Will an insurance settlement effect my family tax credits/housing benefit/council tax benefit?.

Question

Hi

I work 16 hours, and claim child tax credits,(1 child) and working tax credits, I get housing benefit of £38 per week towards my rent, and about £3 per week towards my council tax. I have about £600 savings.

Last year, I was in a car accident, and have just received a settlement of £2,300. Will this amount effect the benefits I'm receiving? Will I have to declare this? (and to whom?)

Thanks in advamce for any answers.

Answer 1

Yes, according to the CAB website it is the £6,000 limit before housing benefit and council tax are reduced, so I really don’t think you need to tell them as it isn’t going to make any difference anyway.

http://www.adviceguide.org.uk/index/life...

I’m not sure about the tax credits because there is no capital limit but interest on capital is counted as income, but there may be a disregard on the first £300 pa so you probably won’t be affected.  You’re asked to report a change in income but not in capital, if you want to check on this there’s a helpline number at the bottom of the page here if you don’t know whether a change in circumstances should be reported or not:

http://www.adviceguide.org.uk/b_tax_cred...

Looks as though you're going to be okay.

Answer 2

I thought you can have savings of upto £6,000 without your benefits being stopped or reduced, but i could be wrong as this was a while ago

Answer 3

I would agree with Gary above, but I would declare it anyway .

Answer 4

Ariel has given you a comprehensive answer.

Just thought I would add the comment so you knew you could rely on the previous answer.

Answer 5

I agree with the others - declare it to be on the safe side but if I remember correctly, with regards to Council Tax Benefit and Housing Benefit, savings (in other words any money you have) under £2500 does not need to be declared, if its between £2500 & £6000 you declare it & they used to gradually reduce your entitlement on a sliding scale so that if you have £6000 or more you are not entitled.

Sorry I cant help with the Tax Credits, I dont know enough about them & dont want to give you the wrong information.

Like I say declare it to be on the safe side as if you dont you may be charged with "failing to disclose" & end up with a fraud investigation & an overpayment that you have to repay or even be taken to court (But those are worst case scenarios).

Its treated as savings/capital available

Answer 6

I agree with the others but to sure & on the safe side go to the Citizen's Advice Bureau who specialize in Welfare matters.  

Answer 7

No it will have no impact

No amount of savings affects Tax Credits - it is based only on your income

Housing Benefit and Council Tax benefit are only affected by savings or capital over 6000 as your combined savings is under this it will have no affect at all.

There is no need to declare it unless it takes you over 6,000. No amount under 6,000 has to be declared to Housing Benefit or DWP

The settlement would be classed as savings not as income.