Will close claim - lump sum will be paid into bank account - will this flag up to DWP?

I am planning to close claim as I will soon have a large sum paid into same account as benefits paid. Will this flag up to DWP so that they will want to investigate? Stems from fully legal source, and I'm fully entitled to money.

How large a sum and what benefits do you receive?

The income based benefits stop once you have £16,000 accrued. Savings between £6,000 and £15,999 reduce your award. I think it is something like £4.35 per £250 or part £250 over £6,000 per assessment period.

If this money won't take you over £16,000 then it is worth keeping your claim open. If it keeps your total assets below £5,500 you don't even need to inform the DWP. As to the source of the money, the source of the transaction should be on a bank statement so that should get the DWP off your back if they ever ask. They used to do something where they would ask banks to identify accounts where X amount of interest had been paid as that would show an account had more than the savings limit and then see if these accounts belonged to benefit claimants. Your bank has responsibilities under the Know Your Customer regulations if they think a transaction is dodgy but no idea if they would notify the DWP. Bottom line, the money is legitimately yours and if the amount doesn't require you to close your account, don't. See it as a nest egg which could come in handy in the future.

I'm afraid I can't help with Housing Benefit and Council Tax Benefit.

Ignatius wrote:How large a sum and what benefits do you receive?

The income based benefits stop once you have £16,000 accrued. Savings between £6,000 and £15,999 reduce your award. I think it is something like £4.35 per £250 or part £250 over £6,000 per assessment period.

If this money won't take you over £16,000 then it is worth keeping your claim open. If it keeps your total assets below £5,500 you don't even need to inform the DWP. As to the source of the money, the source of the transaction should be on a bank statement so that should get the DWP off your back if they ever ask. They used to do something where they would ask banks to identify accounts where X amount of interest had been paid as that would show an account had more than the savings limit and then see if these accounts belonged to benefit claimants. Your bank has responsibilities under the Know Your Customer regulations if they think a transaction is dodgy but no idea if they would notify the DWP. Bottom line, the money is legitimately yours and if the amount doesn't require you to close your account, don't. See it as a nest egg which could come in handy in the future.

I'm afraid I can't help with Housing Benefit and Council Tax Benefit.

Thank you Ignatius. It is over that amount. I don't get housing benefit, but my council tax benefit will be stopping.

One thing I would add concerns the deprivation of assets rules. Where a benefit claim is closed because of assets in excess of £16,000, should you need to re-claim benefits in the future when your capital falls below £16,000 the DWP could look at how you had been spending your money. The deprivation of assets rules are complex and can see people classed as still having money in excess of savings limits even when it has been spent, thus reducing/stopping entitlement to benefits. Buying a load of bling or gifting money are examples which would probably be looked at with suspicion. Reasonable spending is normally fine.

Best thing to do is only close your claim when the money hits your bank account. Do some thinking about how long the sum will keep you out of the benefits system. If you consider it unlikely you will need to claim for a decent period of time, enjoy your windfall. If you think your escape from DWP drudgery will be short lived just be mindful they can look at your spending for the period between a claim closing and a new claim being made.


short lishort lived,

Ignatius wrote:One thing I would add concerns the deprivation of assets rules. Where a benefit claim is closed because of assets in excess of £16,000, should you need to re-claim benefits in the future when your capital falls below £16,000 the DWP could look at how you had been spending your money. The deprivation of assets rules are complex and can see people classed as still having money in excess of savings limits even when it has been spent, thus reducing/stopping entitlement to benefits. Buying a load of bling or gifting money are examples which would probably be looked at with suspicion. Reasonable spending is normally fine.

Best thing to do is only close your claim when the money hits your bank account. Do some thinking about how long the sum will keep you out of the benefits system. If you consider it unlikely you will need to claim for a decent period of time, enjoy your windfall. If you think your escape from DWP drudgery will be short lived just be mindful they can look at your spending for the period between a claim closing and a new claim being made.      


short lishort lived,

Thank you Ignatius, your points are very helpful.

For cc120 and anyone else who finds themselves in a similar position, a couple of links about the deprivation of capital rules and means tested benefits. The key thing a decision maker would consider is whether the significant purpose (note, not the main purpose) of spending/gifting capital
was to reduce capital to increase the benefits they could claim. Advice I've read elsewhere on this subject is if you expect to reclaim benefits sooner rather than later, keep receipts for large expenditure just in case. I personally wouldn't even tell the JCP I was closing my claim because I was over the savings limits.

https://commonslibrary.parliament.uk/how-savings-can-affect-benefits/

https://england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules#:~:text=Deprivation%20can%20mean%20that%20someone,was%20not%20their%20main%20purpose.

Ignatius wrote:For cc120 and anyone else who finds themselves in a similar position, a couple of links about the deprivation of capital rules and means tested benefits. The key thing a decision maker would consider is whether the significant purpose (note, not the main purpose) of spending/gifting capital  
was to reduce capital to increase the benefits they could claim. Advice I've read elsewhere on this subject is if you expect to reclaim benefits sooner rather than later, keep receipts for large expenditure just in case. I personally wouldn't even tell the JCP I was closing my claim because I was over the savings limits.

https://commonslibrary.parliament.uk/how-savings-can-affect-benefits/

https://england.shelter.org.uk/professional_resources/legal/benefits/universal_credit/universal_credit_capital_rules#:~:text=Deprivation%20can%20mean%20that%20someone,was%20not%20their%20main%20purpose.

Thank you Ignatius. Do you mean just to tell them that I'm closing my claim with no reason, or a different reason?

You are not obliged to give a reason for closing a claim so if it were me I wouldn't bother telling them the real reason or a made up reason for that matter either. Just make sure the day your capital exceeds the savings limits you close your claim.

Ignatius wrote:You are not obliged to give a reason for closing a claim so if it were me I wouldn't bother telling them the real reason or a made up reason for that matter either. Just make sure the day your capital exceeds the savings limits you close your claim.

Thank you Ignatius.

cc120 wrote:I am planning to close claim as I will soon have a large sum paid into same account as benefits paid. Will this flag up to DWP so that they will want to investigate? Stems from fully legal source, and I'm fully entitled to money.

Is it a Lotto win? LOL