Can UC do this

[Ohfear688754]

I am not looking for angry comments at me, just genuine advice.

2022 I was on Tax credits and I got divorced. I got X amount of money which was reported correctly and used in June 2023 to buy a house, leaving me with about 8k in savings.

May 2024 I was moved over to UC where all accounts and savings were declared.

Fast forward to yesterday where I have a Compliance call with UC (basically in the Fraud arena) who have recieved HMRC figures for 2023/2024 which shows that I had savings over 16k thst year.

They are concerned that because I had savings then that I might have had savings I didn’t declare when I applied. Went through all my accounts and gave current amounts and explained I had had that money, but that I used it to buy a house and it was prior to my UC claim and that when they get the 2024/2025 tax details they will see that.

Not good enough and they have asked for permission to contact all my banks and get statements for that tax year so they can “see” if the money went.

Is this right? I wasn’t even on UC then, I was on Tex credits and I declared all the interest I received, so it’s clear there was money.

Im not concerned because I know exactly where and when the money went and nothing will be found, but it seems a bit long reaching for UC to be able to check for a period of time when I wasn’t even claiming it? The rules for Tax credits were different, so I wasn’t doing any thing wrong then either?

It doesn’t matter it was under different rules. You’re not being being investigated for claiming tax credits. They want to make sure that the money they know you had in that year hasn’t been hidden just so you can claim. That is reasonable and there is nothing wrong with that whatsoever.

I would have thought you being able to evidence the house purchase would be enough so surprising they want to check all accounts, but it is not unreasonable at all.

It’s the interest you received on the savings that have triggered this

I wouldn’t allow them access to you bank account account as once you have signed that form they can check whenever they want in the future

but I would send them the statements over for the period required

They won’t accept that unfortunately. They want to write and get the statements themselves.

I know I’ve done nothing wrong, I’m too much of a stresser to even try to do anything fraudulent.

I think they will be checking that you didn't intentionally and inappropriately offload all your savings to enable a UC claim to be started.

If you haven't done anything wrong (which I agree, it doesn't seem like you have), I would just be helpful and go along with everything they request.

After all, we do want investigators to find the folk who, for example, turn savings into cash, in order to claim benefits so what occured in the run up to the claim is relevant.

@watchingplanesicantaffordthat is correct. Tax credits was a way more generous system. My mum saved up and bought a house whilst on tax credits. She was never hassled to work more than three days a week even when I was in secondary school. On UC neither of those things would have been allowed.
OP I get it. They’re expecting you to have lived your life in the same way as if you’d been on UC which you weren’t, you were on tax credits. It’s like being punished for spending four years before you went bankrupt.

Yes they can do it and yes it’s a good thing - let them do the grunt working of wasting their time on a mistake they’ve made, so you don’t have to.

It will be a combination of the rules around capital, and deprivation of capital. They just need to satisfy themselves, and document, that a) you have under £16,000 and b) that the reason you have under £16,000 is one of the permitted uses of the money that you had.

The fact that you spent the money, in itself, isn't enough. They need to make sure that it went on the house, and that all of it either went on the house or other justified expenses.

It's not a slur on your character. It's just due diligence with public funds.

Similarly, if UC investigated me, they would want to know why I have more than £6000 in savings and haven't declared it. It isn't true. I have some savings and the rest of the money belongs to my children because I'm their DWP appointee. It won't be a problem, if they do, because everything that comes in is clearly labelled with their NI number, but they will be justified in checking.

This is a great post. The deprivation of capital point is key here. It isn't enough to simply prove that you no longer have the money.

Sadly I think that due to other people’s dishonesty you are being investigated because of the timings of your divorce/house purchase/savings interest coinciding with tax credits being phased out. Not your fault obviously but I can see how this is stressful. As @Fiftyandme has just said - let them do
all the work and try not to worry.

If you've not done anything wrong you just have to accept that level of snooping when compliance are involved. If you had 8k then were you receiving a lower amount, as anything above £6k they reduce it?
It does seem annoying but if it will become clear when they contact the bank that you used it to buy property.

pop over to the dwp / benefit section on Reddit
they have actual. DWP / Civil Servants that work for universal credit and can give you advice
The trouble with signing that form is that it give them free access to your accounts for as long as they want

The thing is people do hide savings to claim benefits.
there was a mum at a school I worked at who won on a scratch card, got her brother to claim the money, paid him a percentage to keep it in his account. She then got him to pay off debts, buy Christmas presents, even a holiday .
she also told everyone so interesting to see if she got found out.

Have you sent them information on the house purchase and opening mortgage etc?

You would like to think that would evidence that you spent the money and save all
the time and cost investigating.

Nope. Because they don’t want that,
Ive told them and offered to evidence my Divorce payments and the house purchase, but that isn’t what they want.

What they want is access to all of my accounts so they can look, despite there being another tax year that they haven’t had details for and despite the fact I did declare savings when I opened it, just not the savings I had in 2023 because I spent them in 2023.

I hadn’t even had a migration letter then so they can’t even argue I spent my Capital

Of course they can do this. It's public money and they need to access bank accounts to ensure your claim is not fraudulent. If you've complied with the rules you've nothing to worry about.

Beyond frustrating!!!

Yes they can. They can (hypothetically) argue that there was plenty of press coverage about the migration from TC to UC and that you were likely to be aware of it, even if you hadn't yet been asked to migrate. Deprivation of Capital is a subjective matter and it is for a Decision Maker to review the available evidence and decide if the pattern of spending, purchase type or timing of spending indicates that a claimant deliberately deprived themselves of savings in order to qualify for Universal Credit.

Say you had £350,000 and you spent it on a house. That's not DoC.

Say you had £350,000 and you spent £330,000 on a house and £20,000 on a car, that might be DoC if the Decision Maker decides that £20,000 was unnecessary and you bought a fancy car to bring your savings under the limit.

If you bought a house and then bought furniture for it, not DoC. If you bought a house and then bought expensive artwork to decorate it, that might be DoC.

It's all in the detail, which is why they are asking for access to the bank statements.

I'm fully behind benefits, but I also agree that it makes perfect sense for them to want to check there aren't any forgotten (or 'forgotten') accounts where money has been moved.

Well yeah, they want to make sure you didn't just move the money around. I think it's fair enough. Don't like the rules, don't claim the money.

I don't think it's unreasonable for @Ohfear688754 to be feeling mistrusted and upset. It's perfectly logical to her that she got the money, spent the money, and declared the remaining money, so it seems unreasonable that DWP want to go digging through past statements.

Unfortunately, Deprivation of Capital is the thing that means the DWP can, and do, dig deep to make sure that people aren't buying things or giving away money to bring them under the claim threshold for UC.

OP may not like it, but it is the rules. They don't know her personally to trust her or otherwise. It isn't, and shouldn't be a system that relies upon trust.

Or more commonly transferred £20k to family to 'look after' or into DC accounts. It's not unreasonable of DWP to check where large chunks of ££ went prior to a claim being opened.

I think HMRC seem very heavy handed and agree it is not relevant when you were on tax credits for them to investigate that period. I think a lot of posters here have jumped on the ‘if you’ve not anything to hide then you have nothing to worry about’ stance. But the truth is that often government services don’t work like this and mistakes can easily be made. How many would have said that ‘if they’ve nothing to hide they shouldn’t be worried’ during the post office scandal? I would put a short well written email (chat gtp can help if needed), to their complaints department. This outlines your position with attached documentation. It is a waste of HMRC here. Accountability works both ways here. It feels very invasive and completely unnecessary. I would outline the distress caused. They should look at the facts before doing a deep dive. I can imagine it makes you feel like you are under a microscope. I hope they sort it out quickly. You don’t want to be left without UC or having to defend yourself.

I should add if OP didn’t have the money at the time to applying then why write down what she had historically spent?! Is there a box for that? I understand the transfer of TC to UC and hiding of monies and yes that is valid however she has shown she didn’t have the money and where it went so why then the deep dive? HMRC make mistakes too. Why are we so frightened to point this out? It feels like we have been conditioned to believe that if you receive benefits then the Government own you in some way. Remember we pay the Government. It has to be a two way street. When people are vulnerable and claiming benefits, delving into their lives heavily handed is the last thing many need. The actual fraud rates within benefits is minuscule. But that’s a debate we’ve had ten times over on here…please be kind people.

however she has shown she didn’t have the money and where it went

Has she? Isn't that what they're asking to see?