Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    Dellgirl101
    Notional capital and welfare benefit
    • #1
    • 1st Jun 11, 12:03 PM
    Notional capital and welfare benefit 1st Jun 11 at 12:03 PM
    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.
Page 1
  • viktory
    • #2
    • 1st Jun 11, 12:18 PM
    • #2
    • 1st Jun 11, 12:18 PM
    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.
  • Dellgirl101
    • #3
    • 1st Jun 11, 12:33 PM
    • #3
    • 1st Jun 11, 12:33 PM
    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.
  • dmg24
    • #4
    • 1st Jun 11, 12:36 PM
    • #4
    • 1st Jun 11, 12:36 PM
    You talk about a 'trial', how far has this case gone?
  • dmg24
    • #5
    • 1st Jun 11, 12:47 PM
    • #5
    • 1st Jun 11, 12:47 PM
     
    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?
  • Dellgirl101
    • #6
    • 1st Jun 11, 12:52 PM
    • #6
    • 1st Jun 11, 12:52 PM
    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?
  • real1314
    • #7
    • 1st Jun 11, 1:15 PM
    • #7
    • 1st Jun 11, 1:15 PM
    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.
    Originally posted by Dellgirl101

    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?

  • dmg24
    • #8
    • 1st Jun 11, 1:17 PM
    • #8
    • 1st Jun 11, 1:17 PM
    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.
  • Dellgirl101
    • #9
    • 1st Jun 11, 1:29 PM
    • #9
    • 1st Jun 11, 1:29 PM
    I will have to agree with you dmg24. Thank you all for the input, there're food for thought here.
    • dodger1
    • By dodger1 1st Jun 11, 2:37 PM
    • 4,368 Posts
    • 5,622 Thanks
    dodger1
    Where does a long term unemployed person get £38,000 from to repay a loan?
  • Hammyman
    If the £38k was to replace a roof falling off then thats OK. If the £38k was to build an extension, thats not OK.
    • rogerblack
    • By rogerblack 1st Jun 11, 4:24 PM
    • 9,285 Posts
    • 9,443 Thanks
    rogerblack
    Hello,
    My friend has been summoned to answer charges that he has knowingly got rid of notional capital in order to gain welfare benefit.
    Originally posted by Dellgirl101
    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.
  • NASA
    It sounds like a hastily thought up excuse.
  • 33degrees
    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.
    Originally posted by rogerblack
    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.
    • woodbine
    • By woodbine 1st Jun 11, 10:39 PM
    • 18,345 Posts
    • 24,709 Thanks
    woodbine
    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
    • rogerblack
    • By rogerblack 1st Jun 11, 11:33 PM
    • 9,285 Posts
    • 9,443 Thanks
    rogerblack
    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
    Originally posted by woodbine
    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.
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,443Posts Today

6,591Users online

Martin's Twitter
  • RT @PapaSlavs: @MartinSLewis hi, how much per month should I typically charge my daughter board & lodgings now she's left uni and become an?

  • RT @EssexHebridean: 13 years, 2 months and 6 days after taking it out, we've just paid the final lump sum off our mortgage. #MortgageFree @?

  • Many first time buyers panicked about Help to Buy mortgage guarantee ending, here's my video on what it really mean? https://t.co/uGD6sG4hvl

  • Follow Martin