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Forum Home  →  Discussion  →  Covid-19 issues  →  Thread

UC capital rules ‘easements’ - second properties

SarahBatty
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Durham Welfare Rights

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Anyone seen any official guidance about ‘easements’ being applied to capital rules where people are claiming UC and have second properties?

My colleague had a case last week where a DM had decided to ignore the value.  He enquired with DWP managers who stated that DMs had been advised they can apply ‘easements’ due to Corona situation. 

Another adviser has also seen some cases.

Gareth Morgan
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CEO, Ferret, Cardiff

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You might argue that such properties have very little value at the moment and, therefore, should be ignored.

Paul_Treloar_AgeUK
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Information and advice resources - Age UK

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They obviously agree with Alex Valuation of property during coronavirus crisis

SarahBatty
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Durham Welfare Rights

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Thanks Paul had not seen this other discussion

Mkfiftyeight
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Benefit Advisor, HARC East Sussex

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Parliamentary Question on 29 April. Should be an easy one to ranswer, but a holding reply was issued. Maybe there will be something, but then again I am not going to hold my breath

Asked by Lloyd Russell-Moyle(Brighton, Kemptown)[N]Asked on: 29 April 2020

Department for Work and PensionsUniversal Credit41570

To ask the Secretary of State for Work and Pensions, if her Department will make an assessment of the potential merits of removing the £16,000 savings threshold for eligibility for universal credit.

AAnswered by: Will QuinceAnswered on: 05 May 2020
The Department for Work and Pensions has indicated that it will not be possible to answer this question within the usual time period. An answer is being prepared and will be provided as soon as it is available.

Gareth Morgan
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CEO, Ferret, Cardiff

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The capital threshold has a big effect on the TC recipients being turned down for UC and then losing TC.  I imagine that the ‘thinking’ is linked to that.

AlexJ
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Trafford Welfare Rights

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With regard to the issue that Gareth mentions, it’s worth looking at this thread for a potential argument to get clients back onto tax credits: https://www.rightsnet.org.uk/forums/viewthread/16002/

Mkfiftyeight
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Benefit Advisor, HARC East Sussex

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Update - PQ now answered in full (see below) - no easement of £16,000 capital rule in UC

Department for Work and PensionsUniversal Credit41570
To ask the Secretary of State for Work and Pensions, if her Department will make an assessment of the potential merits of removing the £16,000 savings threshold for eligibility for universal credit.
AAnswered by: Will QuinceAnswered on: 07 May 2020
Holding answer received on 05 May 2020
A key principle of UC is that it supports people who do not have assets available to meet their basic needs. While it is important to protect the incentive to save for claimants on low earnings, people with substantial capital can take responsibility for their own support. This is to ensure that we can maintain our focus on getting money to citizens who need it and safeguarding the most vulnerable.

If capital exceeds £16,000 there will be no entitlement to UC, unless the capital can be disregarded, for example personal injury compensation payments. Capital above £6,000 will reduce the amount of UC paid by £4.35 per month for every £250 of capital or part thereof.

If someone has money in their account that is to be used for business purposes, for example for paying tax, it will not be counted towards their capital, but they may be asked to prove that the money is for business purposes. People should make clear in their application the savings that are business assets, and note it in their online journal.

suesc
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Benefits case worker Citizens Advice North & West Kent

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Does anyone have an update with regards to this and evidence of situations where a DM has been prepared to accept that the effect of COVID19 has severely impacted on the market value of a second property and the rent generated and have been prepared to disregard the capital value of the second property. Are there particular factors that a DM will take into consideration – eg that the property remains unlet because it cannot attract tenants or that it is let but the tenants are struggling to pay the rent

SarahBatty
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A case I was dealing with the DM decided at the end of August 2020 to start treating the second property as capital again. On the basis that outside of lockdown, the property now has a potential sale value. A devastating decision in this case because they had previously been on TC and had the property disregarded, but had moved to UC in error.