Exact amount Universal Credit claimants can receive before payments STOPPED
NOT TO YOUR BENEFIT Exact amount Universal Credit claimants can receive before payments STOPPED
MILLIONS of households in the UK rely on Universal Credit to help with their day-to-day living costs.
However, many people may not be aware that certain life changes can have a huge impact on your eligibility for the benefit - and could lead to payments being reduced or even stopped altogether.
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Many people may not be aware that certain life changes can have a huge impact on your eligibility for Universal Credit
Credit: Alamy
If you receive a lump sum of money through inheritance, premium bonds, or a lottery or other cash prize, you may find yourself cut off from your benefits - even if you still need them going forward.
Other payments such as redundancy payouts, life insurance and pension lump sums, divorce settlements and compensation payouts can also affect your benefits.
This is because Universal Credit is one of several state benefits that are means tested, meaning they are based on how much money you have in savings and investments.
Which benefits are affected by savings?
HERE are all the benefits affected by savings Universal Credit
Pension Credit
Council Tax Support
Housing Benefit
Hargreaves Lansdown personal finance expert Sarah Coles says it's crucial to tell the Department for Work and Pensions (DWP) if you're expecting to receive a lump sum that may take you over the threshold.
'If your inheritance takes your total savings and investments to more than £6,000, it won't affect your eligibility for Universal Credit.
"If it takes you over £6,000 but to less than £16,000, it will mean you get less, but you will still be eligible for a payment. If it takes you over £16,000 you won't get any Universal Credit.
"If you're affected, it's key to tell the government as soon as possible, so you don't receive any payments you're not entitled to."
How much can I have in savings to claim Universal Credit?
According to gov.uk, the maximum amount of savings you can have to qualify for Universal Credit is £16,000.
Therefore, if you receive a sum of money that takes you over this threshold, you are likely to see your benefits stopped completely.
If you have £6,000 or less in your bank account, this will not affect your Universal Credit claim.
I lost 'everything' when UC stopped my £4.3k-month payment... now I've been sacked from my new job
If you have between £6,000 and £16,000, your payments will be reduced.
For every £250 you have between £6,000 and £16,000, your payments will decrease by £4.35.
It's also worth noting that if you live with a partner, their savings and investments will also be included in this limit.
However, anything in your child's name, such as children's savings accounts and Child Trust Funds, will not count.
What if I'm due to get inheritance?
If you're due to get inheritance, or expecting any change in your money, savings and investments, you must inform the DWP.
If you fail to tell the Government of any changes that may affect your benefits, you could end up overpaying your Universal Credit, and this extra money will be deducted from your future payments until it is repaid in full.
AJ Bell savings expert Charlene Young also stresses that you can't opt out of receiving inheritance in order to keep your benefits.
"The rules mean that refusing the inheritance cash or try to give it away to keep you under the limit won't work," she told The Sun.
You also cannot knowingly reduce your money, savings and investments. If the DWP decides you have deliberately reduced your money, your savings will be treated as though you still have it in your account.
You can also be prosecuted for fraud or fined for doing so, or for giving false information about your savings and investments.
However, if you have used your savings to pay off debt or buy essential items, this will not count as knowingly reducing your money.
What if I'm writing a will?
If you're planning on leaving inheritance to a loved one but are worried about them losing their benefits, there are steps you can take to prevent this.
Lawson-West Solicitors advises people to set up a trust for their inheritance.
"A discretionary trust can be created to protect funds passing directly to the person on benefits.
"It can also be used to provide for the person receiving benefits in other ways, such as providing them rent-free accommodation, that will not affect their benefits,"
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories
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