ESA & JSA savings limit question

[SussexLady]

Just want to check that I have the facts right, can anyone confirm?

 

Savings up to £5,999 ignored.

 

From £6,000 to £16,000 - for every £500 in savings, £1 is deducted from the weekly benefit you receive

 

Over £16,000 in savings - no ESA entitlement until savings are diminished to under £16,000.

 

Is this the same for JSA?

[SussexLady]

vvvvvvvvvvvv

Edited August 12, 2009 by SussexLady

[SussexLady]

I just found this:

 

http://www.jobcentreplus.gov.uk/jcp/stellent/groups/jcp/documents/websitecontent/dev_015666.pdf

 

Which says it is for every £250 savings, £1 is deducted.

 

I have more than £16,000 in savings. I know that sounds a lot to some on here who are much worse off, but when you are in your 50s and are sure that you will never get a paid job again, that isn't such a large amount to last the rest of your life. I might have to get my home (owned) adapted for my disability, or move into a bungalow. I might need to buy an electric disabled car or something ( an elderly friend just spent £3,000 on a hearing aid!) I might need to supplement my state pension week by week for 20+ years. I don't want to be that pensioner who half starves and freezes to death because she dare not switch on the electric fire!

 

Does anyone know if I can legally put some of that money somewhere that "they" cannot include it in the assessment? Some kind of investment or something I don't know about where I can stash away the bit that is above £16,000? I'm not thinking about committing a fraud on the benefits system, but you know like accountants tell you clever things to do with money to reduce your tax liability - does anyone know of a way for me to keep my capital but tie it up in such a way that they cannot take it into account? If I had say £100,000 I could buy a flat and let it. I'd still own an asset worth £100,000 but it would not count as "savings" in such a way as to disallow benefits. (I only have a few thousand, so buying property really is out of the question.

 

Any ideas?

[antone]

There are a few points to consider here. The benefit system is intended as a last resort, so I'm not sure that it's in principle all that bad to ask you to spend your own money to support yourself before you ask the taxpayers to spend theirs. In practice, I know that people do have real concerns about retirement and how to support themselves, I'm just pointing out how it's seen by the government.

 

What we're looking at here is the idea of "notional capital". If it appears that you intentionally disposed of capital, and that could potentially include putting it beyond reach by investing it in some way when you could have used it to support yourself, you may well be treated as still having access to that capital for the purposes of deciding your eligibility for benefit. It wouldn't be criminal fraud or anything like that - you're perfectly entitled to do what you like with your own money - but from the point of view of a benefit calculation, it could well be relevant.

 

Same would apply if you did have £100,000 and used it to buy a second house to let out. Not only would you have disposed of capital, but you'd now have income from the property that would be considered when deciding your benefit claim.

 

But it's a grey area. If you needed to spend the money now on things like necessary alterations to your home for a disability, medical appliances or whatever, things that you obviously need, then it could well be OK. A decision maker would look at how much you spent and why. As a general rule, though, if you intentionally dispose of capital specifically in order to qualify yourself for a benefit, you won't get the benefit.

[SussexLady]

Hello Antone

 

Sorry to say but I think you have a coupla things wrong here. You said...

 

"The benefit system is intended as a last resort, so I'm not sure that it's in principle all that bad to ask you to spend your own money to support yourself...I'm just pointing out how it's seen by the government."

 

If this were the case, and if this is "how the govt sees it", how come when I was on Incapacity Benefit I discovered that

 

(1) Any amount of unearned income from any source, which (I asked and it was confirmed in writing) includes lodgers in ones own house and rent from another property let to tenants, does not affect Incapacity Benefit at all? This is the govt's own rules. You can be getting say £2,000 a month from rents and you are still entitled to IB.

 

(2) One can ALSO earn up to £92 pw and work 16hrs a week without it affecting entitlement to benefit, IB or ESA.

 

I'm not making any moral principle judgement one way or another, I am just saying that the comment you made is wrong, and it is NOT the government's view that benefits are always only a last resort.

 

Hence your comment:

 

"if you did have £100,000 and used it to buy a second house to let out... you'd now have income from the property that would be considered when deciding your benefit claim."

 

Is also completely wrong. I had a let property, declared it, and was still eligible for IB. When I sold that property, I paid off my mortgage and ended up with a lump sum. I told the IB advisor that I now had a lump sum in savings and was told that it is ignored and irrelevant to IB.

 

The problem I have now arose because they have moved me from IB to ESA. ESA rules are slightly different in that if you have £16,000 or more in savings, you get absolutely nothing.

 

Lastly, I find it insulting that you have put me into a category of non-taxpayer and everyone else as the taxpayer.

 

I worked fulltime from age 16 and 3 weeks until I had the accident at work in middle age that causes me to be unable to work. I've also paid tax on my property income (when I had it) on the interest from my savings and I pay tax on just about everything I buy and in council tax.

 

Please explain how that makes me NOT a taxpayer?

 

Even if you Antone are a taxpayer today, you weren't until you got your first job, and you might not be after you are 65.

 

And Antone, if you walk out of your office one day and get hit by a car mounting the pavement, you could end up in the same situation as me, and I wonder if you'd still be on your high horse then, throwing out moral judgements against benefit scroungers, of whom you would be one?

[Jack Daniels]

Why did you come off Incapacity Benefit ?

did you fail your PCA or did you go to credits only

 

the rules for capital are similar for I.S and E.S.A

 

I.S is means tested and anyone over the 16k cant qualify

the rules are unfortunately there,

[SussexLady]

Jack - Failed PCA (if pca means medical?) foreign doctor with very poor English who conducted my yearly examination on behalf of the govt. seems to have written down something other than the answers I gave him. Each year I got something like 15 points then suddenly he gives me 3. I no longer qualify for IB, even though my GP says she will sign any certificate to say I am unfit for regular paid work.

 

The govt are not interested in the judgment of a GP who has known me 17 years just the foreign doctor with poor English who saw me for 5 mins.

 

I understand that the govt has told the people who conduct these medicals to get 1.5m people off IB maybe that is a part of it I don't know.

 

The kind lady on the benefits helpline advised me to "Spend or otherwise get rid of anything over £16,000" to qualify for ESA.

 

As far as I am concerned, as I am completely unemployable (nobody wants me) as a result of my illness, I am "morally entitled" to IB, which is NOT means tested.

 

I am only being means tested now as a result of the doc's mistake.

 

It's not my fault the doc has made a mistake.

 

I immediately appealed and asked for another medical and this was refused.

 

It does not look like I am going to get any answer to this question of what I can buy with my money to get rid of it. Everyone just wants to talk about benefits. And scroungers etc.

 

If I was a reckless trog who blew all my money on beer and fags and playstations, I would qualify and no questions asked.

 

Because I live a very frugal lifestyle and keep and nurture my savings, planning for my old age and probably disability, I am pilloried as a scrounger.

[Jack Daniels]

I dont think you are a scrounger, the benefit system is there for when you need it, its not up to anyone to call anyone a scrounger for whatever reason

 

with regards to over 16k, I would think if you owe anybody any money pay them back, pay off any credit card bills, buy a car if you need one or yours need replacing but not a 4X4, a holiday would not be counted and any necessary improvements or repairs on your property should be ok

 

sometimes you can put these things off maybe now is the tiime to do some of them

 

can you claim JSA i have heard of people doing so whilst on appeal

[antone]

Calm down. You might be surprised to learn what I do for a living. No-one is calling you a scrounger, least of all me.

 

If you are entitled to a contributory benefit such as IB or ESA ©, your capital will not be an issue. This is because you have made the contributions and thus are entitled to the money if you satisfy the generic conditions. And yes, unearned income is not usually considered for IB, for more or less the same reason. But contributory benefits are not what I was referring to when I spoke about the "last resort".

 

Since you asked about capital, I presumed you were planning to apply for a means-tested benefit, so I pointed out some relevant rules. None of this is any sort of moral judgement.

[antone]

with regards to over 16k, I would think if you owe anybody any money pay them back, pay off any credit card bills, buy a car if you need one or yours need replacing but not a 4X4, a holiday would not be counted and any necessary improvements or repairs on your property should be ok

 

 

[emphasis mine]

 

Careful with this. Paying debts before they are due could be seen by a decision maker as disposing of capital.

 

As a general rule, this is a horrible aspect of benefit law, and you have identified the nub of the problem. What is or isn't a reasonable use of capital? Buy a Ferrari? Probably not reasonable. Car falling to bits and 3 disabled children to ferry around, so you buy a second-hand Renault Espace? Probably reasonable. And this is why it's horrible - in the end, it's too subjective. I don't have an easy solution, though.

[Jack Daniels]

if a large amount was owed on a credit card and a lot of interest was being accrued then I think it would probably be ok to pay it off, like wise if you owed say a friend money and they needed it back quickly then that would probably be ok

But if you pay your mortgage off early then that would be different

 

It is a minefield and where one decision maker might say there has be

no deprivation of capital another one might say there has

Edited August 14, 2009 by Jack Daniels

[antone]

if a large amount was owed on a credit card and a lot of interest was being accrued then I think it would probably be ok to pay it off, like wise if you owed say a freind money and they needed it back quickly then that would probably be ok

But if you pay your mortgage off early then that would be different

 

It is a minefield and where one decision maker might say there has be

no deprivation of capital another one might say there has

 

Yup - that's why I'm saying that they whole thing is a nightmare. And I can't see an easy solution. It seems reasonable to suggest that folks who can afford a Ferrari or a Caribbean cruise probably shouldn't get means-tested benefits. It seems equally reasonable that someone whose house is falling down or whose car just packed up shouldn't be penalised. But there is a pretty huge grey area in between.

 

Another problem is that a customer could call the BDC and say "if I do X, will Y happen?" and the only truthful answer would be "I don't know." In many cases, it needs a decision maker to look at it, and that will only happen once "X" has been done.

[installspark]

Does anyone know if I can legally put some of that money somewhere that "they" cannot include it in the assessment? Some kind of investment or something I don't know about where I can stash away the bit that is above £16,000? I'm not thinking about committing a fraud on the benefits system, but you know like accountants tell you clever things to do with money to reduce your tax liability - does anyone know of a way for me to keep my capital but tie it up in such a way that they cannot take it into account? If I had say £100,000 I could buy a flat and let it. I'd still own an asset worth £100,000 but it would not count as "savings" in such a way as to disallow benefits. (I only have a few thousand, so buying property really is out of the question.

 

Any ideas?

 

Short answer is no. This would be classed as deprivation of capital and you would be assessed as having notional capital to the amount involved. There are certain exceptions to this however, one being using capital and savings for essential repairs to your main property. Even then you will need to prove to a decision maker that the repairs were essential, the amount spent by way of receipts, and that the price paid was reasonable.

 

if a large amount was owed on a credit card and a lot of interest was being accrued then I think it would probably be ok to pay it off, like wise if you owed say a freind money and they needed it back quickly then that would probably be ok

 

This would still be treated as deprivation of capital. However if you were to use capital and savings to pay a court order for a debt then this would be accepted.

Edited August 14, 2009 by installspark

[SussexLady]

Thank you everyone and sorry to Antone for flying off the handle.

 

From your responses I think I need to make it clear which I have omitted to do that the DSS (or whatever they are called these days) do not know that I have this money. So it's not like I am going to say to anyone, "oh, last week I had 64k and this week I only have 16k so can I have my benefit please."

 

They do not know I have this money and the only way they could find out would be by getting access to my b/s or possibly via the tax office as I do declare the savings on my tax return.

 

I am guessing that they don't do this with every person who puts on their appplication that they have 16k in savings, do they? The form says I have to "prove" all savings over 5,500k. If I can hide 48k somewhere then I can show them I have 16k in such a way that does not show that used to be 64k can't I? E.g. I can place 16k in the post office or a building society account and hand them the statement. I could even put it into premium bonds and photocopy them.

 

I am thinking that they would only find out that I once had more if they investigated me at random.

 

Having 64k in savings, I never borrow money. So no, I don't have any debts that I can repay. Repaid the mortgage years ago with proceeds of sale of 2nd property. I cannot drive, so buying a new car is out of the question. There are no repairs that need to be done to the house. I'm having two trips away this year both in UK all paid for already.

 

Besides which, it's not that I want to spend this money and lose it forever. The contrary! I need to protect this money carefully because as I become progressively older, more infirm etc it's going to have to spread a long way over a long time.

 

64k is not much. My friends earn between 22k and 30k so its only 2/3 years' earnings and it will have to supplement my income for the next 30 years. Nobody can genuinely live on benefits! For example, totting up all my household bills then dividing by 52, the house costs me £103pw to run. This does not include food, toiletries, clothing, replacing household items when they conk out like fridge, boiler, TV; let's add £50pw for those. On top of that I currently pay £6 on taxis and £3 entry to the pool, 3 x weekly, because gentle swimming is the only form of exercise I can do. That's £27pw. So my total weekly outgoings are about £180.

 

If I hide 48k, declare 16k, I will be eligible for £60pw, from which they will deduct £1 for every £250 I have in savings, leaving me with £20pw. How can I pay £180pw out of £20pw? I dip into my savings.

 

If I get back onto IB I get £85. Still not enough, but better. When I am 65 I will get a state pension. Again, I will have to supplement this out of my savings, every week, every year.

 

64k isn't such a lot when you think it through. If we assume very frugal living, no holidays or major expenses, if I have to draw £100 every week to supplement my benefit or pension, that's £5,200 taken out yearly. In just ten years, £52k is gone. If during that 10 years I have to have my home modified or pay for medical treatment or house repairs or something else, that 64k could very easily be gone in just ten years.

 

If that happened, I cannot imagine for the life of me how I could even pay my bare household running costs of £103, let alone buy food. The whole scenario just fills me with utter despair. I'd rather kill myself than be one of those impoverished old ladies huddling round a one-bar electric fire.

[Aviva]

If you apply for JSA you are asked to provide bank and saving account statements, etc. I think it's for the last 3 months. I am sure it will be the same with ESA and all other means tested benefits.

 

Even if you open a new account and deposit money in there they will ask you where the money came from. If you say it was transferred from another account you will then have to show statements for that account.

 

Even if you did manage to successfully hide the money you will have to continue doing this for the rest of your life. All it takes is for someone to phone and say they suspect you have more money/income than you should and you'll be under investigation. If they find the money then you will end up paying back a large overpayment at least. Have you seen how many people post about being accused of benefit fraud and being interviewed under caution.

 

I agree the situation is terrible you've done what the Government wants and saved for your old age but are now being forced to spend the money. But is hiding the money worth the risk?

 

Have you tried posting about your IB problem on the disability forum? They may have some advice for you as this seems to be happening more and more.

[SussexLady]

Hi Aviva

 

Your first sentence is the first useful piece of information I've had. Now you have told me they want to see 3 months statements I will move the money today so I can start claiming in November.

 

Your second point: I could say the money was previously under my mattress and someone persuaded me to bank it.

 

Third sentence: I don't know my neighbours, I don't sit around chatting in pubs or cafes, I spend 90% of my time alone, and not one person in my life, not even my close friends or my family (all distant) know that I have ever claimed benefits and I would never tell them.

 

Only the DSS staff know and how would they know how I live? Do they spy on everyone's private life, find out what their bills are and wonder how they pay them, etc? I will only get £20pw ESA benefit anyway. If the DSS work out that living costs more than that will they investigate me?

 

Yes I have posted the other question.

 

I am planning NOW in case I do not win at the tribunal in December. According to people's posting on here and other forums these tribunals are often hostile and as the govt has told the people that hear them to remove 1.5m from IB, even though I am too sick to work I still might not win my tribunal.

 

And if I need 3 months notice to move my savings its is just as well I am asking now.

[Aviva]

One of the regular advice givers said that a lot of people reporting possible benefit fraud are reporting friends they have fallen out with. It's sad but you are doing the right thing by not telling anyone anything about your finances.

 

From what I've heard the only times that they may look at your lifestyle is if they have reason to believe that you have committed fraud and this seems to be mostly through reports on their fraud hotline or where people are doing things like claiming and working and paying tax. We once had one woman who was done for claiming JSA in one area of London while working in another. Where did she work? A Jobcentre.

 

I hope the tribunal goes well and they find in your favour. My uncle suffers from a long term chronic illness and it always amazes me that his benefits aren't reliant on the testamony of his GP and the doctors he sees at the hospital and the results of the many tests, etc that he has had. Instead, it's someone he has never met before who talks with him for a few minutes and how he appears on the day. Like many people with an illness or disability he has some good days (he can walk for short periods using elbow crutches) and terrible days (he can't even get out of bed). My aunt is his carer and is always worried that he will have an assessment on a good day and they will decide that he shouldn't be on benefits.

[Jack Daniels]

I didnt know how much money you had managed to save and I think you have done remarkably well to achieve this

I agree its not good when you are penalised for managing to save sometimes it might be said what is the point

 

but be aware if you pay tax on your savings, regular scans are done against the NINOs that is national insurance numbers of people paying tax and the same NINos claiming means tested benefit, this is called GMS scan, there this a team dedicated to this, its a general match

 

if they get such a match then they can refer these customer to compliance or fraud who check out the capital and claim throughly

Edited August 14, 2009 by Jack Daniels

[installspark]

Your first sentence is the first useful piece of information I've had. Now you have told me they want to see 3 months statements I will move the money today so I can start claiming in November.

 

Is it to be taken as read that you are planning to commit benefit fraud and claim income related ESA knowing that you have savings of more than £16k? Is so then another piece of useful advise...you will eventually be found out and prosecuted!!!!!

 

When you sign or verbally agree the declaration on the claim you are agreeing to the following

 

 

I declare that the information I have given on this form is correct and complete as far as I know and believe and I have included all my income and savings.

 

● I understand that if I knowingly give information that is incorrect or incomplete, I may be liable to prosecution or other action.

 

● I understand that I must promptly tell the office that pays my benefit of anything that may affect my entitlement to, or the amount of, that benefit.

 

Also you are agreeing that the DWP may use you information, and collect information from other organisations to prevent and detect crime. This includes financial institutions and other government departments

 

Whilst there are many instances of the benefits system being unfair and it is a system which has many flaws, I cannot condone anyone who intentionally seeks advice with the intent to commit fraud.

[Rooster-UK]

Please note.....

 

Benefit fraud is a crime!

The CAG does not and will never condone breaking the law.

 

If that is your intention then you will not get the advice that you are looking for on these forums.

If, on the other hand, you are looking for advice regarding legal benefit claims, then yes, we can and will help you.

 

Please consider that there are many people in prison for benefit fraud who thought that they had gotten away with it, until a couple of years down the line, there came a knock on the door........

 

Rooster-UK.

[Jan4a]

There is always a paper trail and the DWP have accountants that will follow it. I don't think it is worth it, I wouldn't risk being prosecuted for benefit fraud and having my name in all the local papers. I wouldn't be able to relax either, it wouldn't be worth the stress.

 

My stepfather currently has money stashed in his grandchildren's names but his name is still on the account. Might be because he doesn't pay tax this way. Makes me very nervous though.

 

There are two types of Jobseekers as well. I went on one type for the first 6 months after I was made redundant but didn't get full housing benefit because I had savings. After the first 6 months I had to fill all the forms out and provide bank statements again to go on the other type. I'd spent £4K of savings and they wanted to know where - I'd transferred 3K to my current account so highlighted my bank statements to prove this and £1,000 went to Barclaycard which again I could prove, so I had no problems.

 

So they do look and they do see your statements more than once - but the person in the JC told me they were usually looking for big amounts given to family etc.

[MARTIN3030]

Spare a thought too for those legitimate claimants who have to go through heaven and earth sometimes to get anything because the rules have made it so on account of those who have not been upfront.

A couple of grand in the bank does not go far these days,and I think there is a good arguement in raising the thresh hold from what it is now,but rules are rules and we have to campaign or wait for that.

Maybe a fairer way to do it would be individual means testing since everyone has different commitments.

Having said that,I support Roosters post 100%.

[antone]

Thank you everyone and sorry to Antone for flying off the handle.

 

 

I appreciate that, thanks. No hard feelings.

 

But you are proposing something that could get you into serious trouble. I can't, in all good conscience, tell you to go ahead and do it. Spending or investing your own money as you choose is your right, but it may affect your claim for benefit. Intentionally concealing assets in order to gain a benefit could cause you serious trouble.

 

I cannot say this strongly enough: do not do this.

[MIKEY DABODEE]

Quote:

Originally Posted by SussexLady

Your first sentence is the first useful piece of information I've had. Now you have told me they want to see 3 months statements I will move the money today so I can start claiming in November.

I had to read that twice to beleive it

You state on one of your earlier posts that no one knows that you are on benefits, so who would know?

Well for one yourself, could you knowingly commit fraud and claim a means tested benefit when you know you well have over the permitted capital limit.

Could you ??

There are people on here who give excellent advice and

their knowledge of benefit is superb please dont abuse it,

at the end of the day you will have to decide yourself

but as someone said there are systems in place to track such capital fraud and you will usually get found out

and then everyone will know

[SussexLady]

Hmmm. but it's ok for the rich to ask how to "hide" money from the taxman by doing all sorts of clever things with their money to evade tax liability. Message received.