent reasonably in your circumstances. A mortgage is a debt. Using savings to reduce unaffordable monthly payments, especially to avoid arrears or the risk of losing your home, sounds entirely reasonable.
If this rule was not applied properly in your case, you can ask for a Mandatory Reconsideration. In your request, explain that the payment was made to reduce debt, not to qualify for Universal Credit. Include any evidence you have. Mortgage statements, interest rate changes and your new payment amount can all help strengthen your case.
If they still do not change their decision, you can take it to an independent tribunal. Tribunals often take a more balanced view and look closely at whether your spending was necessary and fair. Based on what you have shared, you have a strong case and Regulation 50(2) is on your side.
Wishing you and your family all the best.
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I don't think the regulations are clear on this. Mortgage payments are classed as a debt at the standard rate, where you would get into more debt by not paying each month.
However, overpaying a mortgage, especially by such a large amount, doesn't really fit that. If it is legally allowed then it's more like a loophole than an intention. Otherwise anyone with a mortgage could just dump their savings into that and start claiming UC. I am sure that wasn't the intention of this legislation, irrespective of personal opinions.
It's also worth noting that appealing the decision is likely to take a few months, so it may not be worth the hassle if you would only have to wait a few months to claim in the first place. There are a few variables here, so it's difficult to advise specifically. But you do now have two pathways to choose from for an appeal, the clear one about not doing it purposefully in order to claim UC, and the less clear one about any and all mortgage payments being classed as a debt.
(Also for the sake of clarity, if you do appeal and win then you should get some backdated money. Whereas if you just wait until the Notional Capital drops there won't be any backdated money).
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thank you. I am still in receipt of payment until they said this about the payment - so if it’s £20000 and I shouldn’t have had it for a few months to drop the money to 16000 then do they normally do a reduction in benefit until it’s paid? Or stop it all together? Because for the last few months I’ve been paid which would have started the 20000 notable drop? Thank you
I’m so stressed.
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Can you tell us how long you've been claiming UC? Roughly how much you get each month? And where the £20k came from?
It shouldn't have been possible to start claiming UC if you had £20k in savings to start with so I'm a bit confused here. I thought they'd stopped you from starting the claim now.It's a simple calculation in theory. If you get £1500 a month (to make the maths easy), then it would take 3 months to drop below £16k.
But once you are below £16k then the deduction changes to the savings deduction which normally be made for people with £6k-£16k. So the timings and amounts you receive all make a difference to this.
As you're already on UC then you might as well appeal the decision.
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