Join Date Sep 2007 Posts 2,235
how much savings are you allowed to have?
how much in savings can you have without it affecting benefits i think housing benefits up to 16,000??
Join Date Sep 2008 Posts 4,782
What you are talking about in the benefits system is referred to as 'thresholds'. Different Benefits have different thresholds, and it will depend whether the benefit you are claiming is means tested or not. You also need to know that the Benefit system refers to 'Capital', this need not be savings (see below.) The amount of Capital is what may affect your benefits.
"Capital is any savings, property or lump sum payments that the claimant and/or a partner have. The following are examples of what counts as capital:-
•savings in a bank or building society
•money in current and deposit bank and building society accounts
•national savings certificates
•capital and income bonds
•money held in a trust fund to which the claimant has access
•lump sum redundancy payments
•individual savings accounts (ISAs)
•life insurance policies
•unit trusts, stocks and shares
•money loaned to someone
•most property other than the claimant’s home."
I will give you some information on thresholds and benefits.
"Capital (savings and investments) does not in itself prevent a client from being entitled to CTC and WTC. In calculating CTC and WTC, a client's gross income but not her/his capital is taken into account. However, actual gross income from capital may be taken into account." (This means that if your savings pay you interest, then the interest may be included as income.)
Housing Benefit / Council Tax Benefit. (HB/CTB)
"To get Housing Benefit, you must have income and capital below a certain level. However, if you're getting certain benefits, different rules apply. Capital means savings, land, property or anything else which could provide you with income. If you have more than Ј16,000 in capital, you will not get any Housing Benefit, (unless you are getting the guarantee part of Pension Credit). If you have capital of over Ј6,000, you will be assumed to have some income from that capital. Most people aged 60 or over will be assumed to have some income from their capital if their capital is over Ј10,000.The current 'assumed income' is Ј1 a week for every Ј500 (or part of Ј500) of capital you have over Ј6,000." (If you have Ј8,000 for instance they will deduct Ј4 a week from your Housing Benefit.)
The above also applied to Council Tax Benefit.
"There are two types of JSA:-
•(CBJSA) contribution-based JSA which depends on a client's national insurance contribution record. It may be affected by earnings and occupational or personal pensions, but not by other income or capital; and
•(IBJSA) income-based JSA which is means-tested and dependent
on income and capital.
To claim income-based JSA you would need to have Capital of less than Ј16,000."
"Income support is a means-tested non-contributory benefit.
A claimant is not entitled to income support or income-based JSA if her/his capital exceeds Ј16,000. This amount is known as the capital limit.
If a claimant has capital of Ј6,000 or less, her/his capital is completely disregarded. It is not assumed that s/he receives any income from the capital.
If a claimant has capital of more than Ј6,000 and up to Ј16,000 inclusive, s/he is assumed to receive income from capital between the lower and upper limits. This is known as tariff income.
Deprivation of Capital - This is when you have deliberately spend your savings in order to claim or to continue claiming benefits. This can also be considered to be fraud.
If a claimant has used her/his capital to support her/himself, s/he is able to claim income support or income-based JSA once the amount of capital falls below the capital limit. However, if it is considered that the claimant has deliberately spent the capital in order to claim benefit, or spent it in circumstances where the Department for Work and Pensions could decide that one of the reasons for spending the capital was to claim income support or income-based JSA more quickly, s/he is treated as though s/he still has the capital. This is known as deprivation of capital.
There are some things you can use your money on that are not considered 'Deprivation of Capital', for instance if you pay off a debt that you are required by law to pay off immediately, however you should take advice.
Your Child's Capital is not added to yours and does not affect your benefit, with one exception - that applies to some people who have been gettign Income Support or Income Based JSA since before 6 April 2004. (This is because they may still get an amount for their children included in their IS or JSA).
If you are still entitled to amounts for children in your IS/IBJSA, you do not get any allowance or premium for a child if he/she has over Ј3,000 in capital, except a family premium.
A childs income and capital do not affect your HB or CTB, or ESA (Employment Support Allowance).
If your child has capital of Ј3,000 or less, any income is treated as yours, but may be disregarded. (You will need to see an advisor for information on what may be disregarded income.)
I am sorry if this seems confusing, but I have tried to put things as simply as possible, taking information from a variety of resources available to us at the Citizens Advice Bureau.
I hope this will help, and you are able to work through things. If you have any questions, you may be able to e-mail your local CAB (use their own website) and they should be able to answer a specific question.