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.

Absolute rubbish, I was on jsa last year and half the time I didn't even have to go to the job center due to strikes so it was a 2 min phone call every fortnight. After the strikes finished it was back to in person but again 2 min chat then sign here and out

I would pay from your savings OP to get it done and dusted, hopefully.

It is still savings which will be counted.

this

op has saved incase van goes wrong or as se and has a lean month

others on benefits May spend it all on cigs holidays huge TVs etx (know that’s typical examples lol)

I don’t think someone should be peniised for saving the money they get

I know others will say well if they have £5k they don’t their monthly uc of £ …….

@Littlespiderseverywhere talk to council office direct. They will sort out a payment plan. I would pay a lump sum taking you under the £6k you need

or as someone said start adding savings to your dc accounts

I’m pretty sure if you’re the adult on the account it counts towards your savings too. It would need to be in another adults name for your child. I’m currently the adult on my son’s account. I have 2.5k in my savings for a deposit on a rental. If I were to have eg 4K in my sons account that would put me over the savings threshold.

I’ll never be able to save that kind of money for him so I don’t need to panic, but it’s definitely something to keep in mind x

His taxes will be supporting lots of people. The system is possibly too complex to change it for the very few high earners who become unemployed. Back in work whatever benefits he got will have been repaid very quickly.

I understand the OP’s reason for a savings buffer. Self employment isn’t like having a regular wage or salary. As others have said some people who receive means tested benefits actually do save some of it.

I hope @Littlespiderseverywhere it’s sorted out soon.

It does, sadly. Some have a threshold of £16,000, some £10,000, some will taper above £6000. Seems that mine is one of the more hard-core. They are able to set the thresholds at their own discretion. Which of course can catch a lot of people out if moving from area to area, or getting advice from people in different areas.

It would not. Seems you don't know much about autism and overwhelm.

Its hard, but don't panic

Yes you certainly can set up a special payment arrangement - though they are unlikely to want toad will that for the entire amount and are likely to push you to pay as much as possible. Don't be afraid to push back, also make sure you get your 25% discount as a single person on past tax demands

I would if I was in your position - ask what date they introduced the £6000 saving s amount for council tax relief? How did they notify present claimants getting council tax relief about this change? Why haven't they required to see your bank and savings accounts over the last 5/6 years, as yes you have a duty to and it is your responsibility to inform them of a change - but you hadn't had a change - they had change the rules. They also have a duty not to let you get into debt

I know my council change the rules on council tax relief and savings in approximately 2019 - as it was when HB was stopped for new claimants an councils could set their own parameters on savings - rather than it being in line with Housing benefit at £16000

@Littlespiderseverywherewell, yes I only know what you posted and you said you are concerned regarding financial security yet only work part time. surely burn out can be caused by money worries ?

Also no need for such a response, I put question marks to indicate it was a suggestion. Obviously I don’t know your specific presentation so all I had was your op. No need op.

No, for some reason there's no transitional protection on my savings, and I'm already having money deducted from my UC because they're over the threshold. But my issue is with council tax, so transitional protection wouldn't be relevant to that.

You have £6000 in savings so just use all of it to pay off the money you owe. All of that money isn’t yours because you were wrongly sent it and you didn’t report it (I don’t believe that you didn’t know about the cut off). Your self-employed job doesn’t seem to bring in much money so you should look for alternative employment.

Everyone needs to have some savings even those on benefits. OP might have taken years to save that What if you need to buy replacement white goods or a car? The threshold is actually too low. £6k is obviously a lot of money but I would increase it before they start taking it off your entitlement.

It does, sadly. Some have a threshold of £16,000, some £10,000, some will taper above £6000. Seems that mine is one of the more hard-core

this will have been decided by the councillors in your area - they discuss and vote as to what it should be set as - that is why it is different area to area in some ways. Some councils will charge double council tax on second homes from 2 years and allow one month grace between rentals etc - other councils will have different rules, but all voted on by the callers in that area

The rules did change around 2019 and tbh could easily have been missed. OP is obviously anxious abut the situation, that can be seen from the thread. So why would she deliberately know that she was claiming something she wasn't entitled to when it would have been easier to spend the savings over £6000 - which she could have done had she known...

I’ve seen so many comments from you @Renabrook during the course of the evening/night on different posts and not once have you offered anything useful or constructive - it’s all just snarky comments and you criticising people. It’s sad. Find a better use of your time x

That means your business isn’t viable. Get a job.
The point of the minimum income floor is to stop people “being self employed” when they’re just working a handful of hours and earning pocket money, and then being topped up fully by tax credits. You could actually spend a decade not actually working, just doing a few craft fairs a month and saying they didn’t go well, and tax credits would just pay out as much as necessary to top you up.
UC have stopped that; you need to earn minimum wage equivalent, they won’t top you up above that. If you’re not then your business isn’t a proper job so get a proper job.

You only have savings because you haven’t paid council tax, so you’re not actually losing anything because you’d have spent it anyway on the council tax. Just pay it off. Get a job and then you can save again.

It's just a mistake, it's not your fault because it wasn't intentional. I'd ring them up to discuss it. Also you're allowed to ask for an affordable repayment plan e.g. £5 per week. I did it when benefits wrote to me about an over payment (their mistake!)

I would get some local help op. Either with a call to your CAB or contact a local advice charity. Your situation is complicated by transitioning to UC from TC and by being self-employed so you need support with calculating what you owe and a reasonable repayment plan based on your circumstances not what the MN collective thinks is right!

Lots of people pt employed and in tax credits did not have to pay much Council tax, but find they have to pay once they are on UC. Councils can set their own rules for working age CT benefits and have been less generous on how they calculate for people on UC and working than they were for the same people under tax credits - I work for CAB and have encountered many families caught out by this. You will need support in making sure you have the right work committment under UC as well as if you are autistic you should check if your MIF will be based on earning minimum wage for full-time hours or if it can be adjusted to part-time hours so you are less likely to be caught out by the MIF when it is applied.

Good luck op, you are in a better position you have some savings so you can get this sorted!

The affordability isn't going to be applicable when the Op has the money in savings to pay the tax debt. It's a tax debt and not a benefit debt - as it council tax relief.

I know with my local council it was usually £25 per week they were looking for as a minimum on council tax arrears and I believe that is across the country as a starting point for collecting tax arrears

You say if you use savings to pay it you won’t have money for emergencies, well this might sound blunt but that’s the reality for most people isn’t it and it’s just…life?! I work full time, no benefits, not able to save because, life, bills etc so if my car packed up, I’d be in dire straits but it’s the reality for many people that don’t receive benefits
So whining about what if, but this or that, sorry, it’s just tough 🤷‍♀️
As a single mum in the past I received tax credits and no way could I save like you have, I’ll likely get flamed for this but there’s something wrong when someone on benefits can save thousands…as I say not benefit bashing because I have received in the past, I’d love to be able to save but it’s just not possible and that seems off to me

£5 per week would take over 20 years to pay back. The council aren't going to agree to that

That is your opinion but thousands of benefit claimants will legitimately have savings and the thresholds are set by the government and people can have up to £16000 in savings in some instances - if you disagree strongly then contact your MP to suggest change. Benefit claimants are not doing anything wrong by having savings that are legally within the parameters.

This.

I imagine they will do a calculation to add it to your council tax bill going forward (it's what they did to a friend in the same position, but that may depend on the council).

however, as others have pointed out. You might be better off paying a chunk off to take you'd savings under the threshold.

i totally understand how easy a mistake it was to make. How important your savings are (especially when SE) for things like van repairs etc.

just ignore unhelpful comments & TRY not to stress. They won't demand you hand over all your savings or whatever 🤗