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?

Why do people keep on about the state pension, it is not a benefit but a right if you have paid enough NI contributors. In other words worked all your life.
Or claimed benefits all your life, you still receive NI credits with out of work benefits. You don’t get a penny extra because those credits cane from working.

What? UC is unfair?! Well I never!

Sorry OP. Life stinks. Our savings got wiped out too. I'm starting again and stuck on UC.

It's funny how now people are noticing how unfair the poorest in our society are treated. It was fine until coronavirus hit.

This is why I think we should have a UBI. A floor, not a ceiling.

@ToothFairyNemesis

Why do people keep on about the state pension, it is not a benefit but a right if you have paid enough NI contributors. In other words worked all your life. Or claimed benefits all your life, you still receive NI credits with out of work benefits. You don’t get a penny extra because those credits cane from working.

Yes, it's plain wrong to suggest a person receiving the state pension must have worked, let alone done so all their life. That simply isn't a requirement.

@TooOldForThis67
Would shared ownership be an option at all? I know shared ownership properties are very few and far between. But if you could get one it'd be a good way to put your share of the equity to good use. Then you could still claim UC including the housing element for the rent.

Surely, once you've spent some of that money on bills, you'll be below the threshold and can claim?
And once back in work it won't take that long to build up again?

Or have I misunderstood how it works?

There have been several threads like this since the CV crisis began. The general consensus is no, you shouldn't be able to claim state benefits while ring fencing your savings.

I agree with you OP. I also agree with @DrCoconut. If you find yourself on UC then the system is designed to keep you there.

@AnotherEmma - Yes, a good idea, thank you. I'll look into it.

Uc is shit for people with a mortgage who suddenly find themselves made redundant or with a severely reduced income. This is why everyone should take mortgage protection insurance ( so many don't). You cannot get help from the government through the SMI ( support for mortgage interest) scheme until you have been on UC with No earnings at all for nine months by which time you've probably lost your home. At least if you rent, UC will give you a rent element although that may not cover your full rent but at least you get help. Those on UC with a mortgage will get the higher work element ( the amount of wages that is disregarded before wages reduce your total Uc amount), but obviously you have to be earning something to benefit for that. I fear there will be huge numbers of people in the coming months who have no mortgage protection and will lose their homes unless the government or mortgage lenders take more action to prevent widespread homelessness.

In my line of work I see a lot of pensioners who have never worked or worked very little, or came from another country ten years ago and have very little NI contributions. They get a reduced state pension and then depending on circumstances they get toped up with pension credit and if you get pension credit you get your rent paid by housing benefit also.

@Babyroobs

In my line of work I see a lot of pensioners who have never worked or worked very little, or came from another country ten years ago and have very little NI contributions. They get a reduced state pension and then depending on circumstances they get toped up with pension credit and if you get pension credit you get your rent paid by housing benefit also.

Well yes this is massive bone of contention for my grandmother. She’s worked since she was 14, paid the mortgage on her house ect.

She has to pay for her glasses and false teeth ( if they need to be fixed) She could do with going in an elderly residential place but she would have to sell her house to pay for it when she really wanted to pass it on to her sons.

Her best friend of 60 years has never worked, gets all of the above free and lives in a new build bungalow on an assisted accommodation.

Three times last year I got a phone call about that ‘bloody Marion’ going on another cruise

I don’t think we’re very fair to pensioners.

But back to the OP, I can see why she feels frustrated. Her best bet is for her husband to take any kind of work available just to patch them through

Carlotta . I agree. A lot of pensioners own their own homes and can be classed as property rich but have no spare cash to maintain them and end up taking equity release schemes, and then when they need care they end up funding it themselves.

YANBU

She could do with going in an elderly residential place but she would have to sell her house to pay for it when she really wanted to pass it on to her sons.
Isn't this how it works for everyone? . Why would the state agree to pay your residential living expenses whilst preserving your assets for your children to inherit?

@Thisismytimetoshine

She could do with going in an elderly residential place but she would have to sell her house to pay for it when she really wanted to pass it on to her sons. Isn't this how it works for everyone? . Why would the state agree to pay your residential living expenses whilst preserving your assets for your children to inherit?

Because she’s been paying in to the system for 74 years. She still is paying taxes. She isn’t rich. It’s an ex council house.

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. You are literately taxed to death if you work. Elderly people should get a break when they reach this stage of life.

But she will be offered free accommodation. She just won't be allowed to keep her assets as well. It's the same rule for all.

@Carlottacoffee you could be talking about my DGM right down to the regular phone calls about her friends long haul holidays. My DGM died a decade ago and her friend still lives the life of Riley. It bothers me.

@Babyroobs

Carlotta . I agree. A lot of pensioners own their own homes and can be classed as property rich but have no spare cash to maintain them and end up taking equity release schemes, and then when they need care they end up funding it themselves.

I know. It also gets very tricky when the person gets dementia and hasn’t instructed anyone to look after their affairs and they can’t sell their house for them to be put in a dementia home.

The person who didn't save has to go 5-6 weeks with no money though at all. Unless they have their last pay cheque. They will struggle a lot. You won't.

You only have to use your savings on food, bills etc until you are below 16k. Hardly going to take long if you've only saved just over that. One month then you can apply legally. I'd imagine you will find you'll still be using savings though because benefits aren't good. The other person with no savings would have to struggle on.

PrincessConsuelaVaginaHammock it IS a requirement for the contribution based STATE pension, pension credits which is what someone who hasn't accrued enough NI contribution/credits to get the new basic pension may be able to claim is an income based benefit which tops up their income to just below the state pension amount

@Thisismytimetoshine

But she will be offered free accommodation. She just won't be allowed to keep her assets as well. It's the same rule for all.

Well it’s not free accommodation then really is it as she will be paying for it

[quote Quietheart]@Carlottacoffee you could be talking about my DGM right down to the regular phone calls about her friends long haul holidays. My DGM died a decade ago and her friend still lives the life of Riley. It bothers me.[/quote]
Not fair is it?

KeepingPlain - People do have to wait 5 weeks for their first Uc payment but they can take an advance payment to tide them over. I know this isn't ideal as it does have to be paid back but just wanted to let people know that in case they are worrying about going 5 weeks with nothing. Most people being made redundant will hopefully have some last wages and maybe owed holiday pay or redundancy pay also. People need to be careful when they are making a new claim for Uc to make the claim a good few days / possibly a week after their last pay, they need to be absolutely sure that their last pay day has been reported to HMRC or those wages will be counted in their first assessment period and potentially wipe out any UC for that first month. This catches a lot of people out because they don't know how UC works and they will not be told that.

Carlottacoffee I could not agree with you more