Savings when migrating to Universal Credit

[Asvan]

Hi

I just needed some advice please. I currently claim tax credits and have recently inherited 20k.

I informed tax credits who have said that it wont affect my claim but I've seen information online which says that under the universal credit system I would not be able to claim with this amount in savings.

I haven't had any information about migrating over to the universal credit system yet but I just wanted to know what will happen when I am migrated over? Will my claim just suddenly stop or will there be a grace period?

Also does anyone have any information on when the migration will take place?

Thanks.

Don't switch to UC until you're made to.

Savings over £16k mean you are not eligible for UC. Savings between £6k and £16k reduce your UC.

Spending your capital with the intention of getting (more) UC isn't allowed, and UC can do the calculations assuming you still have the money. There's no rules about what you can and can't spend savings on, the rule is about intent, and that's for a tribunal to judge in the event the DWP start making accusations.

Thanks for that.

I'm not looking to migrate until I have to, but there is no indication when this will be.

By no means am I trying to cheat the system. I just needed a rough idea as I'm hoping to use the money to put a deposit down for a house. The longer I have the better it will be.

The pilot for managed migration hasn't concluded yet (delayed due to COVID). So no one can answer your question. You could still be on tax credits until 2024 or later if there's further delays.

It's assumed there would be a grace period for capital but until nothings been decided yet.

The migration is due to be completed by 2024, it was supposed to be sooner but Covid delayed everything. I would say you probably have a couple of years, but it depends on your area and when it is due to start the migration. Your council might have information on this, I believe the rollout is being managed by local authorities.

From what I have read there will be a grace period during the migration where capital won’t have as much impact.

If you move over before the managed migration then having more than £16k in savings will mean you are t entitled to any help.

Thanks all.

I need to save for another year or two before I can even think of putting a deposit down for my own home.

The new Universal Credit system does seem pretty unfair for someone in my position. Almost like people are being penalised for saving/being given an inheritance.

Don't switch until you have to. I think it's when savings are over 16k it affects/stops things. I know someone who become disabled due to an accident. They reviewed compensation and now can't claim disability benefits because their compensation is seen as having savings. Which I guess it is... but it's wrong. Their compensation money is going down and down by the month having to pay for the stuff they need to live on!

www.moneyhelper.org.uk/en/benefits/problems-with-benefits/how-do-savings-and-lump-sum-pay-outs-affect-benefits

This might be useful.

This part -
How your savings are affected if you move from tax credits to Universal Credit
If you’re claiming tax credits and now have to claim Universal Credit because of a change in circumstances, for example, job loss or change, family circumstances or housing situation and you have over £16,000 in savings, you won’t usually qualify for Universal Credit.

Any savings you have between £6,000 and £16,000 will reduce the amount of Universal Credit you’ll get.

However, if you’re moving as part of managed migration, (this is when nothing has changed in your life but the DWP asks you to move across to Universal Credit) any savings you have over £16,000 will be disregarded for 12 months from when you move to Universal Credit. After 12 months, the normal rules apply.