Where can I find the rules on how back dated benefits payments are counted with regard to savings?

Junket

Hi,

I recently got a PIP back payment that pushed me just over £6,000 I'm allowed when claiming ESA before my benefits are affected, but I've heard back payments aren't counted as savings for 52 weeks. Is this still true? If so, could someone give me a link to where I can find official information on the government website or elsewhere? Partly for reassurance and partly so I know what to quote if the DWP come after me.
And am I correct in thinking that "deprivation of capital" wouldn't apply in this case if I spent more money than usual on what the DWP might consider non-essentials? I was hoping to give some money to a friend soon who needs a bit of help.

Also, should I be informing the DWP about all this or do I not need to since technically I haven't gone over what I can have in savings before my benefits are reduced?

I've tried talking to the DWP on the phone about whether back payments are counted as savings or income but the lady just kept quoting the £6,000 savings rule at me, so I was hesitant to expand on my situation in case she didn't know the rules properly and might incorrectly assume my benefits should be reduced.  

Thanks.

poppy123456

Hi,

Backdated money is indeed disregarded for 52 weeks when claiming all means tested benefits. Deprivation of capital rules will not apply in those 52 weeks and no you don't need to inform DWP about anything because they will already know you've received the backdated money because PIP is part of DWP.

See link and scroll down to backdated lump sum payments. https://community.scope.org.uk/discussion/65283/where-can-i-find-the-rules-on-how-back-dated-benefits-payments-are-counted-with-regard-to-savings#latest

Junket

Thanks for your reply! That link just links to this thread though.

Adrian_Scope

Hi @Junket. I don't know if this was the link @poppy123456 was trying to share but I've found this that may help: https://www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits

There's a section about two-thirds of the way down the page entitled 'Backdated lumps um payments from DWP'.

Junket

Thanks.

In some cases, this payment is not counted as savings for one year and will not affect your income related or means tested benefits during this time.

The word "some" here is confusing me a little though as I'm not sure if it's just supposed to point out that other back payments (the ones over £5,000 that are because of an error) are treated differently, or if there are other circumstances in which back payments do count towards savings.

poppy123456

Junket said:

Thanks.

In some cases, this payment is not counted as savings for one year and will not affect your income related or means tested benefits during this time.

The word "some" here is confusing me a little though as I'm not sure if it's just supposed to point out that other back payments (the ones over £5,000 that are because of an error) are treated differently, or if there are other circumstances in which back payments do count towards savings.

Ignore the word "some" because all backdated money is disregarded for 52 weeks for all means tested benefits as previously advised.

The part about the £5,000 limited is for benefit errors only and your backdated money doesn't include this.

One the 52 weeks have ended if you have savings in total of more than £6,000 then you will need to contact DWP and tell them. In the meantime they are not counted and you can spend that money on whatever you want to spend it on.