Deprivation of Capital
E.C.Hutchinson
limits for means tested benefit purposes even after the Compensation
Recovery Unit have reclaimed money due to them.
See http://www.dwp.gov.uk/advisers/compensation_recovery.htm for further
details.
In order to give more specific advice to a poster in a dilemma concerning
her wish to repay a loan specifically entered into in expectation that it
would be repaid when the Compensation came through I wrote to the CRU asking
for more guidance.
Here is a copy of that guidance.
The question you ask is not one that can be answered with a definitive list
of "acceptable" uses of capital. The reason for this is that the question
of whether a customer has or has not deprived him or herself of capital, for
the purpose of obtaining or increasing entitlement to benefit, will always
depend upon the circumstances of the specific case.
There is an enormous amount of case law on this very issue but there are
some guidelines that can be drawn from it that will be used by decision
makers. As you will know, the notional capital issue has 2 aspects - the
deprivation of the capital and the purpose of that deprivation. The
question of deprivation is the easier of these to resolve but the question
of purpose will always be specific to the case. Case law suggests that
obtaining benefit needs to be a "significant operative purpose" of the
transaction and the Commissioners mention a number of relevant factors e.g.
whether the deprivation was a gift or in return for a service, the personal
circumstances of the person (e.g. age, state of health, employment
prospects, needs), whether a creditor was pressing for repayment of a loan.
It will be an issue of fact when these other factors indicate that the
reasonably foreseeable consequence of obtaining benefit was not a
significant operative factor.
There is also a Commissioner's decision that might act against a local
office giving too specific advice about what deprivation would and would not
affect benefit. This decision was that where a claimant had been warned by
the local office about the consequences of a transaction (i.e. that the
notional capital regulations would apply) but still went ahead, this showed
that he/she could not have as any part of his/her purpose securing or
increasing entitlement to benefit.
Two examples illustrate the need to look at each case individually -
1 The Commissioner in OR(SB) 9/91 stresses that a positive intention to
obtain benefit must be shown to be a significant operative purpose. The
claimant had transferred her former home to her two daughters. Evidence was
given that her sole intention was to make a gift to her daughters, as she
intended to leave the property to them in her will and it was no longer of
any use to her (she being permanently in need of residential nursing care).
The Commissioner notes that this did not explain why the transfer was made
when it was, why the proceeds...would not have been of use to the claimant
and what she thought she would live on if she gave the property away. She
had been in receipt of Supplementary benefit for several years. On the
evidence, the obtaining of benefit was a significant operative purpose.
2 In CIS 242/1993, another case where the claimant had gone into residential
care, the Commissioner reaches the opposite conclusion on the facts. The
claimant's son had cared for his mother for 15 years. When she went into a
residential care home , she gave her share of the proceeds of sale of their
jointly owned home to her son to be used towards the purchase of his flat.
The Commissioner accepts that she had relinquished her share in gratitude to
her son and not to secure Income Support.
They also illustrate why there can be no hard and fast rules for determining
whether specific type of capital repayments could be disregarded. This
decision is the responsibility of each decision maker based on the facts of
each case. I have attached a copy of guidance that decision makers use when
considering cases such as the ones you mention.
The Decision Makers guide is available online at
http://www.dwp.gov.uk/publications/dwp/dmg/index.htm Volume 5 chapter 29
29805 onwards.
<-EQAULIZER->
as a direct result of the injurys sustained i was awarded DLA middle rate
care & Mobilty high rate & long term incapacity benefit these were awarded
in Nov 96, i suffered burst fractures of the L1,L2,L4 spine & a severely
commitutated fracture right forearm and wrist.
During the Compensation claim a "CRU Certificate" was requested at the start
of the claim it was issued and it stated as "NIL" benefits were recoverable,
this "CRU Certificate" as stated requested at the start of the claim this
"Certificate" was for a period of 26 weeks.
A further 2 "CRU Certificates" were requested the last one being for the
purposes of a settlement offer, the claim spanned a total of some 11 months
all subsequent "Certificates" stated that there were "NIL" recoverable
benefits!!, my question is how did they not show that there were
"Recoverable Benefits" clearly this was an error.
On proffesional advice i was always re-assured that if these "CRU
Certificates" were to be showing "NIL" recoverable benefits, the person
advising had knowledge of all my benefits from the outset including the fact
that i was in reciept of housing benefit but as "Contibuting".
Another question who was liable to notify any departments of what was the
benefits agency at the time and or Local Authority if there were any changes
in my circumstances taking into consideration all of the above. i was being
advised by a proffesional person who was paid a total of £12,536 this being
his/her costs.
I will end here and post more later.
Regards.
" E.C.Hutchinson" <echutc...@ntlworld.com> wrote in message
news:lYgda.95$DS2....@newsfep1-win.server.ntli.net...
> Successful compensation claimants may have more than the Capital/Savings
> limits for means tested benefit purposes even after the Compensation
> Recovery Unit have reclaimed money due to them.
> See http://www.dwp.gov.uk/advisers/compensation_recovery.htm for further
> details.
> In order to give more specific advice to a poster in a dilemma concerning
> her wish to repay a loan specifically entered into in expectation that it
> would be repaid when the Compensation came through I wrote to the CRU
asking
> for more guidance.
>
> Here is a copy of that guidance.
>
Snipped
Troll
"<-EQAULIZER->" <eqau...@ntlworld.com> writes
>
>I will end here and post more later.
>
Just deprive yourselves of the bl**dy capital and shut up about it -
we'll turn a blind eye rather than get involved in a Diminishing
Notional Capital situation.
--
Sue from Darkside Borough Council
tr...@darkside.gov.uk - if only