Savings - are bonus amounts ignored?

Hello,

I was lucky enough to get a very unexpected back payment of arrears for severe disability premium last year - I have put it into a Lifetime ISA and it is earning interest (a tiny amount) along with a bonus of £2000, but the bonus is ONLY payable on buying a first home, when aged 60 or over or if terminally ill. If I withdraw my money in any other circumstance that bonus would not be paid to me. See www.gov.uk/lifetime-isa

1. Is such a bonus included in how either PIP/ESA or Housing/Council Tax Benefit calculate any savings I have or is it disregarded (because essentially I do not have access to that bonus money if I had to withdraw my money today)?

2. ESA said in their letter to me that these "arrears of benefit amounting to XXX fall to be disregarded as capital from the date they are received for the remainder of the award to the Income Related benefit or until they are spent, whichever is sooner". Is my understanding correct that this means the arrears payment will be totally ignored by existing benefits unless my ESA is not extended at some point or it ends? So this means I may hold that arrears money and have savings of up £6000 before there is any issue with my benefits? (I'm not at that point, but just want to understand the situation fully).

Thanks very much for any help anyone can give,

Glen

Hello,

Wonder if I can ask a follow up on this (thanks for the helpful previous reply!).
1.

Deprivation of capital is when you knowingly reduce or transfer elsewhere your savings or other capital to get, or increase your award of Universal Credit, so keep receipts of anything you spend your savings on.

Can you provide any more info on what is classed as Deprivation of Capital? Hadn't heard of it and now, after googling, feel pretty baffled and worried about what I can and can't spend my money on. I can understand the obvious things wouldn't be OK to do - like handing money to other people, buying very extravagant gifts for them or popping off for a luxury Caribbean holiday (if COVID and my disability didn't make that impossible!). I don't want to break any rules, so want to understand this properly.

Because of the lump sum, plus the extra I am getting monthly (since the correction) and my small amount of 'permitted work' income, I could potentially hit the capital limit in the months ahead.

This now has me worried about what I can spend my money - where is the line for what is acceptable or not? When I received the payment I thought that a very sensible thing to do with it would be to see if possible to use it as deposit to buy my council flat under Right To Buy if affordable (which does look an option) - therefore reducing my future reliance on the state if my long-term illness remains as it is. But would that be unacceptable to acquire a property leasehold?

Similarly, would things like replacing my 7 year old sofa with something more comfortable be OK? Do I have to be careful to buy something cheap to modest or can I buy a more expensive recliner sofa that is more comfortable for spending a huge amount of my life on? I'd never buy top of the range or extravagant - I'm talking £1-2k-ish DFS double discount, half price sale sofas - but just how thrifty am I expected to be?

I also have a 7 year old laptop that is knackered (very slow, no working battery, so has to be plugged in with lead I got off eBay that pops out often!). Is it acceptable to replace that and go for mid-range, rather than the cheapest that will not last long? Would that be considered frivolous because I have a phone and tablet? I am reliant on the internet for so much and you cannot do everything on smaller devices.

I am also considering investing in a mobility scooter or wheelchair to help me get out more - but presume that is just fine and dandy by nature?

There's a lot of questions there - but think it makes my point - any guidance to educate me on this appreciated (and let me enjoy having cash in the bank after years of debt previously).

2.

In regards to the bonus, once the bonus is paid then it would be classed as capital, remember savings such as ISA's, premium bonds, stocks and shares are all classed as Capital.

I believe the Lifetime ISA is paid on completion of the home purchase, so that bonus amount would never be in my bank or would just be in there for a matter of hours during the exchange process? Would that pay out point still be classed as Capital and potentially tip me over the savings limit when added?

Thanks very much in advance for your help