DWP clarifies Universal Credit position on protection pay-outs

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"Advisers should check, at the point of claim, if their client is in an area where Universal Credit has gone live" - BRHG's Richard Walsh
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"Advisers should check, at the point of claim, if their client is in an area where Universal Credit has gone live" - BRHG's Richard Walsh

The Department for Work and Pensions (DWP) has issued a clarification that pay-outs from term life, critical and terminal illness insurance policies will not impact means-testing for Universal Credit.

The DWP was responding to an inquiry by the Building Resilient Households Group (BRHG) on how payouts from these insurance policies would be treated for means-tested benefits for working age people The group said the key change was that Universal Credit legislation made it clear that, if a person used their capital to pay off or reduce a debt, including a mortgage, they would not be treated as depriving themselves of that capital. "Once the capital has been used to pay off a debt, therefore,...

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