reducing savings to the £16,000 threshold

Sixer

Jowo wrote: »

Can't say I'm an expert in this area. We could do with a DWP or HMRC DM on this forum to be honest, as DofC is very complex.

Some people on this forum have argued that its okay to pay off loans way ahead of making an application for means tested benefits, they seem to think that the DWP/HMRC will only look at the previous 3 months of bank statements, therefore aren't concerned about financial actions before that date. Others argue that the 3 months of bank statements that the authorities request when a person applies for certain benefits don't actually mean there is a window of opportunity before this date to pay stuff down and hammer through their savings.

I've browsed through some of the Decision Makers guides on deprivation of capital and while I find it vague about their attitude to paying off actual debts, there are references that suggest the early repayment of loans where there is no legal requirement to pay them off ahead of time is seen in a negative light.

I think this is to discourage people from paying off loans, including mortgages, early and then applying for means tested benefits.

But the Decision Makers guides offer some information about how the staff calculate notional capital so the OP should look at this. I don't know how/when they start the clock on this.

I agree with this. The rules are complex and I do think some posters on here suggest a much more draconian regime than actually exists. The DWP guidance caveats almost all its examples with "may" - meaning they are possible indications, not cut and dried sinning actions. There is also the need to show conclusively that the capital was disposed of deliberately to create eligibility for benefits.

Since it's counter-intuitive to NOT pay off outstanding loans/credit card bills if you're made redundant with a lump sum, it seems to me that it would be difficult for the DWP to show deliberation in the case of people entitled to JSA(C) who have paid off loans or credit card balances as soon as they were made redundant. It's the common sense thing to do and presumably most of these people would anticipate being back in work within the 6 month period. Especially if they have partners who work, even part time.

It must all depend on a wide variety of factors: the sums involved and their relation to the £6k and £16k thresholds, the status of the rest of the household (if there is a rest), the work history of the claimant and the claimant's partner if they have one, etc etc.

I'm in no way suggesting anyone does deliberately deprive themselves of capital in this way. But I think the area is both too vague and too complex for advice given here to be taken as belt and braces.

sader1

Things may have changed a bit since 2000. I received just over 1/4 million in compensation. Bought a new care (BMW) went on a holiday to the States especially to see Ground Zero and cash for a nice home (previously rented a flat). That left me a few grand.

I then claimed IS, IB, DLA, IIDB and the wife claimed CA. No one ever asked me where the money went. Mind you it was about 4 months after we moved and I had done the decorating that I made the claims.
Been on and off benefit ever since as I can't seem to get back into working again. On ESA now.

We get by. So I would have thought that as long as it was all done months before you claimed they wouldn't bother.

Jowo_2

Sixer wrote: »

...The rules are complex and I do think some posters on here suggest a much more draconian regime than actually exists. The DWP guidance caveats almost all its examples with "may" - meaning they are possible indications, not cut and dried sinning actions. There is also the need to show conclusively that the capital was disposed of deliberately to create eligibility for benefits.

...

I'm in no way suggesting anyone does deliberately deprive themselves of capital in this way. But I think the area is both too vague and too complex for advice given here to be taken as belt and braces.

I agree that it's currently a weakness of this forum that there appear to be no active members with a DWP/HMRC background in this type of complex area.

Plus while we know that some people posting on this forum are conscious of the 16k means tested threshold and hell bent on reducing their income as quickly as possible to get under it, the onus is on the HMRC and DWP to be able to prove their actions are intentional.

I've certainly seen a case study whereby someone of a mature age who paid off their mortgage with a lump sum was able to successfully challenge a decision that their actions were deprivation of capital. The judge who overturned the DWP decision said something along the lines of it being a sensible strategy for someone approaching retirement. I can't find the link to this case now.

It's got to be done on a case by case basis. There's so many ifs and buts with DofC.

I still have reservations about those who post assumptions that if the financial activity took place ahead of a claim that they are somehow absolved from any repercussions. I know that many claimants have to submit 3 months worth of bank statements with their benefit claims but I still don't believe this means that the DWP discount all activity from 3 months and 1 day before...

In fact, local authorities looking at applications for care homes can and do look at the transfer of capital and spending patterns of the claimants from many years before, trying to detect those who have gifted their savings and property to their friends and relatives rather than pay for their own care.

Sixer

Jowo wrote: »

I agree that it's currently a weakness of this forum that there appear to be no active members with a DWP/HMRC background in this type of complex area.

Plus while we know that some people posting on this forum are conscious of the 16k means tested threshold and hell bent on reducing their income as quickly as possible to get under it, the onus is on the HMRC and DWP to be able to prove their actions are intentional.

I've certainly seen a case study whereby someone of a mature age who paid off their mortgage with a lump sum was able to successfully challenge a decision that their actions were deprivation of capital. The judge who overturned the DWP decision said something along the lines of it being a sensible strategy for someone approaching retirement. I can't find the link to this case now.

It's got to be done on a case by case basis. There's so many ifs and buts with DofC.

I still have reservations about those who post assumptions that if the financial activity took place ahead of a claim that they are somehow absolved from any repercussions. I know that many claimants have to submit 3 months worth of bank statements with their benefit claims but I still don't believe this means that the DWP discount all activity from 3 months and 1 day before...

In fact, local authorities looking at applications for care homes can and do look at the transfer of capital and spending patterns of the claimants from many years before, trying to detect those who have gifted their savings and property to their friends and relatives rather than pay for their own care.

Absolutely to all this. My - strictly unprofessional! - impression having, like you, read the DWP guidelines, threads on here, and case studies, is that intention is the key thing in DofC investigations. So you can't say it's ok to buy X, or spend money at Y time, or at Z rate per week. What you buy, when you buy it and the rate at which you buy it may singly or jointly be used as part of a case to prove your intention. If these things don't indicate intention, an investigation won't find against you (or you'd be likely to win an appeal). If they do, then you're in trouble.

As you say, it's a case-by-case basis.

Arg

Aarons_mummy wrote: »

Being fair you did just ask how you could decrease a hefty sum of money that you could easily live off to claim money from an already overstretched pot, you kind of set yourself up to be judged in that instance.

Except this forum's for advice not judging if you don't like it moan somewhere else.

dmg24

Arg wrote: »

Except this forums for advice not judging if you don't like it moan somewhere else.

How rude! :rotfl:

Arg

I'm getting a little unimpressed with the tactic of annoying people or being unhelpful then coming out with the rude comments when you get called on it.

dseventy

Arg wrote: »

I'm getting a little unimpressed with the tactic of annoying people or being unhelpful then coming out with the rude comments when you get called on it.

I think everyone (in the country!) is getting a little unimpressed with people trying to fiddle the system.

D70

Arg

How is that helping answer the question at the start of the thread? There's other forums here where you can moan about people fiddling the system but I suspect the biggest fiddlers are the DWP themselves and that's before you move onto other organisations.

sunnyone

sader1 wrote: »

Things may have changed a bit since 2000. I received just over 1/4 million in compensation. Bought a new care (BMW) went on a holiday to the States especially to see Ground Zero and cash for a nice home (previously rented a flat). That left me a few grand.

I then claimed IS, IB, DLA, IIDB and the wife claimed CA. No one ever asked me where the money went. Mind you it was about 4 months after we moved and I had done the decorating that I made the claims.
Been on and off benefit ever since as I can't seem to get back into working again. On ESA now.

We get by. So I would have thought that as long as it was all done months before you claimed they wouldn't bother.

You got two EAs PPR'ed yesterday and your back like a bad stench andy, write down your fairytales and try and sell them or get a life.