Having made a claim for UC, but not yet had it processed, are there any circumstances under which one may use the holiday pay one is paid - at the medical termination of employment - to pay off debts about which one is being threatened, when one has a medical history of suicidal ideation and vulnerable mental health? UC are saying that they will deduct 67 pence in the pound!
If your total savings, including the holiday pay are less than £6000 then you are not accountable to the DWP for how you spend that money.
If your savings are greater than that and you spend the money you could potentially fall into the 'deliberate deprivation of assets' hole.
It then comes down to a discussion with the DWP about how essential the payments you make are. If the debt predates the likelihood of you needing to be in receipt of UC or was for essential expenditure e.g. repairs to the house then I don't think you have any problems at all. At the other extreme, if having known that you were likely to be claiming UC and you took out a massive loan for a world cruise (I know, unlikely in covid times) then they could well look at it in a different way.
If you are not clear which camp your particular debt would fall into, I would advise you to get some individual advise.
Catherine
Nothing on this board constitutes legal advice - always consult a professional about specific problems
