"Deprivation of Capital" when on Income Support

cabbage

I always thought it was not what you bought but your intention, ie you could buy anything you need as long as in doing so, it wasn't your intention to deprive yourself of capital in order to obtain or retain benefits.

Jowo_2

cabbage wrote: »

I always thought it was not what you bought but your intention, ie you could buy anything you need as long as in doing so, it wasn't your intention to deprive yourself of capital in order to obtain or retain benefits.

Yes, intentionality is supposed to have to be proved by the DWP - that a claimant has done this knowingly.

I believe that one way they may detect this is the behaviour of the claimant who shows that they know about the 6-16k capital threshold in the way they change and resubmit their claim, the timing of claims and spending, etc.

I couldn't find the DWP guide but came across the HMRC guide for tax credits and gives a flavour of what suspicious behaviour that is looked for by decision makers that could demonstrate that the spending was deliberate in order to improve their eligibility for benefits.

"Applicant's or partner's have not deprived themselves of capital for the purpose of getting tax credits if they did not know that the capital they have disposed of would have an effect on the amount of tax credits they could get.

Decision maker's have to show that applicant's or partner's did have such knowledge if they are to decide the purpose was to get tax credits or more tax credits. Facts that the decision maker should consider include

1) previous applications which may show applicant's or partner's

• did not get benefits or tax credits , or got a reduced amount because of the capital that they previously held or

• have been told about the effect of capital on an application

2) official forms and leaflets which applicant's or partner's have been given when applying for either benefits 1 or tax credits and
3) the applicant's or partner's educational standing.


The decision maker must consider the timing of the disposal of an asset. Applicant's can generally be expected to realise that for a means-tested tax credits there is a limit on how much capital can be held before tax credits are not payable1. Even without that knowledge applicant's can still have deprived themselves of an asset for the purpose of getting benefit.

Example

If capital is disposed of

• shortly before a claim is made - getting or increasing entitlement to benefit may well be a secondary and significant motive

well before a claim is made - it is less likely that the action will have been for the purpose of getting benefit.

The decision maker should decide why an applicant has disposed of capital only after balancing

• all the person's motives, explicit and implicit and

• the timing behind the action"