Universal credit and capital

My wife and I were in receipt of universal credit for 12 months. She also receives PIP and my son is special needs and receives DLA.

My wife then inherited £25K in January 2020 - and we immediately informed UC and of course the benefit stopped.

The money has now just about ran out and although I am self employed I am like many people adversely affected by the pandemic and unable to generate any income.

Has anyone experience of the above scenario - will we be able to receive UC again or will they say that spending £25K in 10 months is unreasonable and refuse to allow the claim?

Will they ask for proof of where the money has been spent etc?


Deprivation of assets
You are not allowed to intentionally reduce your assets or savings to increase the amount you get in benefits. The Department of Work and Pensions (DWP) calls this deprivation of assets.

Deprivation of assets can include:

giving away money
transferring ownership of a property
buying possessions which are excluded from means testing, for example cars and jewellery.
If you have done any of these things before making a claim for benefits, the DWP will look at when you got rid of your savings and assets.

If it’s believed you might have deprived yourself of savings or assets, the DWP or your local council, might look at the evidence to decide if it was deliberate.

If at the time, you would not have been able to predict needing benefits, then it might not count as deprivation of assets. You may be asked to provide paperwork and receipts to back up the date and the reasons why you got rid of savings or assets.

If it’s decided you have deliberately deprived yourself of savings or assets, you will be treated as if you still had them. This is called notional capital.

The notional capital will be added to the assets and savings you do have and will affect the amount you will get in benefits.

PIP and DLA should not be effected.

If a couple were working, that is not an excessive amount to earn/spend.

Hi Bowlingbun

But is that how the DWP see it?

Or would they in fact say that you should only have spent at the same rate as you would if you were receiving benefits - eg: if you would have been entitled to £1,000 per month UC but for having the capital, then over 10 months you have “overspent” by £15,000?


I can’t answer that one properly, but DWP would have to prove that you were depriving yourself of capital in order to claim benefits again, to reject your claim.

I don’t think anyone here can fully answer your question. You could speak with Citizens Advice. I not sure if Carers UK could answer this either. know one can really know. What the DWP will view of your circumstances until you summit your application.


Information from the above link…

What is deprivation of capital?
If a person deliberately gets rid of capital in order to secure or increase their entitlement to a means-tested benefit, it may still affect their benefit. This is known as “deprivation of capital.” A person may be caught by this rule if, for example, they transfer the capital to another person, use it to buy a house, or (unless the benefit claimed is Universal Credit) they use it to pay off a debt which doesn’t need to be paid off immediately.

If a person is judged as having deliberately deprived themselves of capital, they are treated as still possessing it, and their benefit reduced or stopped accordingly. This is known as “notional capital.”

Where can people find further information?
Links to selected online sources are given below. The most comprehensive and accessible guide to the capital rules is the Child Poverty Action Group’s annual Welfare benefits and tax credits handbook.

The capital rules are however extremely complicated, with many potential pitfalls for claimants and advisers alike. The best advice may be to refer a person to a specialist welfare rights advice service such as a Citizens Advice.

I had the same issue last year,spent a similar amount as I usually would except bought my wife a mini for 5k had a lovely 3 weeks in Canada and held my breath when the DWP checked my bank statements. Much to my delight there was absolutely no problems with this despite the no nothing at the job center telling me I had deprived myself of capital and probably would receive no u.c.
I get deducted the formula amount for savings under 16k and above 6k now.
Good luck.

£25K spent since January? That is going some! :laughing:

I know a man with learning difficulties who lives with his very elderly Mum and has done all his life. He was on various benefits and had a big win on a scratchcard. His Mum made him report it to the Benefits Office and they stopped his benefits. He had to account for all he spent on stuff like all new domestic appliances for their house as theirs were ancient, new carpets and the house all decorated.