Migration to UC questions ie savings etc?

Hello all

Hoping for some advice.
We live in Central Scotland and as we all know there is managed migration to UC coming up at some point. We would like some advice please as quite stressed about it as it may leave us alot worse off. Our circumstances are at the moment.

* Myself disabled recieve Contribution Based Support group ESA and Middle and lower DLA.

* wife works part time.

* two children who receive Child Disability Payments (Scottish version of DLA) higher rate for mobility and Care for one and lower and middle rather for the other child.

*Child tax credits

* Scottish child payment. Scottish child payment is £25 a week per child

* Child benefit paid by DWP

We have savings under 16k but are trying to save for a deposit to use to buy a house. We are hoping to get to 20k in the next couple of years but if we go over 16k and we are migrated to UC ( I know first 12 months savings are disregarded) would this mean we would lose our credit tax credits after a year of being on UC ? Or is due to maybe our daughter being in High rate DLA mean savings over 16K are disregarded or any other exceptions? Would we also lose any of the other benefits we get or just the child Tax credits? If so that's so annoying that Child tax credits on UC is means tested but not the old Child Tax Credit's? This means if we have over 16K in savings our income would reduce significantly if we lose our Child Tax credits? But what about the other benefits too?

Hoping someone can help?

Thanks all?

Hello, Neptune1980.

I fear we don't have good news for you regarding your entirely reasonable desire to save for a house deposit.

The DWP recently published the timetable to complete managed migration. Between July and September 2024 they aim to migrate claimants in receipt of ESA and Child Tax Credits so you probably fall into that category. You will get 12 weeks to migrate, though apparently it can be extended in some circumstances, so taking 12 weeks to apply for UC will give you a bit more time.

I will try to help benefit by benefit but will add the caveat I am no expert in the minutiae of benefit legislation and you have a wonderful mix of benefit queries.

If any of the savings you currently have include the Cost of Living payments they are indefinitely disregarded from your total capital.

Child Benefit is not included when calculating income for UC. I'm afraid I don't know if the Scottish Child Payment is treated like ordinary Child Benefit.

The Child Disability Payments and your DLA, or Adult Disability Payment as you will eventually be moved to in Scotland, are not income for UC purposes. However, any unspent DLA/ADP will count towards your total capital on the last day of your UC assessment period and therefore could reduce your UC award. The CDP your children receive is not income you and your wife receive so any unspent CDP shouldn't count towards your capital as long you could provide a paper trail for the DWP to satisfy them you and your wife have no beneficial interest in your children's capital.

The rules on transitional protection are typically complex. If you have in excess of £16,000 when you migrate you will get 12 months protection but if savings drop below £16,000 during the 12 months the transitonal protection ends. From what you have said that probably isn't applicable to you now. If your total capital is between £6,000 - £16,000 you will lose £4.35 per £250 or part thereof, starting at £6,000. For example, if you have £7,000 your UC would be reduced by about £17 each month. I don't know if transitional protection applies to savings between £6,000 - £16,000. Once you are on UC and your savings exceed £16,000 your UC will be impacted. I am clueless about contribution based ESA so I don't know if that makes a difference to the UC you will receive.

If you aren't already aware of them, entitledto and turn2us have UC calculators which let you enter details of all your income and they calculate what your UC award should be. They are well regarded but obviously don't take them as gospel. I would strongly recommend you have a look on those.

I will also post you some links to sites that will be highly likely to have the answers you need.

As I said in my earlier reply, some links which should be helpful.

RightsNet is a site for welfare rights advisors. Sadly, unless you work in the business you can't join or post, but you can read their forums and I suspect your questions have b

As I said in my earlier reply, some links which should be helpful.

RightsNet is a site for welfare rights advisors. Sadly, unless you work in the business you can't join or post, but you can read their forums and you should find a lot of helpful info there

https://www.rightsnet.org.uk/forums

Benefits and Work is well regarded for ESA and DLA/PIP knowledge. Members of the public can post on there.

https://www.benefitsandwork.co.uk/

Reddit can be a veritable cesspit but it's benefit boards are clearly frequented by people who work in both DWP and welfare rights advice so should know their stuff in relation to a more complex set of circumstances like yours.

https://www.reddit.com/r/DWPhelp/?rdt=59675

https://www.reddit.com/r/BenefitsAdviceUK/

Good luck with finding some informed answers. You don't need the stress of not knowing what your income is going to be at any time, let alone so close to Christmas.

Ignatius wrote:As I said in my earlier reply, some links which should be helpful.

RightsNet is a site for welfare rights advisors. Sadly, unless you work in the business you can't join or post, but you can read their forums and you should find a lot of helpful info there

https://www.rightsnet.org.uk/forums

Benefits and Work is well regarded for ESA and DLA/PIP knowledge. Members of the public can post on there.

https://www.benefitsandwork.co.uk/

Reddit can be a veritable cesspit but it's benefit boards are clearly frequented by people who work in both DWP and welfare rights advice so should know their stuff in relation to a more complex set of circumstances like yours.

https://www.reddit.com/r/DWPhelp/?rdt=59675

https://www.reddit.com/r/BenefitsAdviceUK/

Good luck with finding some informed answers. You don't need the stress of not knowing what your income is going to be at any time, let alone so close to Christmas.

Reddit started banning users, mentioning the restart programme, and deleting tonnes of messages, running in fear of people bringing down the whole scheme. Also, the administrators even said signing provider forms is part of your work commitments.
Who knows what is going on behind closed doors? There could be legal threats from the providers; they also said restart, don't monitor your communication, fuck they do, and my advisors still have my first text messages and email I sent to them that was 10 months ago. They required this because they are dealing with vulnerable people, so everything is monitored. That is why advisors tend to abuse people by face-to-face and phone calls; they get away with this.

Anyone notice advisors tend to keep their text/email messages very short worded incase saying the wrong thing.

Reddit also said, if you don't sign paperwork your life would get harder..
What a joke.

The Catwoman wrote:Reddit also said, if you don't sign paperwork your life would get harder..
What a joke.

All nonsense hungry for money.

My advisor tried to scare me by saying next scheme you are not allowed to pull out contract forms bullshit completely infringement data rights laws and GDPR one complaint to the ICO, it's game over for the provider. This what reddit don't people reading. Does harm to the scheme.

The whole communication advisor slipped mention to them cannot attend a appointment she would say send me a text or email your ill or working so I can update the system and give evidence to the DWP you cannot attend.
We are being monitored 24/7

Thanks for the very helpful replies.
Gosh that will be so hard to navigate in terms of for instance UC disregarding savings from DLA and child disability payments and similar as they go into the same bank account as my wife's wages. How do they separate them? Maybe we should have start a separate bank account which those benefits which are disregarded in savings go into?

Are there any legal challenges at the moment going kn with regards to having 16k in savings as hiw can it have been OK under tax credits but not with UC?

You are correct, Neptune1980. Your circumstances are on the complicated side due to you receiving lots of different benefits.

In my first reply to you I omitted 2 things that may be relevant. Your wife's earnings and who pays your current housing costs. Under UC your wife may get a Work Allowance which may help with keeping your income up.

The savings issue or total capital thresholds are shitty. They haven't been updated for a long time, and they certainly don't account for rising housing costs. I accept there has to be a cut off but allowing people to save for a house deposit can save public money in the longer term by reducing the housing benefit bill. As to whether there have been successful challenges to the capital limit. That people migrated to UC are losing UC once their transitional protection has ended due to excess capital suggests any legal challenges have failed. Rights Net would be worth looking on to find out more on that subject. As I said earlier, you won't be able to post as a member of the public, but it is the industry forum for welfare rights advisors. Their job is to help the claimant receive benefits they are entitled to and they do have contemporary knowledge of what challenges may be going through the legal system.

Putting your childrens money in a separate account is probably wise. The DWP normally ask for bank statements so they can disentangle peoples finances. To reiterate, as long as you do not have what the DWP term a beneficial interest in your children's savings, their capital will be disregarded for a UC claim. Unfortunately, any of your DLA you save will be counted to your capital limits on the last day of your UC assessment period. You will still be able to increase your savings, but your UC award will be reduced by £4.35 for every whole/part £250 in excess of £6,000. As you know, the whole claim will end at £16,000.

I would certainly agree that plenty of the posters on Reddit and the benefits section of Money Saving Expert are unreliable to put it mildly on lots of DWP subjects. With regards to what counts as capital and how it affects entitlement to UC they are better informed.

Play around with the UC calculators on entitled2 or turn2us to see what UC you will get as your savings increase.

Another possible source of advice may be your local authority. Many have welfare/benefits advisors who ought to know how migration to UC will impact you.

Hopefully you won't get your migration notice til September 2024 and if you wait 12 weeks to migrate you will at least have another 12 months to save as much as possible.

At the bottom of the page, this link includes a link to the DWP rules for Decision Makers on what is capital and what is disregarded as capital for UC purposes. It will be a worthwhile read.

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/capital-rules/

Another guide to what is and isn't capital, with a link to the relevant legislation.

https://www.uceplus.co.uk/disregarded-capital#:~:text=The%20following%20is%20some%20common,certain%20other%20compensation%20payments

A link to the horses mouth. Part 6 of the Universal Credit legislation provides what will be counted as income for calculating your UC award and what is and isn't classed as capital. It is probably worth you reading the chapters on the Benefit Cap as well, the number of hours your wife works will be applicable here.

https://www.legislation.gov.uk/uksi/2013/376/contents

I think UC may not result in too much of a hit to your family's monthly income but it certainly will limit your ability to save in excess of £16,000 and receive UC at the same time. If your longer term objective is a mortgage, your wife is best staying in work because mortgage providers will not necessarily regard all benefits as income for mortgage affordability purposes.

As said earlier, I do feel for you. The capital limits are overdue an increase. If you had just sold your main residence, that capital would be disregarded for 6 months if it was being used to purchase another home. Because you are a non-homeowner merely trying to save for a home, you will likely find the UC rules make it harder for you. Apparently UC was supposed to make people less dependent on benefits - ha ha.

Thanks so much for this. Really helpful.
I am still non the wiser as to if my children's Child Disability payments and other benefits savings ie if we can have certain benefits like this to go into one account and any money in that account can be disregarded towards the 16k? This is what I would really like to know. Really.

Also you mentioned you don't think my own DLA (which will be changed to adult Disability payments at some point as live in Scotland) will be disregarded as in saving but my children Chikd Disability Payments will be, but why there's and not mine? As its the same thing?

Totally agree we are renting at the moment and rather than get help with rent we will save for a deposit to buy our own home. But need a decent deposit saved and won't be able to save any more or buy a house once we switch to UC unless certain benefits are disregarded which means our savings will stay below 16k as half our savings and income come from things like child disability benefit etc.

I was going to do a benefits calculator but you can't do one if you have 16k in savings anyhow.

Just did the entitled to UC calculator and put down 16k in savings and it still gave us around £400 per week UC entitlement-to-uc but that can't be right?
Maybe it's just showing it as it would be for the first year before it will be stopped?
Very odd as it says at the start if you have over 16k you are not entitled to UC so strange.

You can't get benefits if you have 16k in bank

Strange I did the turn to us calculation and I put down 15k in savings and it still said
"Based on the information you have given us, you aren’t eligible to get Universal Credit because your savings or capital is too high."

But why? It it because maybe my wifes earnings are too high? She only earns 28k a year before tax and NI and my CB ESA is about 7k per year. Is that too much for UC

Also is it only the Tax credits we will loose when we have to migrate into UC?

Will we still keep my CB ESA support group, my DLA ( soon to be Scotlands Adukt disability payment). Our chilrens Child Disability Payments, Scottish child payment, child benefit?

Thanks

Neptune1980, this is what ADM H1 Capital has to say on capital owned by children (if you didn't know, this is what DWPs Decision Makers refer to when deciding what is and isn't capital for calculating benefit awards).

"H1077 Ownership of capital of a child or young person"

"Capital owned either legally or beneficially by a dependent child or qualifying young person is not to be included in the capital of the claimant. However, the Decision Maker may still need to make enquiries about such capital if it appears to be owned by the claimant but is actually beneficially owned by a child or young person for whom they are responsible."

The key with children's money is who benefits from it or to use the DWP term, who has beneficial ownership. Their CDP will not be counted towards your income because it is their CDP to be spent on their additional needs, not yours. Any of their unspent CDP can be saved for your children and will not count in your total capital providing you and your wife derive no financial benefit from the childrens unspent money. The rules are designed to stop adults stashing their cash in their children's bank accounts so as to maximise the benefits the adults can claim or passing capital off as belonging to children to sneak past the adult capital limits. The rules also ensure that money children legitimately own, either from say DLA , Christmas presents from Granny, their paper round or an inheritance etc , doesn't effect their parents eligibility for benefits.

I imagine moving from Tax Credits must be a massive headache. Previously all that really mattered was your wife's earnings. UC is an entirely different world.

What will happen to your other benefits after managed migration:

Scottish Child Payment.
Unless you receive one of the qualifying benefits listed here, you will lose it

https://www.citizensadvice.org.uk/scotland/benefits/help-if-on-a-low-income/scottish-child-payment-s/#:~:text=The%20Scottish%20Child%20Payment%20won%27t%20affect%20your%20other%20benefits.

Child Benefit.
Will continue to be paid, regardless of whether you receive UC. It will only stop if your wife reaches the High Earner Threshold, currently set at £50,000.

DLA/CDP.
These are not financially means tested and nor do you need to receive UC to qualify. These benefits will continue as long as you satisfy the assessment criteria next time you are assessed.

Contribution Based ESA
I need to read some more!

Looking at the Scottish Child Payments which is £25 per child.
We will also loose this is we have 16k in savings and on universal credit.
So another financial hit, we will loose our chikd tax credits at £188 per week AND the Scottish Child Payments!!!!

I'm beginning to think Transitional Protection is little more than hot air. It does look like you are correct in thinking your wife's earnings and your joint savings are making you ineligible for UC. If you had over £16,000 when you are migrated that capital should be disregarded but is the problem that capital between £6,000 - £16,000 it is still subject to what is termed an "assumed yield" of £4.35 per £250 or part thereof, and thus reducing your UC?? Or, Transitionsal Protection only applies if you claim UC under Managed Migration. If you move of your own volition or due to a change of circumstances, there is no such protection. Are those UC calculators not recognising the difference??

I think in the New Year it would be a good idea to see what face to face benefits advice you can access locally. Councils, Housing Associations, community organisations, a local or national charity that represents the health conditions you and your children have, often all employ benefits advisors. Their performance indicators usually involve making sure their clients receive every benefit to which they are entitled so they are worth contacting. In Englandshire, Citizens Advice has a Help to Claim service for people claiming UC. I would like to think Scotland has similar. They should be able to go through all your current sources of income and see if you qualify for even £1.00 of UC. They can also advise on if any of your capital would fall into disregarded capital. As a general guide, if it is leftover income it won't be disregarded. If any of it is, say, backdated benefit payments or Cost of Living Payments, it may qualify to be disregarded and help you get UC.

Even if you are only eligible for a teeny tiny bit of UC it can still be worth the hassle of a claim because, as you have seen with Scottish Child Payments, receipt of one benefit often unlocks the door to others.

I know Scotland is civilised so your prescriptions are free, but what about the other passported benefits such as free school meals, dentists, eye tests etc? Are those linked to UC eligibility in Scotland?

A lot of people have no sympathy with tax credits people losing out after being moved to UC, claiming it's outrageous they've been getting money regardless of how much they have in the bank. I'm certainly not one of them. I think people should be encouraged to have savings. As it is, the capital limits are effectively being eroded away and with it the incentive to save. No wonder people think I'll buy a massive TV, takeaways or whatever else they are accused of wasting benefits/wages on. Unless you have upwards of tens of thousands in savings you can never really move on in life. £6,000 - £16,000 may sound a lot to some people but it may not last very long if you aren't eligible for benefits. Of course, when your capital falls below thresholds a person is eligible for benefits.

Neptune1980, earlier you asked why your can DLA count towards your capital. The explanation lies in how the DWP distinguishes between income and capital, and who is the owner and the beneficial owner of the capital.

ADM Ch H1 Capital

"When Income Becomes Capital"

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."

H1073

"People who are the beneficial owners of capital are usually the legal owners. People who are the legal and beneficial owners of capital hold that capital for themselves and can use it as they wish."

Definitely ignore what I said about Citizens Advice Help to Claim. A bit of reading reveals they are in cahoots with the DWP to provide this service and it appears to be aimed at people who are ready to migrate. As you are not and haven't even had a formal migration notice, don't risk being "accidentally" migrated before your time.

The present capital thresholds were set in 2007. That was their first increase since Mrs T's day, back in 1990. Alas, there is no political will to increase them these days.

When is the assesment stages?

For instance say we have 14k in the bank and we have been on UC for 14 months and my wife's pay goes jnto the bank and the Children's disability payments and it takes us 17k and by the end of the month after we have paid all our outgoings and living expenses we are back down to 14k?

It's terrible that basically there's no incentive to save and now no one can afford to put a deposit down to save for a house. It's like keeping everyone down unlike tax credits which allowed people to move forward and upwards. Its like keeping people down and poor. No options to move forward or buy a house or start a business etc.

This link gives examples of how assessment periods are calculated and it also explains how UC awards can sometimes fluctuate if you are paid weekly, 4 weekly.

In brief, from the link your assessment period begins the day you claim and ends 1 calendar month later, eg claim on 25 May the relevant assessment period is 25 May - 24 June.

https://www.litrg.org.uk/tax-guides/tax-credits-and-benefits/universal-credit/universal-credit-and-employee-pay