Capital set aside to buy a property; treatment for UC

Hi all,

Just wanted to check; I keep coming across young UC claimants who have money set aside in savings accounts to buy a property.  As far as I can see from the regs, this is accessible capital and cannot be disregarded.

Anyone else found otherwise?  Has anything changed as a result of Covid?

Didn’t think so but wanted to check.

EKS

No, if the claimant has just determined in their own head that the money will be spent on a house purchase in the future, this will not mean that it is disregarded.

c.f. if the circumstances in sch 10, para 13 are met or if there were legal restrictions on the use the claimant could make of the money e.g. through trust law.

The only possible disregard in this context perhaps - if part of the monies held were a ‘grant’ made to you within the last 6 months with the sole purpose of purchase of a home.  (reg 13(c), sch 10, UC regs 2013).

Sweet and Maxwell commentary says there doesn’t seem to be any limitation on the source of the grant.  So if the money or part of the money given to you from parents maybe this would count as a grant for instance?

EKS

In that specific situation you could probably seek to argue that it’s a grant if it were clearly defined as being only for the purchase of a property. Welf types always like to argue that these sorts of arrangements amount to Quistclose trusts so that the money must be returned to the parent if it is not applied towards its intended purpose (plenty of commentary on this in vol. 2 of Sweet and Maxwell). There are issues in proving either on the facts because there is unlikely to be much in the way of clear evidence that the money was not just an unencumbered gift.

Many thanks Eliot - unfortunately volume 2 was not one that I grabbed to being home before lockdown!