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.

The same? The same thing?

I don't think OP is in a position to tell them anything of the sort. Let them work it out OP and luckily you have the money to pay it back a d so hopefully avoid any criminal charges. Bear in mind too that you'd be entitled to single person discount so that might lower it further.

Lucky you're not reaching our for that reassurance as you wouldn't get it 😂
Pleased to know I'm a CF whilst my taxes support you to work part time and have the government pay for your bills though 👍 I'd much rather the money go to someone like OP than a spiteful hypocrit though!

Right now it's a scary situation because you are looking at various unknown variables. You don't know how much you will owe or the conditions for paying it back. Deep breaths, gather the information, keep trying with cab and try to get to speak with someone. Keep in contact with the council. Write out some notes about the key dates and figures ahead of the phone call with the cab. I can find these thing's quite stressful but sitting for a few minutes and getting it straight in my head before making to phone call can make a difference.

One thing you can do today is to set up the payment for the council tax going forward.
There will be a plan going forward. You have done great to save what you have and to build in some financial resilience. Ok some of it has come from this mistake with the council tax it won't be long before you know where you stand, what the plan is moving forward and what money you have to account for.

I don't need reassurance.
I pay my bills and don't need to reach out to strangers for sympathy when I mess up.

The difference is I take responsibility for my actions and reach out people if needed who can actually help and offer support if required.

You are blinkered and so blind to the OP bragging aboutbher savings while failing to pay her priority bill for years. Your moral compass on this situation tells me all I need to know. Entitled. Yes you are a CF looking gor an easy way out and indulging the OP by enabling her sob story.

Enablers are as bad as the enabled.

DM me if you want

What Authority do you live in?

OK

1. Income doesnt become capital until the date of the next payment when anything unspent is capital So I am paid on the 28th of the month, if I am paid £1K and then spend £999 only the £1 left on the 28th of the next month is capital
2. The schemes are local as far as an authority known to me goes they dont create overpayments for previous financial years
3. There is then discretionary council tax relief which the authority MUST consider if you ask, I cant think of the legislation off the top of my head
4. Depending on the scheme rules they may also have 'diminishing notional capital'
5. Oh and have a look at this report

https://www.resolutionfoundation.org/publications/saving-penalties/

But I suggest that IF they insist on going after the money get specialist advice from Citizens Advice and/or your local councillor

This is not the end of the world OP. Take a breath.

Ring the council. Apologise. Say you’re autistic and you didn’t know you were doing the wrong thing. Send the statements. Give them, say £2k to bring you well under the savings threshold. For the remainder ask for a sensible repayment plan.

Then forget about it. Done.

You don't pay your bills, you claim benefits, the government pays your bills. If you want to judge others then at least get a full time job and support yourself.

Yes, I said 'the same' then ended my post.

They aren’t going to ask for it all at once. They’ll set up a repayment amount. The savings limit is poorly done IMO. A single person with £500 rent and bills has the same saving limit as a single person with kids and £2.5k rent and bills. You mentioned you’re autistic - if you get any disability allowance/premium then some councils have a higher limit for savings and still claiming council tax support.

Of course she is. They are asking her for evidence, she needs to make sure that the evidence she provides is exactly correct rather than just bung a load of bank statements at them.

Hope you are ok MadinMarch. How scary.

If 1 year of council tax would have brought your savings under the savings limit, Surely you would only need to pay one year, not wipe out all of your savings?

I owed about £2000 on my council tax a few years ago as my student status had not been removed, after I graduated and I hadn't noticed. This went on for a few years. I know this is a different scenario but in the end they wrote it off. I should have notified them I had graduated (I thought telling them the duration of course would suffice) but they did not review my case.

I've got a nasty feeling that's not how it works 😬. So, having an extra £1000-2000 sitting in my savings for 5-6 years will probably end up costing me about £6000. I hope I'm wrong, but I doubt it.

I think it's similar to the carers' allowance overpayment scandal, if you're familiar with that. Carers who also worked going a few pence over the threshold for several years without being informed or realising they were doing anything wrong, suddenly being landed with bills for thousands.

I'm sorry this has happened to you @Littlespiderseverywhere I think if you can pay half off - and then the rest in instalments, that would be a good idea (I assume it's 6 grand you owe as you said you may pay 3 grand and then the rest in instalments...?)

This is so shit isn't it? I know people will disagree with me, but I don't think anyone should have ANY benefits affected unless they have more than £20,000 in their savings account. £6,000 is where you start to get hit, and yet it's not masses of money, but is a good buffer in case the car packs up, or the cooker or the washing machine, or you get a massive vet bill, or you are off work for several months (and are hourly paid staff who only gets SSP.)

And even £16,000 is a reasonable amount to have in savings and still claim benefits, because quite honestly, with how expensive everything is and how fragile the economy is, you NEED a decent buffer. No-one should be refused benefits (and they shouldn't be affected or cut at all,) if they have less than £20,000 in savings. JMHO.

Honestly, with shit like what's happened to you, no wonder some people stay on benefits when they've got kids. I have heard sooooooooo many stories like this. Often linked to overpayment of tax credits. Always from people who worked part time, and have kids. Out of the blue, after 3-5 years of claiming them, they get a demand for a £2000 to £4000 'overpayment,' because their wages went up 3.5% from £145 a week to £150 or something! And they didn't declare it immediately! 🙄

The overpayment is always way way more than the small payrise was. I never know how they work it out. The person has had like an extra hundred pounds over the course of the year, but the overpayment ends up as 2 or 3 grand. Totally disproportionate to what the extra money they had was...

Best wishes. I hope it all turns out OK. Feeling for you here. Same shit has happened to us in the past - twice - with fecking tax credits. Got landed with a bill for £2000 about 6 months after we stopped claiming it (when our youngest hit 18 and went to Uni.)

No idea why we owed it as I always gave the accurate salaries we had earned, and yet we still owed £2000. I tried to ask why but was always asked to refer to the paperwork. It never made sense and I never knew why we owed it. We paid it though. We had no choice.

We started a standing order to pay it off at £50 a month. They kept taking payments, but on FOUR different occasions (over the first year) we had snotty letters from collection agencies threatening to put us in court for not paying. I rang the tax credits line numerous times, and just kept getting told 'oh it's just an oversight. Ignore it..' How the F can I ignore it? I am being threatened with legal action! FFS!

Rant over. Best wishes @Littlespiderseverywhere

If they requested bank statements then that's what she needs to provide.

No, she doesn’t. She literally has to “bung a lot of statements at them”. That is what she agreed to. She can’t “get them in order”, and any accountant isn’t going to be able to help, because the business isn’t seen as a separate entity for benefits purposes, even if it’s a limited company.

Forgot to say, the other time we got hit with an overpayment of tax credits was when we had been claiming it for about 3 years. They issued an overpayment letter for £1333, and we have NO idea why or how this overpayment came about, as we had always declared both yearly incomes. The overpayment letter just popped up around September one year for an overpayment from 2 years before! They reduced our tax credits allowance to retrieve it, and then several years later, we somehow owed another 2 grand! Batshit.

People can still claim New style ( contributions based ) JSA becuase this is non means tested. It's based on NI contributions paid and is only £92 a week for six months. Hardly anything compared to what a lot of benefit claimants get for years on end !

I’m really sorry to hear op. Thats really shit! A friend got paid too much of something benefit related and had to pay it back. As far as I know it was a very reasonable payment plan (something like £10 a month). Hopefully they can do the same for you!

Funnily enough, I've never ever had a problem with tax credits. All my issues have been with the council over the years. I've regularly had letters from them saying they've reduced or even stopped my housing benefit because I've received too much in tax credits (how???). This has always been because HMRC have paid me a percentage of my childcare, added it to my tax credits, and informed the council of the total amount of tax credits received. So I'd get another green- edged letter for something completely allowable that I'd already declared!!

I'm currently on hold to Citizen's Advice. I called their specialist debt line several times, no advisors available, got automatically transferred to National Debtline and got to speak to a person...who said he couldn't help me because I'm s/e and to talk to Business Debtline. I said "No way, last time I tried that I was on hold for 40 minutes until I couldn't take it any more!" So I'm on hold to the main Citizen's Advice line, in the vain hopes that I'll get to speak to an advisor and maybe make an appointment. I want to go down to the workshop and actually do some fucking work, but there's no signal down there....😬 There's no email option for Citizen's Advice...there is some kind of weird text option, I guess I'll give that a try....

OK, "someone from the debt team will contact you shortly". Apparently. Probably by phone either while I'm out of signal range or sorting the DC out this evening 😪

Oh, and I sent my bank statements off to the council. Told them I was vulnerable because autism, and asked politely when the rules for savings limits changed, and if they had informed existing claimants at that point.

I mean, they could easily have added a line to those 15 page missives that they send out regularly that 90% of people skim read 🤷‍♀️