Universal credit - wages classed as capital

[OUB1974]

I just wanted to check something as it didn't seem quite right to me.

We work but get a small amount of universal credit. Our assessment period ends on our payday.

We have some savings but are under the 6k limit. However, when updating savings in my account it asks for balances for current accounts, which takes us over 6k due to wages.

An example (not actual figures): 4k in savings. Wages of 1.5k each per month (me and dh). Assessment period ends on payday so balances are reported before the bills go out. So they take 7k as our savings/capital.

Is this right? If our assessment period was a day earlier than payday the figure would be such a lot less and we'd have no deductions. The wages have already been taken off our payment (correctly) as obviously they reduce the amount due quite substantially.

There are rules about how income changes to capital; if you've been paid salary late in your AP it's not capital.

Income becomes capital at the end of the AP after the one in which it was received.

Have you asked them about this? I would put the question to them, illustrated by numbers, to show the impact of the current situation vs your assessment period ending one day earlier and see if it can be changed, otherwise they're counting money as savings when most of it isn't, because its needed for your living costs before your next pay day.

I have this exact problem too. I was told at a review that I was over declaring and ended up with some money back. However when I queried how to report correctly going forwards they weren't able to answer me! I've asked in my journal and I have it in writing that you are only supposed to declare capital minus any earnings in that assessment period. So that is what I am doing, even though their system asks you for the exact amount in your account in pounds and pence, I am deducting my earnings for that AP. I have also asked them to raise this issue as it is misleading. I would ask the question in your journal to cover yourself.

Id pay of my council tax in full for the year 26/27 and that way reduced my savings, if you rent from the council I would overpay the rent by a month or two and again reduce savings - neither of these are considered deprivation of savings

Thats a good idea, also are there any other bills you're paying monthly that you could pay annually in advance eg water, home and car insurance. Also increase your gas and electricity DD to more than it needs to be.

You could even convert your emergency fund to vouchers while you're trying to deal with the problem, sounds mad but sometimes you've got to get creative with 'computer says no'. Each time you visit the supermarket buy a £50 gift card for that supermarket and keep it somewhere safe, with an online back up if possible. Then if you need to spend on something out of the ordinary, use voucher for your groceries to free up money for something else without actual money adding to your savings. Or if you buy thing's like clothes and shoes at the supermarket use the vouchers for those.

If you use PayPal to receive money keep the money in your PayPal account, don't withdraw it and spend directly from there. Also if you use Quidco or similar take the payout as supermarket vouchers not cash, yiu get more that way anyway.

Most of these suggestions are not allowed. Capital is capital, however it is accrued, and PayPal is a bank account so a positive balance must be declared.

@OUB1974 it is the system that's misleading. The income doesn't become capital until the end of the AP after it is received. So if your AP ends on 28th December and you are paid on 28th December, any part of your wages that you haven't spent become capital on 28th January.

I agree that the reporting system is wrong.

Overpaying rent in council accommodation is allowed, as is paying council tax annually or increasing utilities bill payments

This sounds right, I would declare the amount in your account the day before you are paid, that is what you have left after bills and whatever left of those payments that adds to your capital is taken into account the next time round.

Which part of the ADM states that?

Will depend on intent I think.

Rent up front can be an issue irrespective of whether it affects capital limit.

Thank for the replies, interesting that you've had the same issue @peachsnapz . It's only reduced it a small amount and it's the accuracy I'm worried about rather than the money. We're having a review at the moment so I need to get them to understand before they finish it as using our current account balance means we regularly went over the 6k.

I'm trying to get them to tell me what to do but they're being very disingenuous about it and keep saying if I've declared incorrectly then they can alter it. But they won't acknowledge that the phrasing of their question "what is the balance of your current account", leads to incorrect deductions if answered correctly. I want them to tell me to take my wages off it (which I know is the correct answer) in writing!

Would the simplest thing not be to open a savings account and deposit your savings into that? It would still have to be declared as savings but it would make it much clearer what is savings (capital - savings account) and what is income (wages - current account). And your current account wouldn't be going over the limit every month.

When you report the balances you need to explain that c£3k is earnings in the current/previous AP and therefore not capital.

If they still insist on treating it as capital then ask for a Mandatory Reconsideration.

We do have a savings account, and all of our savings are in it.

The problem is that when I go to update our savings in our claim, the first question is "how much money is in your current account?". It's specifically asking about all 3 of our current accounts (mine, dh and our joint one for bills) and says to put how much is in it in £ and p. Then when I answer the question they add this figure onto the savings.

It's the question that's the problem. I can see that our wages need to be taken off before answering the question, but I want them to tell me to do that in writing so that I can justify why I've answered a different question to the one they've asked!

This sounds like a 'computer says no' problem.

When they brought in UC they said one of the aims was to encourage recipients to budget at least monthly and also to the medium term, hence the Help to Save account.

It is directly against that, and any budgeting advice to include money that you know is going to be spent in the next few weeks on essentials as capital 'savings'. Especially as any couple who work and have modest savings are likely to often have close to £6k in wages, UC and savings quite often seeing as 2 x NMW is nearly £3.5k alone. The UC for rent and childcare could add quite a lot to that where applicable.

It's also high time that the capital limits of £6k/£16k were reviewed as they've been the same since the start of UC which has to be at least a decade or two.

Of course, you need to get an intelligent human to actually understand the above and take action. Which may or may not be possible.

@OUB1974 I think you're making this more complicated then it needs to be.

Try and be proactive with them. Submit the bank balances as requested but put a note on your Journal to explain that £3,500 of this is earnings payed in the current/previous assessment period. Refer to the ADM Guidance on Capital para 1050 and tell them this is not capital but current month's earnings and will be spent on bills during the AP.

If they continue to treat it as Capital then consider the Mandatory Reconsideration route.

I did similar with my DD's UC account (I'm her appointee). I declared the balances, then stated 'DD1 received UC on <date>, PIP on <date>, and the Xmas bonus on <date>. They still made a savings deduction reflecting the whole amount. So the jobcentre raised is with the case manager. The case manager added a note to the journal saying 'Don't declare the UC and the PIP or you will have too much deducted.'

The system asks for the balance. The journal has details of all the deductions that should be made from it. They don't action that information.

So, we are left with a system where the only way to get the right amount of UC is to calculate the deductions and write the wrong balance on the system. It shouldn't be so.

I was told to disregard what I had got in assesment period as it wasn’t savings until the ap after I had review and how wrong was I had so many issues! They wouldn’t back down and gave me a £450 overpayment and £50 fine for not declaring correctly, now I add up both bank balances in both my accounts and give them the total at end of AP like they advised

This is what is worrying me. They've now told me in writing to deduct my wages before I put the figures in. Which I will, but I'm worried they'll say the same and that I've misdeclared. It's such a daft system, I don't want to do it myself in case they say I've done it wrong.

We're mid review at the moment- we've never gone over 6k, but I'm expecting them to say we have because of this. I'm not so worried about them saying there's been an overpayment (even though there hasn't, as it wouldn't be much anyway), but I'm very nervous about them thinking I've intentionally given the wrong figures when I haven't.

Wish I could earn a few extra pounds a month and cancel the claim entirely!

This is absolutely mad. They've obviously twigged that some people with lots of savings will deliberately transfer them to their current account, so that they can declare the balance of their savings accounts as under the limit whilst completely ignoring the thousands that live permanently in their current account... but in doing this, they seem to be disregarding the actual purpose of a current account, which will be used by the vast majority of people as per its purpose.

It goes against all common sense, but it seems that the only way to thwart this ridiculousness might be to withdraw a decent chunk of cash on the day before pay day and then pay in cash for all of your shopping etc. throughout the month.

Not that it's a wise thing to do at all, to have a lot of cash on you; but if they're only asking what you have in your various bank accounts and not what you have in your purse/wallet or under the mattress, that would theoretically resolve this stupid issue that somebody stupid in officialdom hasn't considered.

What do they check in these reviews

They looking for undeclared capital/inheritance, sums of money going into your account which may show your working/combined income not declaring , working without declaring, signs to say you’re living with someone when claiming single, also what you spend your money on and ask you about certain transactions (even though this shouldn’t be allowed)

I cancelled my claim mid review after a change of 2 agents cause they left my circumstances changed which meant I no longer qualified as my partner moved in. You can’t win if your between 6k - 7k they make you go in the jobcentre if you drop below the 6k to see what you’ve spent money on and if they deem it ok. If I was still claiming I would take the hit on deductions as all of the different agents seem to have different rules in regards to capital which Isn’t helpful.