Help with JSA & Deprivation of Capital Question

chickmug

I hope you guys can help me on this one with a man that used to do some work for me before I retired. Here is the scenario: -

Man 62 nearly 63, pension £600 p.m. cash taken out of pension £50,000 in savings account in joint names. Was self employed for 15 years but had to stop due to ongoing health problems with M.E finishing at the end of the last tax year March 2009.

Lost employed job some years ago and was forced to sell house and has only ever been able to work part time. So when house prices shot up not able to get back on ladder plus has been subsidising their living costs from proceeds of sale but most of the money now gone. Other recent health conditions meant he was forced to cease work completely.

Wife 61 state pension £500 p.m. tried looking for a job but looking very difficult probably due to age. Was helping husband run his business on the phone, accounts & paperwork so when he had to stop she was also forced to stop.

Neither have claimed any benefits and they are living in rented but finding having to continually move as even long term rentals seem to stop after a year or so. The current rent has gone up to £600. They are both stressed at the though of another move and the lump sum from the pension just dwindling away.

My idea was to look at shared ownership housing where you can get a 25% share in some parts of the country for below £30,000 which they have with the rest on a maximum of £200 p.m. rental. So then even with their reduced income they would stand a chance of getting by.

So the help I need is: -

If they spend say £35,000 on a SO house with legal costs, etc would this be seen, at any future point, as deliberate deprivation of capital.

He officially stopped self employment this tax year ending March 2009 and feels he can't claim Job Seekers as he has not paid the right stamp and has too much in savings any guidance on this aspect.

Any help at all would be so useful.

alwaysonthego_2

Hi,

yes he would be depriving himself of his capital in order to claim benefits and will still be treated as having the money even though he wouldn't.

He is correct, he would not be entitled to CBJSA because 1) he will not have paid the correct NI conts and 2) He is not looking for a job if he is retired. At his age they should be claiming pension credits. Try www.entitledto.co.uk for a rough guide on his entitlements.

chickmug

alwaysonthego wrote: »

Hi,

yes he would be depriving himself of his capital in order to claim benefits and will still be treated as having the money even though he wouldn't.

He is correct, he would not be entitled to CBJSA because 1) he will not have paid the correct NI conts and 2) He is not looking for a job if he is retired. At his age they should be claiming pension credits. Try www.entitledto.co.uk for a rough guide on his entitlements.

He really thinks he will still be able to get a part job or some part time work but I have my doubts. I would hate to push him towards spending the £35,000 to find I have disadvantaged him in some way. I have ran through the entitled to but no means tested benefits whilst they have the lump sum.

Do you know if the deprivation of capital rule has a fixed period after which it would be ignored as surely it can't last for years?

alwaysonthego_2

chickmug wrote: »

He really thinks he will still be able to get a part job or some part time work but I have my doubts. I would hate to push him towards spending the £35,000 to find I have disadvantaged him in some way. I have ran through the entitled to but no means tested benefits whilst they have the lump sum.

Do you know if the deprivation of capital rule has a fixed period after which it would be ignored as surely it can't last for years?

Have I got this correct?

They have £35000 savings

She gets a pension of £500 per month

Is there any other income?

If so then they will be entitled to a small amount of guaranteed penison credits which means that they would get full LHA.

chickmug

Hi Alwaysonthego

Financial details in my first post.

chickmug

Just to bring this to a conclusion.

Does anyone have any idea on the 'deprivation of capital' rules if there is any time limit to which the rules apply. Or if there may be a sliding scale applied?

Pepzofio

AFAIK, the deprivation of capital rule only applies if your main reason for disposing of the capital was to increase your entitlement to benefits - even if it can be shown that you knew about the capital limits this is not enough - it has to be shown that you intended to obtain/increase your benefit. I don't have any direct experience of the situation you describe, but I would have thought that buying into a s/ownership place to obtain some security of tenure in your old age (especially with a history of ill health) is a valid use of capital...?

I would be inclined to speak to CAB or even just ask DWP for clarification, as I would be very surprised if they considered it deprivation of capital in your friend's case. (Although if his income is too high for benefits anyway it probably doesn't really matter!)

Alternatively, has he looked to see if there are any intermediate rent properties available in his area? A lot of HAs are converting unsold S/O stock to intermediate rent due to the current climate. It costs between market & social rent, but would offer better security of tenure to private renting, in that although it may still be on an AST, the HA would not be looking to sell up so tenant could be reasonably confident that they had a home for as long as they wanted. Not sure what eligibility criteria is, but worth a look.

To answer your question re how long the deprivation rules last, if benefit has been refused altogether due to notional capital (i.e. capital that you have deliberately disposed of) then your notional capital is reduced by the amount of benefit you would have been entitled to had it not been for the notional capital.

Perr

If the Man has £600 month and his wife has £500 a month this being £275 a week I would not have thought they would get much help with H/B as pension credit for a couple is about £195 and the law says this is enough to live on .

Perr

I think as Pepzofio says i think a H/A property may be a good idea most have purpose built properties for the over 60s which from the ones I have seen are very nice and also the rents are much lower than private lets. ( sorry about this line dont know why it has done that)

chickmug

Thanks perr and Pepzofio

All good points and I have pased all the information on to the couples daughter who will now be moving matters forward. They never wanted their family to know of their plight but have talked to them, for the first time, in recent days.

Hopefully, with help off this and the home buying board, the daughter who seems very bright can sort things out now. I have given her loads of information, web links and HO contact details so hoping they will get going and keep me in the picture.

NASA_2

'Plight'

I wish I was in a position where I had that much capital I had to deprive myself of it in order to claim benefits.