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Notional capital and welfare benefit
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# 1
Dellgirl101
Old 01-06-2011, 12:03 PM
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Unhappy Notional capital and welfare benefit

Hello,
My friend has been summoned to answer charges that he has knowingly got rid of notional capital in order to gain welfare benefit. He's been pleading not guilty but I've done some reading and thought that a guilty plea with explanation may be best. To cut a long story short, he's unemployed for the last 3 & 1/2 years. He's borrowed money to do some needed work in the house. However the benefit officer saw this and told him that this "notional capital" prevented him from receiving benefits. In his ignorance he gave back the money or most of it I think with the argument ridding d himself of debt and possibly bankruptcy should he not get a job in near future is better for his overall welfare/welbeing. He also thought that it didn't seem right applying for benefit and at same time incurring debt. Can these arguments stand up before a trial? He's really worried about this . Thanks for all the help.
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# 2
viktory
Old 01-06-2011, 12:18 PM
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How much money did he borrow? And did he give the money back intact or use to pay off debt as your OP is not clear. Does he have receipts to show any purchases made or debts paid?

Last edited by viktory; 01-06-2011 at 12:22 PM.
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# 3
Dellgirl101
Old 01-06-2011, 12:33 PM
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I think the amount borrowed was approx. 38,000. He's paid back to the lender. not sure how much but he said it's most of it. I think some was used to sort out radiator problems - not sure of receipts but I can verify with him.
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# 4
dmg24
Old 01-06-2011, 12:36 PM
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You talk about a 'trial', how far has this case gone?
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# 5
dmg24
Old 01-06-2011, 12:47 PM
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Quote:
 
29548 Money which a person gets to pay for essential repairs to or to improve the home is disregarded to give time for the work to be done if

1.
as a condition of getting the money it has to be used to pay for those repairs and improvements and

2.
the person is going to use the money to pay for that work.
The period of disregard is 26 weeks or longer if it is reasonable from the date the money is paid1.

Note:
The money can be a loan, grant or gift. The condition that it has to be used for the repairs and improvements does not have to be in writing.
Was the work essential?
Was it borrowed specifically to do the work?
Who on earth would lend 38,000 to someone who is long term unemployed?
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# 6
Dellgirl101
Old 01-06-2011, 12:52 PM
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A don't know if trial is the right term. He's said he had a summons to attend an hearing. As far as essentials in terms of work on house these details i don't know, however, his claim is that the money was borrowed for that purpose. Who lent him it, I didn't ask that much. I guess these are things he will need to clarify/justify at his hearing?
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# 7
real1314
Old 01-06-2011, 1:15 PM
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Quote:
Originally Posted by Dellgirl101 View Post
I think the amount borrowed was approx. 38,000. He's paid back to the lender. not sure how much but he said it's most of it. I think some was used to sort out radiator problems - not sure of receipts but I can verify with him.

Ok, when you say "lender" was this a financial institution? Or an individual?

Was there any documentation to support the loan?

And 38k for "radiator problems" ? Erm was the problem that the walls they were fixed to needed re-building?

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# 8
dmg24
Old 01-06-2011, 1:17 PM
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If he has been invited for an interview under caution it is exactly that, a taped interview.

I think that, as much as you are trying to help him, you don't know nearly enough about the facts of the case to give any constructive advice. He needs to go and be honest, but there is something that does not add up in his story.
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# 9
Dellgirl101
Old 01-06-2011, 1:29 PM
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I will have to agree with you dmg24. Thank you all for the input, there're food for thought here.
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# 10
dodger1
Old 01-06-2011, 2:37 PM
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Where does a long term unemployed person get 38,000 from to repay a loan?
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# 11
Hammyman
Old 01-06-2011, 4:02 PM
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If the 38k was to replace a roof falling off then thats OK. If the 38k was to build an extension, thats not OK.
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# 12
rogerblack
Old 01-06-2011, 4:24 PM
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Quote:
Originally Posted by Dellgirl101 View Post
Hello,
My friend has been summoned to answer charges that he has knowingly got rid of notional capital in order to gain welfare benefit.
The key is 'knowingly'.
Can it be reasonably argued that the friend did not know of the deprivation of capital rules?
http://www.dwp.gov.uk/docs/dmgch52.pdf - capital rules - for ESA - though they are all identical I think.

See 52825.
If they gave back a large sum of money that they were free to use in any manner, knowing it would mean they would be entitled to benefit, then they have knowingly deprived themselves of capital, and the notional capital rules apply meaning they are not eligable for benefit.

If they did not know, then in theory this is a defence - but proving this will be hard.
It may be easier to argue if they've never been on benefit, and had little knowledge of the system, or if the money was borrowed specifically for household alterations with some agreement signed with the lender.
Or indeed if the lender was pressing for repayment of the loan.
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# 13
NASA
Old 01-06-2011, 5:54 PM
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It sounds like a hastily thought up excuse.
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# 14
33degrees
Old 01-06-2011, 7:13 PM
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Quote:
Originally Posted by rogerblack View Post
The key is 'knowingly'.
Can it be reasonably argued that the friend did not know of the deprivation of capital rules?
http://www.dwp.gov.uk/docs/dmgch52.pdf - capital rules - for ESA - though they are all identical I think.

See 52825.
If they gave back a large sum of money that they were free to use in any manner, knowing it would mean they would be entitled to benefit, then they have knowingly deprived themselves of capital, and the notional capital rules apply meaning they are not eligable for benefit.

If they did not know, then in theory this is a defence - but proving this will be hard.
It may be easier to argue if they've never been on benefit, and had little knowledge of the system, or if the money was borrowed specifically for household alterations with some agreement signed with the lender.
Or indeed if the lender was pressing for repayment of the loan.
It sounds like the person in question was gifted 38,000 by an individual which then became a verbal loan.Further to your comments re silver in a locked thread yesterday, when the euro implodes, which it will, as planned, before August 1, then the US dollar will fall soon afterwards, and as all the fiat out there are derivatives of the world's reserve currency then welcome to Weimar Britain too. Anyone who's informed that sells their silver or gold insurance at this time will deserve their place amongst a very long queue for free soup.
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# 15
woodbine
Old 01-06-2011, 10:39 PM
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heres what we did last year and what we were told by dwp

we took out a secured loan of 10k ,7.5k was to pay off unsecured loan,1k towards new central heating and 1.5k we kept(but still had under 6k savings)
the unsecured debt was paid off 3 hours after we got the secured loan,we were told in NO uncertain terms that this didnt amount to D.O.C.(by phone)

WE are now in the position where we have had to repay the secured loan as we sold the house 2 weeks ago,i suppose i`m wondering now will the DWP pick up on any of this and decide that we were"guilty"of D.O.C when we took out the loan even though we were given the go ahead to do what we did last year,if any of that makes sense
~~~JOHN~~~



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# 16
rogerblack
Old 01-06-2011, 11:33 PM
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Quote:
Originally Posted by woodbine View Post
i suppose i`m wondering now will the DWP pick up on any of this and decide that we were"guilty"of D.O.C when we took out the loan even though we were given the go ahead to do what we did last year,if any of that makes sense
If you possibly can, get this sort of thing confirmed at the time in writing, if you can.
Or at least record the call.
While 99% of the time this would probably be fine, with no problems, the DWP does at times seem to lose papers/notes.

It's specifically said in the DWP guidance - see the earlier link I posted - that if you are given approval for something before the event, they can't come back later, and change their minds.
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