I may owe thousands in council tax arrears and I feel sick

[Littlespiderseverywhere]

So. I recently switched to UC from tax credits, and I declared my savings to them- about £7700. I knew that the limit for savings on tax credits was £16000, and on UC it's tapered from £6000.

I was also on housing benefit, and council tax benefit. I had made my initial claim for these about 15 years ago when I first moved into a house with baby DS1, and was very poor with no savings at all. Since then the only change of circumstances I had had to report to the council was moving house once.

The council have just emailed me and told me that DWP have informed them that my savings are over £6000, which is their cut off for council tax benefit. I had no bloody idea of this. I must have been told- or asked to declare any savings- 15 years ago when I first applied, but at the time I had nothing, and have no recollection of this.

My savings have been close to or over £6000 for 5-6 years!! I have always lived very frugally through fear of ending up without money again- for me, having an emergency nest egg has been top priority.

I'm so anxious and upset (hence posting at this time of night!). I'm autistic too, and I can feel the worry pushing me towards the edge of not being able to cope.

The council want to see all my bank statements for years back, and I intend to fully comply ASAP. But- as far as I can calculate- I think I will owe them about £6-7000.

Do you think I will be able to offer them a lump sum from my savings- say £3000- and set up a payment plan for the rest? I'm self employed and am not quite even hitting the minimum income floor for the hours I'm working (20 hours p/w- I have a fit note which doesn't really seem to be needed yet because I'm still on transitional protection).

I feel sick with anxiety that I could lose all the savings I've carefully scrimped and saved to build up. What if the car breaks down tomorrow?? I realise that I have only been functioning well all these years because I have been able to live within parameters of my own creation regarding hours worked and having enough money for mine and the kids' modest needs, and I'm terrified of the effect on the DC if I'm unable to remain stable and functioning for them.

https://www.moneyhelper.org.uk/en/contact-us

This is a good place to find help ^

This! Pay what you owe, I can’t believe you are looking for ways to wriggle out of it.

Don't be bullied into agreeing anything rash. Sit down and put all into an excel document of when it goes over the threshold. Take advice from your accountant and other agencies. And then negotiate hard with a payment plan you can afford.

I would be looking at the council tax payment month by month from the point you should have been paying based on your savings, and how the additional expenditure would have impacted your savings - eg after how many months of paying the additional cost would your savings theoretically have then reduced to the point where you became eligible again. I would use that in my negotiation for how much needs to be repaid.

Well, not really. Just going over it with a fine toothed comb to make sure the figure is accurate before paying. The council and dwp can be a bit of a blunt instrument. On mine they made incredibly basic errors regarding my tax code and personal allowance for tax purposes. Which affected the calculations very much.

No, but he will be paying for the NHS. Whether he uses it or not.

You seen curiously angry about this? Compared to all of the various abuses of state benefits that go on, someone claiming the short term, contributions based allowance they're entitled to seems an odd choice.

From memory it also keeps your 'stamp' up together which is important.

Think if it another way. For years you’ve had money that should have been paid to the council and that’s given you security and the ability to deal with any small dramas. Now you need to give them their money which luckily you have saved and move forwards to independent savings. You had a helping hand but you can walk by yourself.
Get the figure, pay it back, start saving for a rainy day again. It’s fine.

You have my sympathy, there is so much stuff to be on top of and you just don’t know what you don’t know. The only practical help I can provide is to say I think council tax arrears are only recoverable for six years so I think quite a bit is statute time barred. If they try to recover more, seek legal advice and prior to receiving that do not acknowledge you owe the council a debt.

Just placemarking to come back later. Basically, it's not you, it's UC. You have my sympathies.
The UC system is awful. I've had my first ever problems with the benefit system because of it and so has a friend. The staff genuinely can't cope with what the system wants, and contradict themselves, and at this rate we'll all be employed checking each others bank accounts.
The saving limits need to be increased with inflation too, they're sneakily keeping them low to keep people struggling when big bills or repairs come in.

She isn’t trying to wriggle out of it. She’s asking if she can repay part as a lump sum and part in instalments for reasons she’s already explained. Which is what a lot of people do and are allowed to do.

Op, if you were migrated from TC to UC, you should have had a year's transitional protection, does this apply in your case? Think it means that your savings are disregarded for 12 months. Either way, it sounds like their error.

This is very untrue, if he has 200k he won't get anything so he is either lying to you or has lied to them and not told them about the money.

I don’t have advice on your current situation OP, but some ways to feel safe without a big savings that friends do
-keep a large stock of food (rotate through so nothing goes out of date)
-stay up to date on repairs, filling glasses prescriptions etc
-buying next years’ clothes for kids

That way if you have an emergency other expenses are covered.

Surely the maximum you could reasonably owe would be the circa £1,600 that would have brought your savings below the cutoff (probably a lot less than 5 yrs worth)? . If you can gather the relevant bank.and savings statements you may be not penalised too heavily. Whilst a potential fine for late payment may be added, it would be perverse for you to pay massively more council tax than you would have if you'd realised, which is what would happen if they charged youin full.

What I mean is that if your council tax was £500 pa, and your savings were £7500, then after 3 years of paying council tax your savings would be £6000 and you'd be exempt again, so it would be perverse to charge your 6 years worth.

But that's only if the person making the decisions is rational.

You’re so far wrong on this it’s unreal.

JSA, which is being discussed, is an employment related benefit.

I have council tax arrears of over £5000 due to an administrative error, I pay back £80 a month. I probably could have paid back less if I’d asked to, they were very understanding of the fact I wouldn’t be able to pay it all at once and didn’t ever suggest I use my savings towards it.

Just a thought. Martin Lewis has recently made some progress for people who are late with council tax payments. Previously they had to pay the whole year if they were a month late (or something). See if he has anything that might at least fight your corner to pay it back in installments.

You need to check with your local authority with regard to the capital limits. For example, in some areas the capital limit was £16,000 but was lowered to £6000 on 1st April this year.

How are people supposed to do stuff like save to replace the work van, or do repairs on your property? We haven’t needed benefits in our adult lives, but have at times gone without to scrimp and save so we could do things like upgrade insulation, or carpet the house, to save money longer term.

It sounds as though OP should have had a modest annual holiday and not built up savings at all.

If two people receive the same amount in benefits which they are entitled to, and one works hard to save while the other is less careful about where she shops, it doesn’t seem right to penalise the saver.

In fact, it explains why the family on benefits over the road spends more on their kids than their employed neighbour does. No incentive to spend less.

Gosh. In defending OP’s right to benefits, I’m sounding like a benefit basher. Weird.

Definitely do this. Ask to speak to someone about a payment plan now so that you don't end up with a demand later.
Most council workers are sympathetic and just doing their jobs. They will understand that you weren't aware of the rules and won't be able to pay in one go.

It's jobseekers allowance I'm talking about not uc. It's not means tested. That's my point

They don't just give you the money though, you have to traipse to the JC, jump through some hoops, show you have applied for many jobs, etc. Personally I didn't bother as I had a redundancy payment and was going to have enough NI for my pension anyway. I just applied for the jobs that I wanted in my own time.

The issue is that each council has their own council tax scheme. So what will be true in one local authority won't be in another.
Usually on benefits you are allowed up to £16000 in savings before your claim stops altogether and a deduction in entitlement is made for savings between £6000 and £16000.
You may well have misunderstood the letter as yes you should tell them if savings are over £6000 but it doesn't mean you were not entitled at all.
Ring your council and clarify.
Don't panic I know it's easier said than done but if I'm correct then you will have had some entitlement so the overpayment shouldn't be everything you've received,and would only be applicable to periods when you were over £6000.
They would also work with you to make an arrangement for you to pay either way