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
    • Ponsienella
    • By Ponsienella 22nd Sep 16, 2:06 PM
    • 80Posts
    • 19Thanks
    Ponsienella
    ESA & Deprivation of capital
    • #1
    • 22nd Sep 16, 2:06 PM
    ESA & Deprivation of capital 22nd Sep 16 at 2:06 PM
    My brother is on ESA (I've been told by JSA+ it is part contribution-based and part Income-based) and has been off work sick long term. His employer was going to cease his employment on the grounds of capability to do the role and started the process by contacting his Psychiatrist for a report.
    However, this also coincided with his employer undergoing a national process of reorganisation within the department he works in and they offered him redundancy instead. My brother has accepted this as it may look better on his c.v. in the future if he becomes well enough to work again.

    He has just received a payslip for the redundancy payment which is around £4,700 and comprises holiday pay due, redundancy plus and ex-gratia payment. I now have to let JSA+ know about this in terms of it being income and because it takes his capital up to nearly £11,000.

    I am however wondering if he can spend some of the money on himself or whether being on ESA doesn't allow for that?
    He is quite worried that he only recently took out an over 50s Life Assurance Policy as it only covers about £2,000 towards the cost of a funeral and he saw an item in a newspaper about the average cost of one being much higher so he is worried he doesn't have enough cover. I was wondering whether he could actually pay for his funeral (I'm not sure he wants to do this but thinking of suggesting it to him) to get it at today's prices so he doesn't have to worry about this in future. He has mental health issues and anxiety so I was trying to work out how to take as many worries as I can off his mind.

    Also could he spend some money on himself for a week's holiday in this country? He is in his early 60s and has probably only had 2 or 3 holidays in his adult life. I feel a change of scenery for a week might help him focus on something other than his depressed state.

    He receives PIP as well. He has always been frugal with his money and I try to get him to spend more on nutritious food but his illness means he sometimes hardly eats so buys very little food. Hence the reason why, apart from his redundancy payment, his money has built up.

    He could do with some new furniture too as he has never had a new suite and doesn't even own things like a bedside table or coffee table.

    I wouldn't want him getting into trouble for Deprivation of Capital.

    Please don't respond if you are going to say anything unpleasant about having his cake and eating it from the benefits system. It isn't him asking. It's me. He isn't well enough to even think of such things.

    Thank you in advance for any help. I have to go out for a while this afternoon but will check in later to see if there have been any responses.
Page 1
    • Bogalot
    • By Bogalot 22nd Sep 16, 2:27 PM
    • 173 Posts
    • 327 Thanks
    Bogalot
    • #2
    • 22nd Sep 16, 2:27 PM
    • #2
    • 22nd Sep 16, 2:27 PM
    The things you are suggesting would be fine as long as they are not excessive, a cheap week at the seaside and a few bits of not too expensive furniture are regular spending.

    If you want to know the average cost of a funeral then ask a local undertaker. They don't have to cost more than a few thousand, they don't even have to cost that much. I wouldn't invest in some overpriced policy.

    On a personal note, if he hasn't suggested any of these things, maybe leave him be until he asks? He probably doesn't care if he has a bedside table or not, he might like his current sofa. When you're in the midst of a mental health episode it can be pretty overwhelming when people start pushing ideas on you, especially ones that involve making decisions, however well intentioned they are.
    • Alice Holt
    • By Alice Holt 22nd Sep 16, 2:48 PM
    • 449 Posts
    • 412 Thanks
    Alice Holt
    • #3
    • 22nd Sep 16, 2:48 PM
    • #3
    • 22nd Sep 16, 2:48 PM
    It's likely that the holiday pay will be treated as income not capital.
    This will reduce the income-based element of his ESa for the period to which this relates, but not the contribution-based element.

    Also the contribution-based ESa & PIP will not be affected by any savings.

    The income-based ESa element will be affected by savings (including redundancy). It reduces by £1 for every £250 of savings above £6k. The cut off point above which means tested benefits end is £16k in savings.
    You may wish to use one of the benefit calculators to see the impact on his combined (CB & IB ) ESa payments.

    I very much doubt if replacing furniture and fittings (sensibly) would be viewed as deprivation of capital. If it were then you could appeal that decision with a reasonable liklihood of success.

    Funeral plans may be less clear cut, but I think the DWP would have a difficult case to argue that it was deprivation. The essence of deprivation of capital, is that:
    "whether they have deliberately deprived themselves of that money in order to secure, or increase, entitlement to benefits."

    If your brother receives HB or CTr , he will also need to inform the local authority.

    Do you know how much of the ESa is income-based?
    I'm assuming this is likely to be the Enchanced Disability Premium of £15.75 and possibily the £61.85 Severe Disability Premium, if no-one claims Carers Allowance for him?

    I would be careful to keep copies / notes of all correspondence / phone calls with the DWP & the LA.
    Your brother does not want to face an overpayment demand in the future due to official error.
    Do keep proof that the DWP / LA were notified of any change in circumstances.
    Last edited by Alice Holt; 22-09-2016 at 5:27 PM.
    • Sambella
    • By Sambella 22nd Sep 16, 3:17 PM
    • 58 Posts
    • 55 Thanks
    Sambella
    • #4
    • 22nd Sep 16, 3:17 PM
    • #4
    • 22nd Sep 16, 3:17 PM
    The rate of benefit deduction will be £1 for every £250 as stated above. He will be £5k over the limit which will be £20 per week. Not so bad.

    He will be allowed to spend some as time goes by as long as it's nothing they consider excessive so once he is back to the limit or even if he spends £500 then it can be adjusted.

    Who knows what they consider excessive?
    • sportsarb
    • By sportsarb 22nd Sep 16, 5:32 PM
    • 503 Posts
    • 407 Thanks
    sportsarb
    • #5
    • 22nd Sep 16, 5:32 PM
    • #5
    • 22nd Sep 16, 5:32 PM
    Didn't PILON/Holiday Pay stop being taken as income about 10 years ago?

    If comprising part of a termination payment they should be treated as capital.
    • Xbigman
    • By Xbigman 22nd Sep 16, 11:05 PM
    • 2,734 Posts
    • 1,018 Thanks
    Xbigman
    • #6
    • 22nd Sep 16, 11:05 PM
    • #6
    • 22nd Sep 16, 11:05 PM
    How about paying any redundancy payment into his pension fund (if he has one).




    Darren
    Xbigman's guide to a happy life.

    Eat properly
    Sleep properly
    Save some money
    • Ponsienella
    • By Ponsienella 23rd Sep 16, 5:51 PM
    • 80 Posts
    • 19 Thanks
    Ponsienella
    • #7
    • 23rd Sep 16, 5:51 PM
    • #7
    • 23rd Sep 16, 5:51 PM
    The things you are suggesting would be fine as long as they are not excessive, a cheap week at the seaside and a few bits of not too expensive furniture are regular spending.

    If you want to know the average cost of a funeral then ask a local undertaker. They don't have to cost more than a few thousand, they don't even have to cost that much. I wouldn't invest in some overpriced policy.

    On a personal note, if he hasn't suggested any of these things, maybe leave him be until he asks? He probably doesn't care if he has a bedside table or not, he might like his current sofa. When you're in the midst of a mental health episode it can be pretty overwhelming when people start pushing ideas on you, especially ones that involve making decisions, however well intentioned they are.
    Originally posted by Bogalot
    Thank you for your response.

    I'm not thinking about him taking out an expensive funeral plan but just paying for his funeral at today's prices as he won't be able to save additional funds at the same rate as they are going up. I have now just mentioned it to him in passing but I'm not pushing it on him.

    I understand what you mean about overwhelming him about the furniture. His second hand sofa is alright and he wants to keep it but he does need help with his storage as he has stuff all over his bedroom floor and his bed. I have no idea how he manages to get in it to sleep.

    Thanks for reminding me though as it is good to get the views of others who understand depression.
    • Ponsienella
    • By Ponsienella 23rd Sep 16, 6:04 PM
    • 80 Posts
    • 19 Thanks
    Ponsienella
    • #8
    • 23rd Sep 16, 6:04 PM
    • #8
    • 23rd Sep 16, 6:04 PM
    It's likely that the holiday pay will be treated as income not capital.
    This will reduce the income-based element of his ESa for the period to which this relates, but not the contribution-based element.

    Also the contribution-based ESa & PIP will not be affected by any savings.

    The income-based ESa element will be affected by savings (including redundancy). It reduces by £1 for every £250 of savings above £6k. The cut off point above which means tested benefits end is £16k in savings.
    You may wish to use one of the benefit calculators to see the impact on his combined (CB & IB ) ESa payments.

    If your brother receives HB or CTr , he will also need to inform the local authority.

    Do you know how much of the ESa is income-based?
    I'm assuming this is likely to be the Enchanced Disability Premium of £15.75 and possibily the £61.85 Severe Disability Premium, if no-one claims Carers Allowance for him?

    I would be careful to keep copies / notes of all correspondence / phone calls with the DWP & the LA.
    Your brother does not want to face an overpayment demand in the future due to official error.
    Do keep proof that the DWP / LA were notified of any change in circumstances.
    Originally posted by Alice Holt
    Thank you for your reply.

    I will be let the council know of this as my brother does receive full Housing Benefit and a Council Tax Reduction.

    I don't know how much of his ESA is income-based. I am only aware it is part contribution and part Income-based from a telephone conversation I had with the benefit centre. He is only getting £92.53 ESA at the moment but it is just coming up to 3 months that he has been on it and we are waiting for something to say whether he will be in work-related or Support group. I sent so much documentation from his Mental Health Team and Occupational Health from work that I'm pretty sure he'll be placed in Support group as he was last year. (There is no way he is fit to work at the mo).

    I do scan everything that is sent to the Council and Benefit Centre and keep a record of the detail of all telephone calls.

    Thanks.
    • Ponsienella
    • By Ponsienella 23rd Sep 16, 6:07 PM
    • 80 Posts
    • 19 Thanks
    Ponsienella
    • #9
    • 23rd Sep 16, 6:07 PM
    • #9
    • 23rd Sep 16, 6:07 PM
    The rate of benefit deduction will be £1 for every £250 as stated above. He will be £5k over the limit which will be £20 per week. Not so bad.

    He will be allowed to spend some as time goes by as long as it's nothing they consider excessive so once he is back to the limit or even if he spends £500 then it can be adjusted.

    Who knows what they consider excessive?
    Originally posted by Sambella
    Thank you for your reply.

    Do you know how often he would be expected to notify the Benefit Centre and Council of any reductions in his capital caused by his spending?
    • Ponsienella
    • By Ponsienella 23rd Sep 16, 6:10 PM
    • 80 Posts
    • 19 Thanks
    Ponsienella
    How about paying any redundancy payment into his pension fund (if he has one).




    Darren
    Originally posted by Xbigman
    He has a very small Occupational Pension which he will receive when he is 65 from a former employer but he only took out a Pension with his last company about 2 years ago. I think he's only paid in about £20! LOL.

    Good idea though.
    • Bananas123
    • By Bananas123 25th Sep 16, 6:50 AM
    • 176 Posts
    • 88 Thanks
    Bananas123
    i was asking about the limits a bit ago, as like to save money and needed to sell some things.

    anyhoo, people just advised spend it basically.... on commodities what not, new telly etc etc.

    think it is only deprivation, with intent to de-fraud.

    i know you are not allowed to invest the money (i.e. no buying gold / antiques etc), but "disposing" of it is fine i think, i think some people give it to charity also.

    ....i don't have alot of money left over though each fortnight though.

    regards.
    • tomtom256
    • By tomtom256 25th Sep 16, 7:25 AM
    • 715 Posts
    • 1,359 Thanks
    tomtom256
    i was asking about the limits a bit ago, as like to save money and needed to sell some things.

    anyhoo, people just advised spend it basically.... on commodities what not, new telly etc etc.

    think it is only deprivation, with intent to de-fraud.

    i know you are not allowed to invest the money (i.e. no buying gold / antiques etc), but "disposing" of it is fine i think, i think some people give it to charity also.

    ....i don't have alot of money left over though each fortnight though.

    regards.
    Originally posted by Bananas123
    Do not give it to charity, that is deprivation as there is no need to do this.

    Spending on necessary items and/or small holidays, house repairs etc will be acceptable.

    Your brother may likely be asked for receipts for any items purchased etc so make sure he keeps them.
    • Bananas123
    • By Bananas123 25th Sep 16, 8:06 AM
    • 176 Posts
    • 88 Thanks
    Bananas123
    sorry i was just musing,

    don't think the OP will be donating 5k to a rabbit sanctuary etc.... really, because that is obviously, deprivation...

    i will wear a bunny suit and eat carrots, for much much less, if you are interested op ???.

    more so the people offsetting nominal money / good will / work around.

    ...i will go.
    • Ames
    • By Ames 25th Sep 16, 2:00 PM
    • 15,206 Posts
    • 25,758 Thanks
    Ames
    There is (or definitely used to be) a yearly amount that can be given to charity without it being deprivation of capital.
    Unless I say otherwise 'you' means the general you not you specifically.


    Recent reads: Everyday Sexism by Laura Bates. Headscarves and Hymens by Mona Eltahawy. Justice - What is the Right Thing To Do by Michael Sandel. Is Multiculturalism Bad For Women by Susan Moller Okin.
    • micky2phones
    • By micky2phones 25th Sep 16, 5:05 PM
    • 227 Posts
    • 197 Thanks
    micky2phones
    Thank you for your reply.

    Do you know how often he would be expected to notify the Benefit Centre and Council of any reductions in his capital caused by his spending?
    Originally posted by Ponsienella
    Hi, i think this should be a question to ask at the start.

    Ask the name of this person and maybe you can deal with this person
    each time you amend the total.
    • PersianCatLady
    • By PersianCatLady 28th Sep 16, 3:53 PM
    • 6 Posts
    • 0 Thanks
    PersianCatLady
    There is (or definitely used to be) a yearly amount that can be given to charity without it being deprivation of capital.
    I think that it is actually a bit wrong to give money away on purpose just so you can stay entitled to benefits.
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

4,130Posts Today

7,767Users online

Martin's Twitter
  • Today's twitter poll: If a cheap clothing store admitted under 12s in foreign factories made their clothes would it stop you buying?

  • RT @toes_pointy: @MoneySavingExp @MartinSLewis Feeling smug. Used MSE sky code to change bband provider, saved £150 & got £50 free credit.?

  • MSE weekly email: Ending - Brit Gas £300/yr off & free £30M&S, Vax 75%off, £15off Tesco Wine, £64/yr bband, £8 duvet https://t.co/bS4J70hBbx

  • Follow Martin