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  • FIRST POST
    • gray1404
    • By gray1404 4th Dec 17, 1:26 AM
    • 88Posts
    • 6Thanks
    gray1404
    What can money/savings be spent on for ESA purposes?
    • #1
    • 4th Dec 17, 1:26 AM
    What can money/savings be spent on for ESA purposes? 4th Dec 17 at 1:26 AM
    Family member has recently received backpayment of Council Tax due to council tax exemption being applied. Is there any guidance on what he can and cannot spend it on so that it won't become regarded as savings for the purposes of Income based ESA?

    Thanks.
Page 2
    • TELLIT01
    • By TELLIT01 6th Dec 17, 8:13 AM
    • 4,229 Posts
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    TELLIT01
    I would strongly suggest ignoring Baza52's very bad advice. Spending money quickly after you receive it does not mean it can't be considered deprivation of capital. I would go so far as to say that anybody discovered to be doing what Baza52 suggests, drawing large amounts of cash in order to hide it and continue to claim benefit, is likely to be charged with benefit fraud.
    • pmlindyloo
    • By pmlindyloo 6th Dec 17, 8:37 AM
    • 10,898 Posts
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    pmlindyloo
    Since this back payment of council tax is disregarded for a year I really do not think that spending it over that one year period can be seen as deprivation of capital if it is used for reasonable purchases.
    • epitome
    • By epitome 6th Dec 17, 10:14 AM
    • 3,018 Posts
    • 1,833 Thanks
    epitome
    It could be disregarded indefinately on the current ESA claim.

    But whether it can be spent willy nilly during a "disregard for a year" period is not known to be a fact yet.
    • gray1404
    • By gray1404 6th Dec 17, 10:31 AM
    • 88 Posts
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    gray1404
    Under what circumstances could it be disregarded indefinitely? It was not due to an official error you see. Basically we discovered he was entitled to council tax exemption so applied for it and requested backdating, as he'd been paying council tax all this time.

    If it could be disregarded indefinitely that would be perfect.
    • baza52
    • By baza52 6th Dec 17, 10:32 AM
    • 2,055 Posts
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    baza52
    I would strongly suggest ignoring Baza52's very bad advice. Spending money quickly after you receive it does not mean it can't be considered deprivation of capital. I would go so far as to say that anybody discovered to be doing what Baza52 suggests, drawing large amounts of cash in order to hide it and continue to claim benefit, is likely to be charged with benefit fraud.
    Originally posted by TELLIT01
    Its not fraud.

    Are you saying i am wrong about being able to spend income on what you want?
    Who said anything about hiding money?
    • TELLIT01
    • By TELLIT01 6th Dec 17, 1:03 PM
    • 4,229 Posts
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    TELLIT01
    Its not fraud.

    Are you saying i am wrong about being able to spend income on what you want?
    Who said anything about hiding money?
    Originally posted by baza52
    I acknowledge that I misread your previous post. You can spend your benefit as you wish and can withdraw it as soon as it hits your account. Where I still maintain you are wrong is in your assertion that you can effectively give away your benefit payment and spend savings in order to reduce capital in order to maintain benefit entitlement. That can still be treated as deprivation of capital despite the fact that you seem to have got away with doing precisely that.
    Getting away with something doesn't mean that it's OK to do it. Use the analogy of speeding, lots of people do it and many don't get caught. That doesn't prevent people who are caught from being prosecuted.
    • baza52
    • By baza52 6th Dec 17, 1:42 PM
    • 2,055 Posts
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    baza52
    You might not like the idea of someone giving benefits away but its perfectly legal to do anything you want with your income.
    It is also perfectly legal to use your savings to support yourself.

    It is just as moraly right as someone paying excess salary into a pension pot to avoid paying higher rate tax on it.

    Remember this site is about entitlement and not policy.

    Your speeding analogy does not compare in this case as speeding is against the law whereas doing what i suggest is perfectly legal.
    • baza52
    • By baza52 6th Dec 17, 1:53 PM
    • 2,055 Posts
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    baza52
    Just to add for the OPs benefit,

    If you do decide to go down this route i would suggest having all benefits paid into 1 account and a seperate account for capital.
    This way the account the income goes into will always be at £0 if you draw it out when it is paid and then all the other capital will be in the other account and that is the account you pay all bills, shopping etc from.
    • Mersey
    • By Mersey 6th Dec 17, 7:24 PM
    • 1,630 Posts
    • 780 Thanks
    Mersey
    It still needs to be reported if it takes savings over the £6k limit. If DWP don't know the source it can create problems further down the line.
    Originally posted by TELLIT01


    I think the reason for the correction, was because you actually said it still needs to be reported even if savings below £6k.


    Although as I commented on the OP's other thread to CIS re data sharing: why don't Councils simply report such backpayments as a matter of course to the DWP, rather than leaving claimants to waste time and the cost of doing so. It would be bizarre in the extreme if one arm of Govt (DWP) launched a fraud investigation due a claimant receiving redress from another arm of Govt (local govt).
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
    • Mersey
    • By Mersey 6th Dec 17, 7:29 PM
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    • 780 Thanks
    Mersey
    It was not due to an official error you see.
    Originally posted by gray1404


    It's arguable that it was, as councils have a duty in that regard and the smi rebate is a statutory right.


    As you may have seen on the Martin Lewis Money Show last week, even though a council had arranged eg a care package and so on, they had failed to action the smi rebate. Although I understand the LA simply reimbursed - on top of the refund of Council Tax paid - £25 as a gesture to cover the cost of the unnecessary telephone calls, rather than admitting maladministration.
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
    • TELLIT01
    • By TELLIT01 6th Dec 17, 8:53 PM
    • 4,229 Posts
    • 4,401 Thanks
    TELLIT01

    Although as I commented on the OP's other thread to CIS re data sharing: why don't Councils simply report such backpayments as a matter of course to the DWP, rather than leaving claimants to waste time and the cost of doing so.
    Originally posted by Mersey
    It shocked me when I started working at DWP to discover that there is little in the way of formal communication between what could broadly be called government departments, whether that be at local or national level.
    It should be possible for a change to be reported to one body and that information to automatically be fed through to all other interested parties. Sadly that isn't the case and it doesn't look as if it ever will be.
    Until and unless that does happen, it remains the responsibility of the individual to report everything umpteen times.
    • gray1404
    • By gray1404 8th Dec 17, 3:33 AM
    • 88 Posts
    • 6 Thanks
    gray1404
    It is a disabled family member of mine - for whom I have supported - who has received the backpayment of benefit (see opening post) NOT myself.
    Last edited by gray1404; 08-12-2017 at 11:24 PM.
    • gray1404
    • By gray1404 8th Dec 17, 3:52 AM
    • 88 Posts
    • 6 Thanks
    gray1404
    Could I please get some clarification on how this might be an official error. Basically my family member had been paying council tax themselves for years. Recently we discovered that he was entitled to an exemption on the basis of Severe Mental Disorder and this was accepted (and backdated most of the period applied for).

    Would the council say that because we only just applied for it then it was no an official error because we didn't apply sooner?

    It would be really helpful if we could get this regarded as an official error and thus the amount disregarded for ESA capital purposes. How would one go about getting this regarded as an official error?

    The only other thing I would say is that he has been in receipt of Housing Benefit a couple of years now. They are aware he receives ESA Support Group and the higher rate of PIP too. As part of the Housing Benefit claim they rejected the backdating request. In response to that the Community Mental Health Team sent a letter to them confirming his conditions and went into detail on how this effects his life and ability to manage. They asked that they council looked at the decision not to backdate again. They saw sense and overturned their decision.

    Would that be enough to claim that they, at that point should have stopped charging him Council Tax and applied the exemption?

    This is a key issue here because they have only backdated to 1 April 2011. We actually requested 12 months further as this was the date he started paying Council Tax. They have refused this for the following reason: -
    The Council will only backdate a discount 6 years. The reason for this is because Council Tax bills were originally accompanied by information booklets containing details relating to reductions and now the information is readily available on the council's website.

    They made the above decision on 11 October 2017. We do not know if we could appeal again this to the tribunal or not. I think there is a strong case. However it might put him in a worse situation for ESA purposes if he ends up with more capital to have to deal with.

    I know you only have two months to take a council tax decision to the tribunal so will have to decide over the weekend if we want to do this. I believe it can be done online.

    I am actually really finding it hard to come up with valid reasons for the appeal to be honest. I also wonder if it is worth writing back to the council at the same time saying we have appealed to the tribunal and asking that they also look at their decision again in case they are willing to overturn it. I guess I would need some compelling reasons as to why though.
    Last edited by gray1404; 08-12-2017 at 3:59 AM.
    • epitome
    • By epitome 8th Dec 17, 10:14 AM
    • 3,018 Posts
    • 1,833 Thanks
    epitome
    The closest I can get to council tax rebate being disregarded at all is this

    http://www.legislation.gov.uk/uksi/2008/794/schedule/9/made

    No.11
    ignore a) it does not come under that
    b) any income related benefit

    it does not say council tax reduction. so i would first get it confirmed that it is included to be disregarded for a year. then move on to official error

    which you can see is covered by

    an official error as defined in regulation 1(3) of the Social Security and Child Support (Decisions and Appeals) Regulations 1999; and

    which i dont have time to look at
    • Mersey
    • By Mersey 8th Dec 17, 1:35 PM
    • 1,630 Posts
    • 780 Thanks
    Mersey
    Could I please get some clarification on how this might be an official error.

    Would the council say that because we only just applied for it then it was no an official error because we didn't apply sooner?

    It would be really helpful if we could get this regarded as an official error and thus the amount disregarded for ESA capital purposes. How would one go about getting this regarded as an official error?

    The only other thing I would say is that he has been in receipt of Housing Benefit a couple of years now. They are aware he receives ESA Support Group and the higher rate of PIP too. As part of the Housing Benefit claim they rejected the backdating request. In response to that the Community Mental Health Team sent a letter to them confirming his conditions and went into detail on how this effects his life and ability to manage. They asked that they council looked at the decision not to backdate again. They saw sense and overturned their decision.

    Would that be enough to claim that they, at that point should have stopped charging him Council Tax and applied the exemption?
    Originally posted by gray1404


    I think the reason that I'd certainly regard it as the Council's error - and the point Martin made on the MLMS - was that there is no need to 'apply' for the smi rebate. The problem is that some Councils are both failing to list the rebate at all on their sites or, even when the LA has arranged carers and so on, they still haven't actioned the smi rebate.


    [But I can see why Councils don't readily admit that it's 'official error' as this would be maladministration and so they'd potentially have to also compensate residents on top]


    I don't see a need to appeal the decision - unless you believe their £5k calculation is wrong.


    Unless you want to pursue the 7th year - for that I think CIS linked to the Tribunal decision which allows backdating to go back further than the usual 6 years (the norm for civil claims).
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
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