Deprivating Of Capital??

JustMe**_4-2

Hi all, new to forum and looking for a little help.

I am currently on single parent benefits (please dont judge) and due some inheritance in a couple of months (£20,000)
I understand that I will need to inform DWP and come off all benefits which I am fine with, my worry is what can/can't I spend my money on without getting in trouble regarding deprivating of capital?
I wish to pay off my £6,000 debts and buy a new car and also put some money into my sons account for the future. This will leave me with about £5,000 and I understand this is the limit so I can then claim benefits again until I go back to work next year?
What exactly counts as Deprivating of Capital?

Thanks

Jomo

I'm sure there are others who know more than I but I would guess that buying a 'new' car wouldn't sit well with the DWP when a second hand one would suffice.

PasturesNew

It is where you have spent the money, to bring your savings under the limit for being able to get benefits.

The term is: Deprivation of Capital

You are spending the money on non-essentials, then claiming benefits because you don't have the money any more.

You are effectively giving away the money, buying a new car, paying for that holiday/sofa you had in the past ..... then asking the taxpayers to cover your living costs as you've spent the money you could have used to live on.

karenx

Also paying £6000 of debts isnt a necessity so that will be looked upon as you still had the money. To start with your IS will stop and also any housing and council tax benefit you recieve.
A second hand car will be ok to get, and paying off your debts isnt a priority as you can pay your monthly payment as normal. And if your name is on your sons account then it will be looked at as you still have acess to the money so its still included in your savings amount.
So could be quite a while till you got to the point of getting full IS etc again

alwaysonthego_2

JustMe** wrote: »

Hi all, new to forum and looking for a little help.

I am currently on single parent benefits (please dont judge) and due some inheritance in a couple of months (£20,000)
I understand that I will need to inform DWP and come off all benefits which I am fine with, my worry is what can/can't I spend my money on without getting in trouble regarding deprivating of capital?
I wish to pay off my £6,000 debts and buy a new car and also put some money into my sons account for the future. This will leave me with about £5,000 and I understand this is the limit so I can then claim benefits again until I go back to work next year?
What exactly counts as Deprivating of Capital?

Thanks

Unless your debts are priority and you are in severe arrears then paying off your debts could be seen as deprivation of capital.

Putting money in your son's bank account would be seen as deprivation of capital.

Buying the car - depends on DM.

You should check with benefits agency to ask them before spending the money otherwise you could be still treated as having the money [notional income].

No-one can give you a definite answer just their opinion.

cattie

Putting money into your son's or any other relative or friends account will be considered deprivation of capital. As will buying a brand new car and repayment of debts. Debts are expected to run their contracted term as far as DWP are concerned & not paid up early, resulting in you still having an entitlement to means tested benefits.

An inheritance or any other windfall amount that takes you over the benefit threshhold is expected to be used in moderation & DWP have a formulae that they use, which estimates the amount of money each week/month you can reasonably be expected to use for day to day living expenses.

Luxury holidays, expensive or unecessary furniture or items for the home as well as expensive new clothes & new cars are all considered deprivation of capital spends. If in any doubt you seek advice from DWP before spending any money & falling foul of the rules.

JustMe**_4-2

Can I ask what would happen if I was found to be Deprivating Capital by buying a car and paying off my debts? These debts are not loans, they are debts that are now in the hands of debt collectors and im facing court hence why I want to be debt free!
Do I have to provide receipts etc if I want to reclaim once under £6000 or do they look into my bank account?
I dont want to get in trouble thats all but I want to pay off my debts and buys things to make mine and my sons life more comfortable

viktory

JustMe** wrote: »

Can I ask what would happen if I was found to be Deprivating Capital by buying a car and paying off my debts? These debts are not loans, they are debts that are now in the hands of debt collectors and im facing court hence why I want to be debt free!
Do I have to provide receipts etc if I want to reclaim once under £6000 or do they look into my bank account?
I dont want to get in trouble thats all but I want to pay off my debts and buys things to make mine and my sons life more comfortable

You would be treated as if you still have the money and would therefore lose any relevant benefits. This would mean that you would have to sell the car to eat and pay your bills.

You have received some excellent advice; I suggest you heed it.

To be frank, you cannot expect the tax payer to pay your debts for you and buy you a new car! Offer your creditors a nominal sum each month.

Jowo_2

JustMe** wrote: »

Can I ask what would happen if I was found to be Deprivating Capital ..

You are treated as if you still have that capital - this is known as 'notional capital'. google it to find out more.

Robbie64

If debts are at the default stage then paying off those debts in order to avoid a court case and any subsequent bailiff action would not be seen as deprivation of capital. It is reasonable for these bills to be paid. What wouldn't be reasonable would be to start spending money on new cars, expensive holidays or transferring the money to other people, children included.

For the money that is spent it is essential that full receipts for any payments are kept as the DWP will ask for them at some stage if a new claim is made.

Edit: the relevant part of the Decision Makers Guide (DMG) which binds Decision Makers for Income Support are in Chapter 29, specifically the paragraphs from 29805 (Deprivation of capital) onwards. Specifically for repaying debts, the DMG states that capital spent on repaying debts can still be treated as capital held except where the claimant had no choice but to pay the bill. This covers debts which are immediately repayable and which are legal debts capable of enforcement. So this covers a situation where a debt if in default and legal proceedings can be commenced.

Chapter 29 of the DMG also covers other items mentioned in the original post, such as buying a car or transferring money to another person. It can be downloaded from the DWP site at http://www.dwp.gov.uk/publications/specialist-guides/decision-makers-guide/#vol5 the relevant part is Chapter 29 (PDF file), paragraphs 29795 onwards though the guide is very technical.

kizzy2010

i had a friend a while back who was pregnant and she lost her job. she won a case for constructive dismissal and got quite a good pay out. being a single parent (to be), she tried to claim income support. they assessed the money she had and they gave her a time frame, a date that that money had to last her til. i'm not sure of the details such as how long it had to last or how much she could spend of it a week but i know they restricted it a certain amount.
having said that, i know that she got a council house not long after and she was able to afford to kit this out with laminate flooring, furniture etc. so i dont think they make it so you cant spend any of it, just be careful with it