Do the DWP have an opinion on what you spend your benefit money on?

[bigissue]

I am curious, I know that if they DWP suspect you of fraud they can look at your bank statements or if they are doing a spot check on you they will ask to see a bank statement.

 

While I am not currently in a situation where this affects me I am still curious as to how they view how you spend your benefit money? I live with family and so I give my family the main chunk of my benefit in cash to cover the bulk of my food and cortribution to bills I don't get any HB etc. The small about left is spent on some food shopping, some interent shopping such as books, dvd rentals etc and the odd bit of cash I lift if I am out.

 

I wonder if my spending habits i.e. any spending on myself such as buying books etc would be considered "wrong" by the DWP?

[BRIGADIER2JCS]

No, generally speaking benefits are the minimum amount the Government states you need to live on.

[MIKEY DABODEE]

Think you are worrying about nothing..

 

How you spend your benefit is your own personal choice.

 

DWP would not be interested at all, why would they be?

 

Sounds like you manage your money well to be fair and you have got every thing covered.......

[bigissue]

Thank you for your replies, I suppose they want to see bank statements to see if you have money you aren't telling them about rather than to comment on what you do spend your benefits on.

 

Thanks again.

[san_d]

The OP is worried that the way he spends his money could one day be considered as Deprivation of Capital:

The following are further examples of when a person may have deprived themselves of

capital

• a lump sum payment has been made to someone else, for example as a gift, or to repay a

debt, but see Reason for disposing of capital asset later in this chapter

• substantial expenditure has been incurred on a non-essential item, for example on an

expensive holiday

• title deeds of a property, which is not the claimant’s home or will soon cease to be so

because, for example, they will be moving elsewhere, have been transferred to someone

else

• money has been put into a trust which cannot be revoked

• money has been converted into another form which would fall to be disregarded, for

example personal possessions

• capital has been reduced by extravagant living, for example gambling, or used to provide

a much higher standard of living than the claimant usually maintained

[bigissue]

The OP is worried that the way he spends his money could one day be considered as Deprivation of Capital:

 

What about this: money has been converted into another form which would fall to be disregarded, for

example personal possessions

 

Surely that could apply to just about anything even books basically anything you spent your cash on other than essentials so for example a woman buying a jar of nivea with her weekly shop while on benefits would be ok but a woman saving up to buy a more expensive face cream from John Lewis might be regarded as living an extravegant lifestyle? I buying the odd item of clothing as needed after all we cannot go naked but what about something like dvd rentals or perhaps the odd trip to the cinema? How about a person on JSA or ESA with a Gym membership, or someone who spends money of drink, ciggerettes or take away food?

 

Could any of this be seen as "extravagant living" it sems like it is fairly subjective.

 

It does make me wonder as for example someone living at home with family often will get less in benefits i.e. no HB but if their family are supportive they may get byeasily with some cash left over for "pocket money" on their JSA or ESA as a loving family would not see them go without however A person on their own getting ESA or JSA might get a good deal more in additional benefits such as HB but they are responsible for everything and may struggle to cover all essentials on their benefit money with nothing ever left over for a little treat not even a cut price paper back or jar of nivea from the supermarket!

 

I wonder what the DWP intend the benefit to be for as they must know the varying circumstances of people will alter how well the benefit they get covers their needs. I could go on as the DWP automatically assume that in a couple if one member works they will be happy to support the other if they lose their job or become too sick to work, this is not always the case even if it should be.

[hensteeth]

Think you are worrying about nothing..

 

How you spend your benefit is your own personal choice.

 

DWP would not be interested at all, why would they be?

 

Sounds like you manage your money well to be fair and you have got every thing covered.......

 

 

If that is the case I wish someone would put a sock in the mouth of Jeremy Kyle when he finds out that one of his guests happens to spend 50/60% of his benefit money on drugs and alcohol!!

 

Also would someone on here who may also be a member of 'MSE' tell them on that site not to get upset when they hear of people spending their (taxpaying public's) money on porn, drugs, alcohol and anything else they see as being 'not for what benefits are paid for'.

[rainbo]

Just don't buy gold bars with it....

[MIKEY DABODEE]

If that is the case I wish someone would put a sock in the mouth of Jeremy Kyle when he finds out that one of his guests happens to spend 50/60% of his benefit money on drugs and alcohol!!

 

Also would someone on here who may also be a member of 'MSE' tell them on that site not to get upset when they hear of people spending their (taxpaying public's) money on porn, drugs, alcohol and anything else they see as being 'not for what benefits are paid for'.

 

Do people on benefits really spend all their money on porn, drugs, alcohol?, think not laughable

 

I have also heard there is nothing wrong with being a member of MSE, as there are top tips on saving money to be found on there

and we can all do with as much help as we can get money wise these days....

 

Jeremy Kyle, well thank godness then, dont ever watch it....

Edited August 7, 2012 by MIKEY DABODEE

[antone]

What about this: money has been converted into another form which would fall to be disregarded, for

example personal possessions

 

Surely that could apply to just about anything even books basically anything you spent your cash on other than essentials so for example a woman buying a jar of nivea with her weekly shop while on benefits would be ok but a woman saving up to buy a more expensive face cream from John Lewis might be regarded as living an extravegant lifestyle? I buying the odd item of clothing as needed after all we cannot go naked but what about something like dvd rentals or perhaps the odd trip to the cinema? How about a person on JSA or ESA with a Gym membership, or someone who spends money of drink, ciggerettes or take away food?

 

Could any of this be seen as "extravagant living" it sems like it is fairly subjective.

 

 

There is no such thing, in benefit law, as "extravagant living". Women (or men, for that matter) can buy face cream with their benefits. They can buy a four pack of Stella, they can buy an Indian takeout. This is not against the law, and not something the DWP cares about in any way, shape or form. I repeat - this is not something the DWP cares about.

 

Deprivation of capital is a concept related to something very specific - intentionally spending your capital unnecessarily in order to qualify for means-tested benefits. But a claimant's weekly benefit payments are not capital, they are income.

[hensteeth]

There is no such thing, in benefit law, as "extravagant living". Women (or men, for that matter) can buy face cream with their benefits. They can buy a four pack of Stella, they can buy an Indian takeout. This is not against the law, and not something the DWP cares about in any way, shape or form. I repeat - this is not something the DWP cares about.

 

Deprivation of capital is a concept related to something very specific - intentionally spending your capital unnecessarily in order to qualify for means-tested benefits. But a claimant's weekly benefit payments are not capital, they are income.

 

It is capital after 52 weeks if you save any of your benefits!

 

I know of one person that actually has saved all of his State Pension for the past 23 years!!!

[antone]

It is capital after 52 weeks if you save any of your benefits!

 

I know of one person that actually has saved all of his State Pension for the past 23 years!!!

 

This is true, though I didn't think that was the question being asked. But yes, payments become capital after a year. Saving one's SRP for 23 years is quite an achievement.

[bigissue]

There is no such thing, in benefit law, as "extravagant living". Women (or men, for that matter) can buy face cream with their benefits. They can buy a four pack of Stella, they can buy an Indian takeout. This is not against the law, and not something the DWP cares about in any way, shape or form. I repeat - this is not something the DWP cares about.

 

Deprivation of capital is a concept related to something very specific - intentionally spending your capital unnecessarily in order to qualify for means-tested benefits. But a claimant's weekly benefit payments are not capital, they are income.

 

Thank you for clearing that up, not that it affects me other than a few books but I did wonder. I suppose it is easy if you are on any kind of state benefits these days to feel a little paranoid as there seems to be a lot of moral judgement about claiments, from the government, in the press and even from the public. Of course someone on JSA should be able to go into the pub for a pint with his mates or a woman should be allowed to buy a little something to cheer herself up in boots even if it is just a £9.99 face cream but there is the sense that it might be frowned upon. However as long as it is legal that is all that matters, the current mood about such things is something else!

 

Thanks again!

[bigissue]

It is capital after 52 weeks if you save any of your benefits!

 

I know of one person that actually has saved all of his State Pension for the past 23 years!!!

 

I have saved a few pounds here and there over the year from my benefit money but only so I can afford to buy my family a few gifts at christmas and even at that it won't be much, I can't imagine being able to save so much "capital" it would affect my benefits!

[antone]

Thank you for clearing that up, not that it affects me other than a few books but I did wonder. I suppose it is easy if you are on any kind of state benefits these days to feel a little paranoid as there seems to be a lot of moral judgement about claiments, from the government, in the press and even from the public. Of course someone on JSA should be able to go into the pub for a pint with his mates or a woman should be allowed to buy a little something to cheer herself up in boots even if it is just a £9.99 face cream but there is the sense that it might be frowned upon. However as long as it is legal that is all that matters, the current mood about such things is something else!

 

Thanks again!

 

There does seem to be a degree of moral judgement about such things, yes. But still, no law permits the DWP to deny you benefits if they think you are not spending them on the "correct" things, and I can assure you that benefit processors simply don't have time to worry about what you spend your money on. If they want to see bank statements, it will be to ensure that you don't have any source of undeclared income, not to scold you for buying a book from eBay or a pint at the pub.

[antone]

I have saved a few pounds here and there over the year from my benefit money but only so I can afford to buy my family a few gifts at christmas and even at that it won't be much, I can't imagine being able to save so much "capital" it would affect my benefits!

 

If you are on means tested benefits, your capital will start to affect them when it exceeds £6000, or £10,000 if your benefit is State Pension Credit. You're probably fine.

[Consumer dude]

Not declaring your pint at wetherspoons is a serious criminal offence which must compare to excessive bank bonuses. There is no place to hide..

[hensteeth]

This is true, though I didn't think that was the question being asked. But yes, payments become capital after a year. Saving one's SRP for 23 years is quite an achievement.

 

I thought so to. But he managed to live on his private pension + his disability benefits.

 

It does however concern me that benefits and pensions if they are saved, will eventally keep some people out of means tested benefits.

 

Consequently, I do feel that the rule of thumb is that where any benefit or state pension is paid, it should be spent entirely - save maybe a couple of hundred for one off items.

 

Some people would say that that is a prime example of why all benefits including the state pension should be means tested.

[Nystagmite]

How can you force people to spend benefits? I am trying to save mine; as I need a piece of equipment which costs between £200 - 300. I can't buy that if I am forced to spend my benefits. I don't always need stuff either.

[hensteeth]

I have saved a few pounds here and there over the year from my benefit money but only so I can afford to buy my family a few gifts at christmas and even at that it won't be much, I can't imagine being able to save so much "capital" it would affect my benefits!

 

It may surprise you to learn that some people who only receive means tested benfits do in fact save a considerable amount of their money. It is not difficult to imagine living in abject poverty is normal to them and could well see at least 50% of their weekly income put aside.

[hensteeth]

How can you force people to spend benefits? I am trying to save mine; as I need a piece of equipment which costs between £200 - 300. I can't buy that if I am forced to spend my benefits. I don't always need stuff either.

 

But then if you receive a means tested benefit, that benefit is likely to be reduced once your savings go over £6000.

[Nystagmite]

Some of them have no choice but to do that.

[count orlok]

I know a couple who are on benefits that go to Disney Florida each year for holiday. They get their food out of supermarket and resteraunt skips, don't spend any money on clothes or washing products. All they do is go without so they can live well for a couple of weeks a years. If we didn't spend money on food we could save about 5 or 6 grand a year. We choose to eat reasonably well and keep out home warm, but we can't afford to go out or smoke and never go on holiday.

 

The gov check your credits files to make sure you are not living beyond your means, but other than that its up to you how you spend your benefits.

[MIKEY DABODEE]

.

 

The gov check your credits files to make sure you are not living beyond your means, but other than that its up to you how you spend your benefits.

 

They dont check credit files for that reason. They have scans that link names to addresses, and if it provides a match then the file is checked eg single tax credit claims etc

[worried33]

I find it extremely hard to save any money and I am only on IB and housing costs. The biggest reasons are I live on my own, and that food and electric have shot up during the past 5 years, food especially. I try to always keep my bank balance as high as possible as there is always a chance of benefits been stopped from things like a failed WCA.

 

This is the reason I decided to now claim DLA so I have a backup income although that to me seems harder to claim, as they appear to make judgements based on how much help one actually gets.

 

In terms of what you spend money on it looks obvious to me the government will give less and less freedom in the future, they are already asking credits agencies to pass on things like credit records, so if eg a benefit claimant has a big credit card that can cause a red flag and cause a benefit review, and we have had ministers state in public they think claimants shouldnt be buying things like electrical goods. It wouldnt surprise me to see future benefit entitlements at least partially be in things like food vouchers.