MoneyMagpie Editor and financial expert Vicky Parry warns about six reasons benefits claimants could have their money stopped
Claiming benefits of any kind involves a lot of rigmarole and stress, time, and paperwork. So the worst thing that can happen is to have your money stopped or reduced unexpectedly.
Managing your money is even harder when there’s the risk of your income being stopped or reduced by the Job Centre or Universal Credit. So, avoid these six things to make sure you’re not sanctioned or lose your benefits entirely.
Changes to your health
If you are in receipt of benefits to support you while you’re in ill health, these can be stopped if you don’t provide fit notes when asked. For those with long-term conditions that will not improve over time, speak to your GP about a note that covers several months.
If your health improves and you may be able to seek work, even if it is part-time, you need to let DWP know.
When people go into hospital, sheltered accommodation, or a care home, they must tell the DWP about this change. You can do this on your Universal Credit work journal, but if someone you know is incapacitated in hospital, send letters and keep records to make sure there is evidence that DWP was informed on their behalf.
Moving in with your partner
If you move in with your partner, you must tell DWP. Universal Credit claimants must create a joint claim, and your partner’s income and assets will be taken into account when assessing your benefit entitlement.
Similarly, if you currently live with your partner on a joint claim but split up, you must report this. Make sure you also inform the council, so that any Council Tax benefit can be reassessed on your sole income instead of joint. You will need to make declarations that you are separated, even if you have to live together for a short while before you find somewhere new to live.
Selling your house
If you have sold your house and have a large amount of money in your bank account, this does not automatically stop your benefits payments. However, you must tell DWP as soon as you sell your house to account for the increased funds in your savings.
The amount is likely to take you over the £16,000 maximum savings limit. However, if you are buying another house, the proceeds from the sale can be disregarded for up to six months if you are using it to buy a new home.
You will need to prove that your funds are going towards a new home. This could include things like a deposit receipt and contract from a new-build home that is not finished yet, or evidence you have made an offer on a property and are waiting for the sale process to be completed.
Missing appointments
You must go to appointments that you are asked to attend. Sometimes, these might not work for your diary – such as being at the same time as a job interview, or during your part-time working hours. Make sure you rearrange your appointment as soon as possible to avoid sanctions.
If there are regular hours you cannot attend appointments, such as part-time work hours or during a school pickup or drop off, make sure you put this in your Universal Credit journal.
Changing your hours at work
If you claim means-tested benefits and are in work, you need to tell DWP when your hours go up or down from their usual pattern. This includes if it is a temporary increase or decrease.
For those working fewer hours because they have taken annual leave during a benefits assessment period, they don’t need to tell DWP. That’s because their income will remain the same with their annual leave pay.
Getting an insurance payout
People who are claiming benefits for ill health because of an injury or accident may have an insurance case ongoing when they first claim. But you must tell DWP if you have an insurance payout due that is directly related to your injury or health.
This is because insurance payouts often include an assessment of lost earnings. Your benefits might not be stopped or reclaimed when you receive your insurance, but you may need to pay some back, especially if your claim included a portion of the payout for lost earnings over the time you have been ill (and claiming benefits).
Your money may not be reduced or stopped, but you must be honest about receiving it. Large sums could impact your entitlement to means-tested benefits, but there are complicated rules around this if, for example, the injury caused was life-changing and requires you to spend funds on constant care or home adaptations. Speak to the Job Centre or DWP if you are expecting a large insurance payout while claiming means-tested benefits.
- Some of the brands and websites we mention may be, or may have been, a partner of MoneyMagpie.com . However, we only ever mention brands we believe in and trust, so it never influences who we prioritise and link to.