deprivation of capital paying off mortgage

Francofile2

I was diagnosed with cancer in Feb 2009 and claimed on a decreasing term mortgage life policy that was taken out in 2002 specifically to pay off part of my mortgage should I die or become critically ill. The policy paid out and I paid off part of my mortgage as planned. As a result, my wife and I reduced our monthly outgoings.

During the process of receiving the pay-out I had more than £16,000 in capital so was denied claiming certain benefits as I had apparently 'deprived' myself of capital by choosing to pay off a large part of the mortgage instead of living on the proceeds. I have a letter from my IFA written in 2002 clearly stating the policy's objective was to pay off the mortgage and the policy is called a 'Mortgage Life Insurance Policy'.

When I took out the policy in 2002, I would have had no idea whatsoever that I would be expected to live on the proceeds instead of paying off my mortgage with the proceeds should I become critically ill. I have taken the case to a tribunal and the hearing takes place on 14th December.

I will be representing myself and would be grateful to anybody who can give me any advice. Many Thanks.

[Deleted User]

Deprivation of capital is never an easy one,as it seems that many dwp decison makers have their own idea of how to enforce the rules,have you sought advice from cab or welfare rights?

munchings-n-crunchings

Phone Welfare Rights and get an appointment. They will be able to advise you, and if they have someone available, they can accompany you to the tribunal.

WR are part of your County Council, and their service is free.
As this is a benefits related issue, it should be in their area of expertise.

Regards
Munchie.

GlasweJen

Had the money went direct from the insurers to the mortgage company (as some policies do) this would not have been an issue. Because you recieved the cash and were under no legal obligation to send it onto the mortgage company you will be seen as intentionally depriving yourself of capital. Without seeing the documents I can only make an educated guess on what's happened but it sounds like your policy was for a cash sum towards your mortgage and not to specifically pay the mortgage off, the wordings can be quite misleading. I'm sorry but I don't think you stand much chance of winning at this tribunal. Have you seen a lawyer about this? You can get a half hour appointment free and they may be able to read the details and tell you more about the type of policy you actually have.

fluffymovie

Deprivation of capital is very tricky to prove successfully. The key question we have to look at is "Did you deprive yourself of capital to enable you to claim benefits?" from the sound of your case, you spent the money to ensure that you had a safe home during a time of treatment and following a scary diagnosis.

I must say that I am a bit surprised that the council are taking this to tribunal but just be as honest as you can, explain why you paid off the mortgage rather than lived on the proceeds and I wish you the best of luck.

Francofile2

Yes, I have a representative at local CAB but they share your view of how arbitary the decision making process is. It was them and to a degree Macmillan Trust that suggested that I just go and put forward my case and keep it simple. I have no idea if this is the best way forward but I'll just have to give it my best shot. Many thanks for your response by the way.

Francofile2

I have been advised by CAB but I haven't spoken with Welfare Rights so will get straight onto that. Many thanks for feedback.

Francofile2

GlasweJen wrote: »

Had the money went direct from the insurers to the mortgage company (as some policies do) this would not have been an issue. Because you recieved the cash and were under no legal obligation to send it onto the mortgage company you will be seen as intentionally depriving yourself of capital. Without seeing the documents I can only make an educated guess on what's happened but it sounds like your policy was for a cash sum towards your mortgage and not to specifically pay the mortgage off, the wordings can be quite misleading. I'm sorry but I don't think you stand much chance of winning at this tribunal. Have you seen a lawyer about this? You can get a half hour appointment free and they may be able to read the details and tell you more about the type of policy you actually have.

You have made a very good point and CAB/MacMillan should have advised me to pay the insurance money direct even though some went to Barclays to pay off a secured loan and the majority to Woolwich to pay off part of the mortgage.You are also right that even though the policy is called a 'Mortgage Life Policy', I could have used the capital for other purposes. However, a quote from the letter written in 2002 from my IFA explains "You are looking to ensure that in the event of your death or suffering a critical illness that your mortgage will be paid off". I just have to hope that the judge will see that all I was doing was keeping to my original intentions and didn't act in the way I did just to claim benefits. Many Thanks.