Deprivation of capital

If you intentionally give away or spend money from your capital to get Universal Credit (UC) or increase the amount you get, the DWP may treat you as still having the money (often called having ‘ notional capital ’). This intention is called 'deprivation of capital'.

You aren’t treated as depriving yourself of capital if you:

• pay off or reduce a debt
• buy goods or services that are reasonable and needed in your circumstances.

If you are made bankrupt, your capital is not counted.

How the DWP decides

The DWP will consider whether getting UC, or getting more UC, was a significant reason for spending or giving away your capital.

They will look at factors such as:

• how much choice you had about spending your capital
• how long before claiming UC you spent the money
• whether you had the mental capacity to make decisions at the time

You may not be treated as having deprived yourself of capital if you did not know about the Universal Credit capital rules or if the DWP gave you incorrect information.

If you're treated as having notional capital

If you're treated as having notional capital , the amount is not fixed and can reduce over time. This is called the ‘diminishing notional capital rule’.

The reduction depends on how much notional capital you have:

• if your notional capital is over £16,000 and this means you cannot get Universal Credit, it is reduced each month by the amount of UC you would have received
• if your notional capital is between £6,000 and £16,000, it is reduced each month by the amount of assumed income calculated from that capital.

Any notional capital is added to any actual capital you have, and together they can reduce your UC or stop it completely.

If your UC stops, you should make a new claim when you think your capital has fallen enough for you to qualify again.

If you disagree with the decision

If you disagree with a decision that you have deprived yourself of capital or that you have notional capital , you can ask for a mandatory reconsideration.