DWP confirms cash limits for claiming Universal Credit, ESA, JSA and other benefits

The Department for Work and Pensions (DWP) in the UK has confirmed the capital limits applicable to several state benefits. This comes ahead of new powers aimed at monitoring claimants’ bank accounts.

Under the new measures, Britain’s top 15 banks will be requested to check for amounts exceeding the limit for claiming benefits. The focus is on addressing cases of potential fraud in the benefits system and cases where claimants are staying overseas longer than permitted.  The proposed legislation, part of the Data Protection and Digital Information Bill, is currently going through the House of Lords and is expected to come into effect in 2025, with all banks on board by 2030. Additional banks and financial services may be included later if necessary.

The DWP highlighted the capital limit of £16,000 for individuals claiming means-tested benefits, including Universal Credit, Income-based Jobseeker’s Allowance, Income-related Employment and Support Allowance, Income Support, and Housing Benefit (for those under State Pension age).  The capital limit of £16,000 will remain unchanged when the new benefit rates take effect in April 2024. Despite a 6.7% increase in benefit payments, capital limits and benefit caps will stay the same.

Capital between £6,000 and £16,000 is treated as providing a monthly income of £4.35 for each £250, or part of £250. The treatment applies regardless of whether the capital generates income. For instance, if an individual has £6,300 in savings, £6,000 will be ignored, and the remaining £300 will be treated as giving a monthly income of £8.70. Those receiving income-based JSA, income-related ESA, Income Support, and Housing Benefit may lose £1 per week for every £250, or part of £250, exceeding £6,000.

New Style ESA recipients may see their payments affected if they receive more than £85 per week from a private pension. Half of the private pension income over £85 will be deducted from ESA payments each week.

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