Deprivation of disregarded capital.

rogerblack

If someone comes into significant capital, and spends it 'frivolously' - they may be treated as having deprived themselves of capital, and thereby be treated as still having that notional capital.

If, however, the capital involved is disregarded at the time (say for 26 weeks) - if the claimant spends that capital frivolously during the period of the disregard, can it ever be treated as deprivation of capital?

http://www.legislation.gov.uk/uksi/2008/794/pdfs/uksi_20080794_en.pdf (I have not checked for amending legislation)

"Calculation of capital
111.—(1) For the purposes of sections 1(3) and 4 of, and Part 2 of Schedule 1 to, the Act as it applies to an income-related allowance, the capital of a claimant to be taken into account is, subject to paragraph (2), to be the whole of the claimant’s capital calculated in accordance with this Part and any income treated as capital under regulation 112 (income treated as capital).
(2) There is to be disregarded from the calculation of a claimant’s capital under paragraph (1) any capital, where applicable, specified in Schedule 9.
Income"

Would seem to me to say no, as paragraph 2 says you don't count as capital in any sense disregarded capital.

Thoughts?

bobajob_1966

s. 111(2) refers to capital in the period of disregard, not after the period. The question of deprivation looks at intent, so if someone has £50,000 that is disregarded for six months, but the claimant spends frivolously because they know it will affect their benefits after that period, it could still be treated as notional capital.

real1314

rogerblack wrote: »

If someone comes into significant capital, and spends it 'frivolously' - they may be treated as having deprived themselves of capital, and thereby be treated as still having that notional capital.

If, however, the capital involved is disregarded at the time (say for 26 weeks) - if the claimant spends that capital frivolously during the period of the disregard, can it ever be treated as deprivation of capital?

YES. It can be treated as deprivation. :cool:

NASA_2

Capital only falls to be disregarded for certain reasons ie. you sold a house, have £150,000 in the bank, and are going to use that capital to buy another house to live in.

If that £150,000 is then spent frivelously it can no longer be treated as disregardable (I know the word doesnt exist). Benefit agencies are entitled to look retrospectively at capital and as the capital can no longer be disregarded it will fall to be taken into account under the normal deprivation rules.

dookar

It's notoriously difficult to prove deprivation, and even harder to get it to 'stick' at tribunal. One of the things the tirbunal would look at would be does the claimant know the effect disposing of the capital would have on benefit entitlement? I think the fact that the capital had been disregarded would make that a yes, placing the claimant in a worse position