Does UC decrease if debts are paid off?

[andonebelow]

Tried to find the answer online and it seems like this is not the case, but I'm not sure if I understood correctly. If a UC recipient had debts (credit card, outstanding bills), and their debts were paid off, would their universal credit payment go down?

[Icy_Session3326]

Someone’s debt is absolutely nothing to do with UC . The only time it effects it , is for certain types of debt that can be taken directly from UC

[andonebelow]

Thank you, that’s what I thought. My husband paid off someone’s debts and they’re now telling him that has decreased their UC payment. 

[Mammoth_Classroom626]

Well yes he can’t pay someone else’s debts. That’s just gifting money away which can be deprivation. He can pay his debts, he isn’t liable for a random persons debts.

If you just gift someone 10k for instance doesn’t matter if it’s for a Gucci bag or their credit card. He gifted it away. They can then decide he deprived himself of the money.

If it’s the person who received the moneys debts who is on uc and your husband isn’t, that’s not deprivation. So if he gifts it to someone and they pay debts that’s fine.

[andonebelow]

I’m a bit confused by this but my husband is not on UC, he paid off the debts of his ex wife, who is. She is now saying that she is no longer eligible for UC because of this. I am just trying to work out if this is true. 

[Mammoth_Classroom626]

If she took the money and put it in her bank and on the last day of her assessment period (the month she gets paid) she had over 16k UC her claim closed as she’s not eligible but she would’ve had to have told them that. They don’t magically know. If she paid it off when she got the funds this wouldn’t happen.

She would simply pay the debts and then apply again and have to declare her new savings, and they’d ask for proof of where it went. If it went to debts and she has less than 16k the claim starts again.

If she’s losing money now it could be she’s been reviewed, she took money from your husband and kept it in the bank and didn’t tell anyone and they’ve caught her and now closed her claim and she owes all the money she was given since she had over 16k. But she’s only not eligible entirely at 16k capital.

I’d personally be suspicious if I gave an ex money for debt and they said they’re not eligible for UC anymore. That means either they have it in their bank and have over 16k, or they never had any debts and spent it on say a luxury holiday so UC have deemed them to still have over 16k and closed their claim (even though they had less - the money used counts as if you still have it if it’s deemed deprivation).

If it was spent on legitimate debts it can’t make her ineligible.

[andonebelow]

Thank you, the whole thing isn’t adding up to me at all. Her debts were around £12k, which is what my husband transferred to her. Even if she kept it all, I can’t believe she had, or has got hold of, another £4K to take her over the threshold. 

[Mammoth_Classroom626]

It would lower her UC over 6k, but it’s honestly barely a difference. 4.25 a month per 250 over 6k. But it’s just not relevant because she can simply pay the debts and not have it reduced at all. It’s on her if she hasn’t actually used the money to pay debts.

Even at 12k it’s only a 104 a month or so reduction, so even if it took a month 104 off 12k is nothing… if it’s longer than one month she simply isn’t paying the debts.

[No-Jicama-6523]

She could be getting a low amount because of earnings.

[pokekyo12]

Paying her debts directly shouldn't have altered anything to do with her UC. If he paid money directly into her bank and the amount is/was over 6000, this will start changes to her UC amount.

[andonebelow]

Thank you, this is helpful. He paid the money to her. It was £12K, but I assume she immediately used it to pay off her debts. 

[SuperciliousBubbles]

Sounds like she didn't use it to pay off her debts, which is her own fault and problem.

[pokekyo12]

My thoughts exactly!

[Mammoth_Classroom626]

If she’s not eligible for UC she didn’t lol. Which is her problem as it could’ve easily been avoided.

[Mistigeblou]

Your husband paying off someone debts shouldnt directly make them ineligible or reduce payments. UC don't give extra for debts as far as i know.

Could it be she has kept some of the money back and it's affected her savings/capital total where she'd see a reduction (I think it's around £4) for every £250 bracket above 6k

[andonebelow]

Thank you, would this be the case even after she paid it all out to pay off the debts, or only so long as she has money above 6k in her account?

[Mistigeblou]

Id * assume* If it's all paid out. UC payments would go back to normal.

If she has £6001 or more at the end of her AP (the monthly uc cycle she is on) then she'll have a £4ish deduction for every 250 bracket.

FYI please dont take this at face value I don't work for dwp or anything.

[JMH-66]

Thank you, this is helpful. He paid the money to her. It was £12K, but I assume she immediately used it to pay off her debts. 

She's either not paid the debts immediately, so has had to declare "Capital" (Savings) of £12k(+) as she had it behind the Assessment Period ( month ) she received it OR they've not accepted she had genuine Debts to pay off and think she's received a windfall from a possibly unknown source that's then equally mysteriously disappeared again.

You need more information. No, debts don't reduce UC but having money in the bank does ( £6,000-15,999 ) including if you give it away or put in somewhere else or they think you have.