Employment and Support Allowance (ESA)
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Do "savings" include your DWP payment for that period?

In theory we're allowed to have £5500 in savings before we have to start declaring it, right?  And £6K before our benefits start getting cut.  Does this include your next payment from the DWP?  If I am expecting my monthly £500 payment then does this mean I need to make sure my savings actually stay below £5K, because once my monthly payment enters my bank account it will take me up to the limit?

Replies

  • OverlyAnxiousOverlyAnxious Member Posts: 1,337 Disability Gamechanger
    Yes that's right.  All money in the account is classed as savings (capital) so the overall figure always has to remain below the threshold.   
  • calcotticalcotti Member Posts: 1,628 Pioneering
    The money you receive is income for the period it is received. Any money unspent at the end of the period becomes capital.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • LiamWarrenLiamWarren Member Posts: 10 Listener
    Convert unspent monies into cash.
  • LiamWarrenLiamWarren Member Posts: 10 Listener
    You can also buy Gold and Silver, its VAT free and not subject to Capital Gains Tax.
  • woodbinewoodbine Community Co-Production Group Posts: 4,061 Disability Gamechanger
    You can also buy Gold and Silver, its VAT free and not subject to Capital Gains Tax.
    But the value of gold and silver can go up and down, so not always the best investment.
    "Putting a child into care, isn't caring for a child" (T.Rhattigan)
  • LiamWarrenLiamWarren Member Posts: 10 Listener
    True. It's a risk.
  • AellaAella Member Posts: 4 Listener
    calcotti said:
    The money you receive is income for the period it is received. Any money unspent at the end of the period becomes capital.
    do you have a source for this?  Because other people said the opposite?
  • calcotticalcotti Member Posts: 1,628 Pioneering
    edited February 11
    This is the reference for UC
    ADM Chapter H1 (publishing.service.gov.uk)
    H1050 Income becomes capital if it has not been spent by the end of the assessment period after the one in which it was received. 
    Decision Makers Guide for legacy benefits has similar clauses. Here for example in respect of ESA
    DMG Chapter 52: Capital (publishing.service.gov.uk)
    When income becomes capital
    52050 Income other than earnings becomes capital after the end of the period it is payable for.
    In general money is either income or capital not both at the same time. In your situation if you have money in your accounts which is £5700 and then receive £500 for a 4 week period and spend that money within the 4 weeks your capital is £5700. If you only spend £450 then your capital at the end of the 4 weeks has increased to £5750.
    The DMG chapter referenced above includes an example:
    On 2 February Cath makes a claim for ESA. She has £7,550 in a bank account. This includes a month’s occupational pension of £250 which Cath received on 30 January. The DM decides that Cath has capital of £7,300 because her occupational pension payment of £250 has not become capital. On 16 February Cath withdraws £320 from her bank account to pay her car insurance. There is no evidence of any other withdrawals since 2 February. The DM decides that Cath has spent her occupational pension payment of £250 and that her capital has reduced by £70 to £7,230.


    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • AellaAella Member Posts: 4 Listener
    So if someone has, say £5400 in a savings account and then they get their monthly 500 ESA/PIP paid into their bank account, so in total they own £5900,they don't have to declare to the DWP that they're now over the £5500 savings limit at which savings need to be declared, because £500 of that isn't counted as savings?  Because other sources say "Savings for the DWP include any amount of money that can be accessed relatively easily or financial products can be sold. Examples of savings include: Cash and money in a bank account"
  • calcotticalcotti Member Posts: 1,628 Pioneering
    I don't consider so. In essence the money you need to meet your regular expenditure to sustain yourself is not capital.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
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