Income Support + Premium Bonds

splashproof

Cam1970 wrote: »

It's unfortunate that your parents didn't realise the implications their generous action would have on your sisters IS. .

From a legal standpoint, the Bonds website does not take into account these situations. It's obvious a genuine mistake has been made, but the bonds will be re-invested into something more suitable and within DWP rules.

cassieB57

splashproof wrote: »

I've just checked with the DWP and they are of the opinion the savings will count.

They cited the folllowing section

"Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds"


Saying that the parents could benefit from the prize money and could also cash in the bonds for there own gain, which would count towards their savings.

The DWP would view it has the childs money if it were in a trust fund and therefore only the child could access it later in life.

Yes but the child would still be the beneficial owner not the mother:

Only the capital where people are the beneficial owners is included when working out what capital they have.
29071 People are beneficial owners of capital if they have a beneficial interest in it. A person is the joint beneficial owner of capital if more than one person has a beneficial interest in the same capital.
29072 A person whose name the capital is in is called the legal owner. A person is the joint legal owner of capital if more than one person is the legal owner of the same capital.
29073 People who are the beneficial owners of capital are usually the legal owners. People who are the legal and beneficial owners of capital hold that capital for themselves and can use it as they wish.
29074 Legal owners who are not the beneficial owners of capital are holding that capital on trust for the beneficial owners1. They cannot use the capital for themselves. It should be used for the beneficial owners.

A child or young person can be the beneficial owner of capital.

29078 Children and young people may not be the legal owners of the capital of which they are the beneficial owners. This is because businesses, such as banks, will not enter into a contract with them. If they are the beneficial owners and not the legal owners, their capital will be held on trust by another person.
29079 Children and young people become the legal owners of their capital when the terms of the trust say they can have the capital. In England and Wales this may be when they are 18 years old and in Scotland when they are 16.

So the capital is the child's, not the mother's becaue the child is the beneficial owner.

cassieB57

skcollob wrote: »

But then that could be seen as deprivation.

Grandparents regularly give away £3000 as allowed for with Inheritance Tax. So if they spent the £3000 on a holiday, would that be treated as deprivation?

It's not cut and dried 'deprivation'.

" DMs have to show the claimant's or partner's purpose was to get benefit or more benefit if they decide claimants or partners have deprived themselves of capital. Getting benefit or more benefit may not be the claimant's or partner's predominant purpose but it must be a significant one1. So when claimants give away all their capital to a relative just before claiming benefit their
1.
main, or predominant, purpose may be to benefit the relative and
2.
intention, or significant purpose, may be to reduce their capital so they can get benefit or more benefit."

If someone received a gift of money at Christmas or Birthday, and spent it on something for themselves it would be difficult to prove deprivation. They might look at whether the amount was 'reasonable' though, for a birthday present. In your example, it would be more prudent to just pay for the holiday instead.

real1314

splashproof wrote: »

I've just checked with someone on the phone at the DWP and they are of the opinion , which they have not fully checked, that the savings will count.

They cited the folllowing section

"Any prizes will be paid to the parent or guardian. And only the parent or guardian will be able to cash in the Bonds"


Saying that the parents could benefit from the prize money and could also cash in the bonds for there own gain, which would count towards their savings.

The DWP would view it has the childs money if it were in a trust fund and therefore only the child could access it later in life.

I've sort of fify'd it, but the reality is that at best you made a phone call, to someone who is not a Decision Maker / is not a very good one.

The whole problem with accounts or savings in one name that are claimed to belong to another is mainly down to establishing who the beneficial owner is. In this case a statement from the Grandparents to confirm that the PBs are for the kiddy but have had to be made in the parent's name should be sufficient. Send a copy to DWP and keep a copy with the PBs. Ask DWP to provide a reply confirmng that they will be treating the kiddy as the beneficial owner and keep that with the PBs too.

splashproof

The CAB summed it up. No where in any advice guide is there specific mention of children's savings ( as discussed here ) outside of the normal allowed capital. Therefore it would be down to a DM to decide. If they get it right everyone's happy, if they get it wrong ( which they usually do in cases such as this ) then the claimant will go through hell until it's resolved.

By which time the damage is done. With the DWP's policy of act first ask questions later, it's not a wise move to second guess a DM's decision on something such as £10,000 in an IS case.

Until mention is made on a .gov website or posted by the CAB - I think its safe to assume your dealing with a hot potato.

cassieB57

splashproof wrote: »

The CAB summed it up. No where in any advice guide is there specific mention of children's savings ( as discussed here ) outside of the normal allowed capital. Therefore it would be down to a DM to decide. If they get it right everyone's happy, if they get it wrong ( which they usually do in cases such as this ) then the claimant will go through hell until it's resolved.

By which time the damage is done. With the DWP's policy of act first ask questions later, it's not a wise move to second guess a DM's decision on something such as £10,000 in an IS case.

Until mention is made on a .gov website or posted by the CAB - I think its safe to assume your dealing with a hot potato.

Splash-what I have quoted in my posts IS from the Decision Maker's Guide, which can be found on the government website http://www.dwp.gov.uk/docs/dmgch29.pdf

First thing the DM decides is 'Does the person own the Capital?'


Answer: (DMG29070-Only the capital where people are the beneficial owners is included when working out what capital they have.


who is the beneficial owner? answer: the child for whom the premium bonds were bought. 'DMG29077 A child or young person can be the beneficial owner of capital.

Does the person own the capital 29078 29090
29078 Children and young people may not be the legal owners of the capital of which they are the beneficial owners. This is because businesses, such as banks, will not enter into a contract with them. If they are the beneficial owners and not the legal owners, their capital will be held on trust by another person'

'DMG29091 If there is written evidence naming who has a beneficial interest in the capital the people named in the evidence are the beneficial owners'. The written evidence would be from the grandparents stating the the PBs were bought for the child and that the mother is the nominated person

The child's mother is NOT the benefical owner as she is holding it on trust for the child until the child is age 16. the child will then be the legal owner AND the beneficial owner.

The DM having decided whose capital it is then decides how it affects the Income support paid to the mother:

'The law
29015 [See DMG Memo JSA/IS 64] The law says

7.capital of a

7.2 child or young person is not treated as the capital of the claimant if the claimant is a member of a family.

I'm not sure how much more information you need, it's all quite clear, IMO, and the DM will of course be using the same guidance to make their decision

splashproof

cassieB57 wrote: »

Splash-what I have quoted in my posts IS from the Decision Maker's Guide, which can be found on the government website http://www.dwp.gov.uk/docs/dmgch29.pdf


I'm not sure how much more information you need, it's all quite clear, IMO, and the DM will of course be using the same guidance to make their decision

Cassie - I think I may have gave the wrong impression, but I do understand your advice and information is correct .

I'm looking at it from the hassle point of view if / when the DWP do make a big mess of it. The alternative is for my parents to look after the bonds themself.

I think it all comes down to the DWP's history in matters like this. Sometimes - even when you're in the right, its easier to play safe.

cassieB57

splashproof wrote: »

Cassie - I think I may have gave the wrong impression, but I do understand your advice and information is correct .

I'm looking at it from the hassle point of view if / when the DWP do make a big mess of it. The alternative is for my parents to look after the bonds themself.

I think it all comes down to the DWP's history in matters like this. Sometimes - even when you're in the right, its easier to play safe.

I wonder, could the grandparents be nominated holders? Or the dad?

As a long-time DWP employee, I do understand your concerns. Mistakes shouldn't happen, but they do, sadly. Unsurprisingly because of it, people tend not to trust us/them to get the claim right.

splashproof

cassieB57 wrote: »

I wonder, could the grandparents be nominated holders? Or the dad?

As a long-time DWP employee, I do understand your concerns. Mistakes shouldn't happen, but they do, sadly. Unsurprisingly because of it, people tend not to trust us/them to get the claim right.

I think they have a found a soloution to the issue now by using a trust fund.

It would be nice if the DWP could be approched with questions similar to these without having to annouce who you are first. It seems to set off a chain of events

i.e Ask about savings ( after they have your NI number and claim details ) then two weeks later receive a letter asking for bank statements. Sadly, It doesn't enhance trust between the claimant and the authority.