Universal Credit claimants who win money on the lottery or through betting could see their monthly payments reduced or stopped altogether, under existing Department for Work and Pensions (DWP) rules.
Money held in bank accounts, cash and savings is generally treated as capital when calculating entitlement to the benefit. A lottery jackpot or betting win could push total savings above the £6,000 threshold, resulting in a reduction to Universal Credit payments.
How savings affect Universal Credit
People with £6,000 or less in capital will not usually have their Universal Credit reduced because of their savings. Once total capital exceeds £6,000, the DWP applies a monthly deduction of £4.35 for every £250, or part of £250, above that threshold.
For example, someone whose total savings increase to £8,000 after a lottery or betting win would have £2,000 above the threshold, resulting in a deduction of £34.80 from their monthly Universal Credit payment. Someone with £14,500 in savings would face a monthly reduction of £147.90.
Claimants with more than £16,000 in capital are generally not eligible for Universal Credit, although special rules apply to some people who moved from tax credits after receiving a Migration Notice. The DWP assesses the combined capital of couples living together, even if only one partner claims Universal Credit.
Reporting winnings to the DWP
Although gambling winnings are generally free from income tax in the UK, that does not mean they are ignored when determining eligibility for means-tested benefits. The rules apply to money held by a claimant and their partner, including funds in current accounts, savings accounts, Cash ISAs and other investments.
DWP guidance on GOV.UK confirms that claimants must report changes to their money, savings and investments as soon as they happen. They can do this through their online Universal Credit account by selecting 'Report a change of circumstances' and updating the 'money, savings and investments' section.
The DWP warns that failing to report a change promptly could result in an overpayment that must be repaid. Changes in circumstances can also affect the amount paid for an entire monthly assessment period, rather than only from the date the change is reported.
Deprivation of capital rules
There are also rules covering people who deliberately reduce their savings to maintain or increase their Universal Credit entitlement, which the DWP calls 'deprivation of capital'. If someone deliberately gives away or disposes of money to qualify for more Universal Credit, the DWP can treat them as still possessing that money when calculating their benefit.
However, the official rules confirm that using savings to pay off debts or buy goods and services that are reasonable in the claimant's circumstances is not automatically treated as deprivation of capital.
A gambling win does not automatically mean someone will lose their Universal Credit. The effect depends on their total capital and individual circumstances. Anyone who receives a substantial lottery or betting win should therefore check their total savings and report the change to the DWP. Claimants can also check their monthly Universal Credit statement through the 'Payments' section of their online account to see how their award has been calculated.
