- Posts: 35
× Members
savings vs income re £6k threshold?
- LittleChloe
- Topic Author
- Offline
Less More
2 days 5 hours ago #307281 by LittleChloe
savings vs income re £6k threshold? was created by LittleChloe
Hi there,
I’m very confused and worried because my UC payments keep tipping me temporarily (for a number of days each month) over the £6k threshold. I’m trying really hard to stay underneath it but I have a LISA that I can’t access, taking up much of the threshold, leaving me very little bandwidth for the money I can actually access!
I get tipped over for a few days between my payments coming in, and my bills and rent go out.
But this is not ‘savings’ it’s income which goes out again straight away.
I was under the impression that savings and income were treated differently (I thought I read that its only savings if you still have it over 1 month after the assessement period? is that the case?)
HOWEVER, when you apply for UC all they ask you is what your TOTAL of income + savings is, so they seem to suggest that is the amount that needs to be under £6k.
1. Please can you help me understand which way this £6k threshold is calculated?
2. A related follow up question: I want to get rid of the LISA (because of these problems) but I’m scared this will trigger a note from HMRC to DWP saying my savings have changed (because the HMRC will get back the 25% they put into the LISA). I really don’t want to trigger an audit into my savings because I have gone over the threshold as mentioned above and am scared I owe them money. Do you know if a change in a LISA would trigger a note from HMRC to DWP re change in savings and produce an audit?
Thank you for your help - this is keeping me awake at night with anxiety and I don’t know what to do.
Little C
I’m very confused and worried because my UC payments keep tipping me temporarily (for a number of days each month) over the £6k threshold. I’m trying really hard to stay underneath it but I have a LISA that I can’t access, taking up much of the threshold, leaving me very little bandwidth for the money I can actually access!
I get tipped over for a few days between my payments coming in, and my bills and rent go out.
But this is not ‘savings’ it’s income which goes out again straight away.
I was under the impression that savings and income were treated differently (I thought I read that its only savings if you still have it over 1 month after the assessement period? is that the case?)
HOWEVER, when you apply for UC all they ask you is what your TOTAL of income + savings is, so they seem to suggest that is the amount that needs to be under £6k.
1. Please can you help me understand which way this £6k threshold is calculated?
2. A related follow up question: I want to get rid of the LISA (because of these problems) but I’m scared this will trigger a note from HMRC to DWP saying my savings have changed (because the HMRC will get back the 25% they put into the LISA). I really don’t want to trigger an audit into my savings because I have gone over the threshold as mentioned above and am scared I owe them money. Do you know if a change in a LISA would trigger a note from HMRC to DWP re change in savings and produce an audit?
Thank you for your help - this is keeping me awake at night with anxiety and I don’t know what to do.
Little C
Please Log in or Create an account to join the conversation.
- LL26
- Offline
Less More
- Posts: 1533
17 hours 46 minutes ago #307330 by LL26
Nothing on this board constitutes legal advice - always consult a professional about specific problems
Replied by LL26 on topic savings vs income re £6k threshold?
Hi LittleChloe,
There are 2 thresholds one at £6000 and the other at £16000. You can hostile to receive benefit at £6k but will be subject to deductions of £1 for every £250 over £6k. The Upper threshold is £16 k. No benefit at all if you have more than £16k.
The rule applies to any money held, in bank accounts, or stocks and shares or other types of investments. Even though the money might derive from benefits or other income, it is the amount of money held that is important. Strictly speaking the amount of money in the bank will be relevant for each period for which you receive a benefit payment.
If you really only go over the £6k limit by a few pounds, your benefit won't stop, but it could mean that you might get overpaid, albeit by only a £1 or2. (Although obviously an overpayment can begin to add up if this occurs every week, and if you don't declare to DWP, even though this is only a small amount potentially you are committing a criminal offence.)
If you are worried about declaring income and then receiving varying benefits amounts and having to sort this is to spend a little if your money so that you are under the £6k limit. Maybe there is a useful disability gadget you could purchase or maybe something else necessary like new shoes or sheets etc. If you keep the receipts and can show a necessary purchase then there should be no come back from DWP. If DWP believe that you have bought unnecessary items to try and defeat the capital rules, DWP will assume you haven't spent the money and will make deductions that represent the amount spent. (This is called deprivation of capital. )
If you cancel the LISA account, especially if this brings you well under the £6k lower limit, this could raise an argument of deprivation of capital. However if you are only just over the £6k threshold there is no need to close this account unless you really want to, but I think it is sensible to conclude there could be an audit trail.
If you can show that your benefit income is taken up with necessary purchases or bills, even if your bank account value/s go over £6k, again this shouldn't be a problem. Also,maybe you can alter payment dates if that makes things easier for making payments that tie in with benefit payments.
I hope this helps.
LL26
There are 2 thresholds one at £6000 and the other at £16000. You can hostile to receive benefit at £6k but will be subject to deductions of £1 for every £250 over £6k. The Upper threshold is £16 k. No benefit at all if you have more than £16k.
The rule applies to any money held, in bank accounts, or stocks and shares or other types of investments. Even though the money might derive from benefits or other income, it is the amount of money held that is important. Strictly speaking the amount of money in the bank will be relevant for each period for which you receive a benefit payment.
If you really only go over the £6k limit by a few pounds, your benefit won't stop, but it could mean that you might get overpaid, albeit by only a £1 or2. (Although obviously an overpayment can begin to add up if this occurs every week, and if you don't declare to DWP, even though this is only a small amount potentially you are committing a criminal offence.)
If you are worried about declaring income and then receiving varying benefits amounts and having to sort this is to spend a little if your money so that you are under the £6k limit. Maybe there is a useful disability gadget you could purchase or maybe something else necessary like new shoes or sheets etc. If you keep the receipts and can show a necessary purchase then there should be no come back from DWP. If DWP believe that you have bought unnecessary items to try and defeat the capital rules, DWP will assume you haven't spent the money and will make deductions that represent the amount spent. (This is called deprivation of capital. )
If you cancel the LISA account, especially if this brings you well under the £6k lower limit, this could raise an argument of deprivation of capital. However if you are only just over the £6k threshold there is no need to close this account unless you really want to, but I think it is sensible to conclude there could be an audit trail.
If you can show that your benefit income is taken up with necessary purchases or bills, even if your bank account value/s go over £6k, again this shouldn't be a problem. Also,maybe you can alter payment dates if that makes things easier for making payments that tie in with benefit payments.
I hope this helps.
LL26
Nothing on this board constitutes legal advice - always consult a professional about specific problems
Please Log in or Create an account to join the conversation.
Moderators: Gordon, latetrain, BIS, Catherine, Wendy, Kelly, greekqueen, peter, Katherine, Super User, Chris, David