Claimants of Universal Credit have been warned as the Department for Work and Pensions (DWP) is gearing up to conduct bank account checks when balances reach a mere £6,000. Under the DWP’s rules, to qualify for Universal Credit payments, an individual or couple must not possess over £16,000 in savings.
The official guidance outlines: “To claim Universal Credit, you must usually have no more than £16,000 in money, savings and investments as a single claimant or if you are living with a partner.” It explains that having between £6,000 and £16,000 in savings and investments will lead to scaled-down Universal Credit payments.
It specifies: “If you have money, savings and investments between £6,000 and £16,000, your Universal Credit payments will be reduced. Your payments will be reduced by £4.35 for every £250 you have between £6,000 and £16,000. Another £4.35 is taken off for any remaining amount that is not a complete £250.”
Secretary of State for Work and Pensions, Liz Kendall, said: “We are turning off the tap to criminals who cheat the system and steal law-abiding taxpayers’ money.
“This means greater consequences for fraudsters who cheat and evade the system, including as a last resort in the most serious cases removing their driving licence.”
She also highlighted new protective measures, saying: “Backed up by new and important safeguards including reporting mechanisms and independent oversight to ensure the powers are used proportionately and safely.”
For those with capital between £6,000 and £16,000, such amounts are treated as though they yield a monthly income of £4.35 for each £250 or part of £250, even if there is no actual income generated, reports Birmingham Live.
If you have £6,300 in a savings account, £6,000 of it will be disregarded and the remaining £300 will be considered as providing you with a monthly income of £8.70.
This amount is then subtracted from your monthly Universal Credit payment.
For those receiving income-based JSA, income-related ESA, Income Support and Housing Benefit, £1 per week is deducted from their benefits for every £250, or part of £250, of savings over £6,000. These benefits are typically paid into accounts fortnightly.
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