no money, redundant but not entitled to anything!

Jowo_2

meercatsunited wrote: »

...benefits have said he can have nothing as he earned too much money and should have saved but can have some benefits in the new tax year.

...

I don't understand this observation - can you elaborate? I'm not aware of any benefits regulations that compel them to reject a means tested benefit claimant from being eligible, on the grounds that they failed to save for a rainy day. Was this just an off the cuff remark that he 'should have saved' or can you provide more information on this, its too vague.

I know that the previous years income can be used to calculate tax credits but that a new calculation can be requested - perhaps another member of MSE can be a bit more specific and helpful than I can about tax credits?

There are, however, some regulations in place under the 'deprivation of capital' rules which mean that if a claimant is seen to have used their savings or got rid of their capital to improve their eligibility to gain benefits, they can be treated as if they still have this money (known as 'notional capital'). Sometimes this is applied when they pay off debts that they were not required to pay (such as where there is no legal requirement, such a court order, to pay them) and similar areas, such as allegedly paying back loans to relatives when the loans can't be proved and so forth.

Did the staff assessing his claims reject them on the deprivation of capital rules and if so, what specific ways did they say this took place?

viktory

meercatsunited wrote: »

lost his job could nt pay mortgage had to sell house or be repossessed.

So has he sold his house?

GlasweJen

If he's sold the house was there a profit of £16,000 or more?

If the OPs friend sold their house, made a profit and then used the profits to pay of debts then the friend will fall foul of deprivation of capital rules and wont be entitled to income based benefits.

Also if the OPs friend sold the house for less than the market value and made no profit but would have had it sold for the market value he will also come under deprivation of capital.

meercatsunited

you may have something here.

Sold the house before repossession about 4.5 years ago and what money they had left after repaying the mortgage most was used to pay off as much debt as possible, about 10k was kept to try and start a new business which did nt do well but he then found a new job so it may be that they are looking at this.

They have since been trying to repay the remainder of the debt, mainly credit cards but it would probably have been better to declare bankruptcy when they were forced into selling their house because at least all of the debt would have been settled and finished. none of the debtors approached the courts so although he kept the wolves from the door the card companies continued to add high interest rates to what was owed.

His wife did have some temporary earnings when he first lost his job and they were told they could claim working tax credit but they never actually received anything because her income/work dried up.

Jowo_2

Perhaps he needs to find out more about the Deprivation of Capital and Notional capital rules by locating the DWP and HMRC decision makers guides on the internet (staff guidelines) and identify if they followed their own guidance, then he should appeal the refusal to award him benefits if he finds grounds for this.

If they have refused his claims, it could be that they have taken into account some of the equity he had and are treating him as if he still has it (notional capital). This is what they do to claimants they feel have deliberately deprived themselves of capital - they are allowed to act as if the claimant still possesses it and they will make calculations based on this.

It's a huge, complicated area. The onus is on the DWP and HMRC to demonstrate that the OP knowingly deprived himself of capital in order to qualify for benefits. It's not just about how he spent his money but whether he did this because he was aware of the 6k to 16k means tested thresholds and got rid of his capital to take advantage of it. He should seek advice how to appeal if he feels their case is weak and judgement is wrong.

Some links to official guidance to DoC is here

http://forums.moneysavingexpert.com/showpost.php?p=40302172&postcount=28

Payment of debts are fine if there is a legal obligation to do so, such as a court order, but early repayment of loans where there is no requirement to do so can result in a benefit claimant being deemed to have deprived themselves of capital. He needs expert advice.

Two4Tuesday

Does deprivation of capital still apply when a bankruptcy order is in place? It may be shown that the removal of capital was done at the court's direction. When I was made bankrupt, I only had to send a copy of the bankruptcy order to the BDC to stop them making tariff income deductions from my benefits. They never asked to look at any bank statements after that.

I suspect that the real reason the OP's relative didn't get income-related JSA was because his wife was working over 30 hours at the time of the claim, but there has now been a change of circumstances which he should notify.

meercatsunited

Thanks everyone

new claims have been done but he is also seeing the benefits office independent of the benefits office