To think UC guidelines regarding savings are unfair

[dancinguser]

Prepared to get flamed for this and apologies if it's been done before but here goes.

So it's looking likely that DP will be made redundant within the next few weeks due to there not being enough work coming in to justify bringing back all of the staff that were working pre-lockdown.

I had a look into universal credit should this happen to see if we're able to get any support until he can find another job and we meet all of the criteria except "you and your partner have £16,000 or less in savings between you." We have been saving for a house deposit for 2 years and have just over £16k between us. Pre-lockdown we were viewing houses and have been waiting for the right one to make an offer on.

Now before the obvious is stated that we wouldn't receive support as we have money that others don't which could pay for the rent, bills etc. I've put an example below to explain why I think it's unfair -

Person A earns £30k per year, their outgoings total £10k leaving them with £20k. They spend a little of the money but put over £16k into savings for a house.

Person B earns £30k per year, their outgoings total £10k leaving them with £20k. They spend this money on luxuries such as a new car, designer clothes, a new sofa, the latest iPhone.

Both Person A & B lose their job. Person B receives UC to help pay their rent and bills, whilst sitting on their new sofa in their designer clothes with a nice car sitting in the driveway. Person A must burn through their own savings before being eligible for support, all whilst having 0 luxuries.

So whilst at face value it makes sense that people with savings pay using them, I find it ridiculous that two people who have had the exact same money coming in wouldn't receive the same support based on whether they are good at saving their money or not. Why are people who choose to save their money being penalised against someone who may have spent their money frivolously? IMO if two people both have had the same income they should be eligible the same support, AIBU?

Very unfair. It’s a poverty trap. It shouldn’t be up-to the government if one wants to save and not spend as the next person!

Tax credits is not like this. They are not interested in what you have in your savings.

Yes @babyroobs you are right the non dep deductions on UC are more generous than on housing benefit and the carers premium can be paid even if you are not eligible for carers allowance.

If you have "just over" £16k then surely you only need to spend the "just over" amount in order to be eligible

They deduct £4.35 a month for every £250 (or part thereof) for savings/capital over £6,000 but below £16,000. So the deduction on savings just below £16,000 would be £174 a month (I think - couldn't be arsed to get off the sofa to get a calculator, so did the sum in my head).

Tax credits is not like this. They are not interested in what you have in your savings

That's another reason the govt want everyone on UC!

@kojolo And that is one of the reasons why less and less people are now willing to become unpaid family carers now because of being targeted by shitty attitudes like the one you encountered.

@CatteStreet Brilliant post.

@Snowdown24

If I had even just 14k of savings no way would I claim UC. Absolutely not worth the trouble and hassle it causes, there is going to be a uproar in April 2021 when most people get a bill through the door and have to pay it all back in a lump sum because they are now working and not entitled to it anymore come end of year.

Happened to me in 2015 and I had to pay back 5k because I earnt a extra 3k and I paid tax on that 3k, never again I would touch that system if I had a choice. My mum used to say the benefits system was designed to keep you poor as it’s such a struggle to get out of it, I raised a eyebrow and thought what nonsense.....but she was right!

No one will get a bill through the door on Uc as it's based on real time earnings so the chances of overpayments are pretty low.

"If they can offer some one who hasn’t contributed to the state free dental work, free glasses, and free accommodation then all elderly people should be afforded the same"

Aaaannnndddd THERE it is. Your point beautifully proven @CatteStreet

If you can, watch the BBC show about it

Is this the same documentary where a guy was made to clean an entire train carriage in a matter of minutes?

Because THAT has aged well post Covid 19 pandemic.

And ppl wonder why the virus spread so widely, quickly and easily in the UK!

like people being able to work just a few hours a week

Because in a lot of cases those hours were/are INTERMITTENT AND INCONSISTENT which caused/causes problems in itself.

The 5 week wait so you have to take an advance is so they

a. save 5 weeks money
b. get you into debt. People in debt are more pliant..............more malleable

@HeIenaDove

If you can, watch the BBC show about it

Is this the same documentary where a guy was made to clean an entire train carriage in a matter of minutes?

Because THAT has aged well post Covid 19 pandemic.

And ppl wonder why the virus spread so widely, quickly and easily in the UK!

Yes, and the 62-year-old woman whose pension age had been increased to 67 at a stroke had to take on 3 cleaning jobs or the JobCentre was going to sanction her. She'd been made redundant from her full-time one so it could be outsourced to agency and then wound up working for the same agency, with 3 different jobs, on less money. But hey, result, she was off UC!

Some people are in for a very rude shock in a while when they're back to the usual requirements in the next couple of months and they won't be grousing so much about having too much savings.

Very similar to people who got made redundant and then made to go back to the same job but on workfare.

I’m not completely sure how the benefit system works, I only know my friends version of it as she is going through it now (So what I know might be incorrect and I’m willing to be corrected if so). Single mum, earns less than £15k a year. Currently, she can get no help with housing costs as She is still living in the mortgaged house. Once this sells and she moves in to a rented house, she can claim housing costs and her UC will go up to reflect this ‘additional’ cost. So UC will be helping to make a landlord richer. She will still be left with no long term stability like she would have if she payed off her mortgage.

It just seems really frustrating that the rich can get richer because of others need for benefits. I guess this is a result of all the council owned social housing being sold off though?

@Maryann1975

I’m not completely sure how the benefit system works, I only know my friends version of it as she is going through it now (So what I know might be incorrect and I’m willing to be corrected if so). Single mum, earns less than £15k a year. Currently, she can get no help with housing costs as She is still living in the mortgaged house. Once this sells and she moves in to a rented house, she can claim housing costs and her UC will go up to reflect this ‘additional’ cost. So UC will be helping to make a landlord richer. She will still be left with no long term stability like she would have if she payed off her mortgage. It just seems really frustrating that the rich can get richer because of others need for benefits. I guess this is a result of all the council owned social housing being sold off though?

If the house sells and she receives over 16k her Uc would cease altogether ? Does she have much equity in the property ? I assume it's the previous maritial home ?

Is there much difference to someone who is mortgaging or own a home? (Unless you are rich or your house worth a lot) I don't expect the government to support me paying my mortgage if I lost my job, I am more likely have to sell my house to pay for my care home fee in my retirement until I've nothing left then governments might step in, sometimes I do wonder if it is worth being so tight.

"I guess this is a result of all the council owned social housing being sold off though?"

Pretty much, yes.
Disastrous policy of selling off council housing, combined with population growth, has resulted in a massive shortfall of social housing.
So the vast majority of housing benefit / UC housing element goes to private landlords.
Government money making the rich richer.

YES And not just under RTB either.

www.theguardian.com/artanddesign/2020/may/22/a-kafkaesque-nightmare-the-survival-guide-helping-condemned-estates-beat-the-bulldozers

I'm not surprised the Tories got in if Mumsnet is indicative of the general population. No one is allowed to be better off and rise above difficult circumstances?!

It's not a race to the bottom

I have never voted and would never vote Tory in my life.
I still don't think people with savings above £16k should be able to claim means-tested benefits.
With the possible exception of excluding savings ring-fenced for a house purchase (for the person to live in, not let out!) as suggested by Babyroobs.

@LangClegsInSpace

Nobody cared how shit UC was when it only affected poor people.

If you think the worst thing wrong with UC is the savings limit then you don't know you're born.

exactly this!

The benefit system is such a minefield and I think that in general it should be more generous, but in its current state I don't think raising the savings threshold should be the number one priority.

Most of the benefit claimants that I come across don't have savings anywhere near that amount so it's not an issue.

Can homeowners claim universal credit? Is equity taken into account?

1. yes and 2) not if you're living in the house you own.

There are some circumstances where a home you're not living in is disregarded, eg if you're making genuine efforts to sell it (and the money you get for it is also disregarded for up to a year if it's earmarked for the purchase of another home), or if it's held in a discretionary trust. There are a few others, but I can't remember them off the top of my head.

@dancinguser

I agree, it’s a crappy system. Contributions based benefits should be more generous, to encourage people to work and pay in.

If it’s any help, my recruiter friends are saying the jobs market is starting to pick up now that confidence is coming back as things start to open up.

Also, a lot of commenters are predicting a 10-20% drop in house prices, so if you do have to dip into your savings, you may find that you don’t need as big a deposit as you would have needed ore Covid.

@Thisismytimetoshine. I'm about to buy my ex out of our house. I currently pay the full mortgage myself even though it's still technically half his and I can make the payments. You can buy a house for £75k here, so around £11k deposit (based on 85% LTV, my mortgage advisor says this is still doable) plus mortgage payments that are loads cheaper than renting. On UC if I rented I would get some paid but nothing for housing costs as an owner, even though long term I would claim less. The absence of housing element is not such a problem as the work allowance is more, it's the fact that if I needed a deposit I would find it hard to save on the new system despite buying a house being otherwise possible. I've been on TC since STBXH decided that the grass was greener and left me a single mum. 2 of my kids are autistic so I'm not really in a position to earn more right now and I'm really pleased I can get some help.