Deprivation of Assets.

paulmapp8306

Just looking into this.

I will leave the army soon, with a £33k lump sum as part of my pension.

I am going to spend some on clearing debts, but am unsure if this will class as deprivation of assets. From HMRC:


Purpose of the disposal of the asset: onus of proof

Decision maker's have to show the applicant's or partner's purpose was to get tax credits or more tax credits if they decide that applicant's have deprived themselves of capital.


Purpose of the disposal of the asset: onus of proof
Getting tax credits or more tax credits may not be the applicant's main motive for disposing of the asset , but it must be a significant one1 . So when an applicant gives away all their capital to a relative just before applying for tax credits their

main or predominant purpose may be to benefit the relative and
intention, and significant purpose may be to reduce their capital so they can get tax credits or more tax credits
Example
If a person uses capital to repay a debt, the decision maker should consider carefully whether the debt had to be repaid at this time. If there is no legal obligation or pressure to repay the debt now, part of the purpose may have been to get benefit or more benefit.


Now heres the thing. I have no intention of paying the debts to claim or increase any benefits. In fact as I have an £11k annual pension as well Im not going to get much if anything anyway. The reason for paying them, is I have been on a DMP for 11 years, and one of the agreements when it was set up was that all outstanding monies would be paid once I left the army from my lump sum. It was why they accepted a DMP that would take 27 years to pay off the debts without this. If I fail to pay them off, my creditors will take this further, leading to bankruptcy, CCJs and anything else they can throw at me - and at the very least would want a substantial increase in payments (which if I was actually applying for benefits I wouldnt be in a position to offer).

It is my understanding of the rules, that this should not be classed as deprivation of assets due to this pressure, and the lack of motivation re benefits.

I should be left with around £13k even AFTER Ive paid the debts on top of my £11k annual, so how much the capitol I use to clear the debts would actual effect any benefits I have no idea (will cost me £20k ish to clear all the debts - though F&F settlements may make this lower). I am also going to have to find housing, and a reasonable amount of the £13k may be taken up with up front rent or bonds on rented accommodation, or potentially all of it on a mortgage deposit. The latter will only apply if I get a job to go out to mind - but It will have to be one of the two as Ive been told I have no chance of social housing even if I wanted to go that way.

Ultimately I HOPE to go directly into a job, even if it is low paid, but wanted to be clear as to where I stand.

NASA_2

What benefits are you expecting to claim after leaving the army?

zagfles

Ignore all the above from HMRC - this is ancient stuff that applied to the WFTC which was replaced in 2003. There are no capital rules for the current tax credits.

But there are capital rules and deprivation rulles for benefits such as JSA(IB), IS, HB, CTB etc, which may be similar to the above.

paulmapp8306

OK. TBH I dont know what benefits Im likely to get. I know I wont get JSA, as i will have my pension, which is seen as an income therefore making me ineligible. My wife SHOULD be entitled, as she will have no personal income - also the lump sum i get isnt hers either, so it shouldn't affect her JSA should it?

I have no idea on housing benefit TBH. I know Im not going to get social housing due to my income, but will I/would I be entitled to some towards private rent? my pension equates to around £630pm after tax and private rent alone is gong to be £550-£650.

I did put my details into the HMRC calculator (saying I didnt have £16k in savings which I wont have if I pay the debts, but will have if I dont), and it basically says Id be entitled to child Benefit of £135pm which i already get, and Child Tax Credits of £100pw which I dont. The only other things it came up with were JSA for my wife (as i explained) and free prescriptions/school means and the like. It equated to £351pw (including the income from my pension) so £1400pm, but id have to find private rent out of that. If it helps, I have 2 children aged 8 and 6.

TBH, my main concerns are the debts being cleared and housing my family. i really dont care what I do job wise as long as it payd the bills, but given the current economy am concerned i may have no job - and dont know where that will leave me re-housing, benefits, and the lump sum and debts.

bobajob_1966

Has your wife worked over the past few years? If not, she will not be entitled to JSA.

The is an Armed Forces board further down the forum, they will be able to help you with making plans for leaving.

paulmapp8306

My wife is currently working in the local pre-school, and will have been for 3 years when I leave. she does however only earn minimum wage, and works 15 hours per week (more is not always on offer, and her hours are round the kids - any more and childcare would cost more than she earns even with help), and 40 weeks per year (pre-school is closed during the 10 weeks summer holidays - NI).

Her income is around £3600 per year so she pays not tax. no idea on NI, or employers contributions.

NASA_2

paulmapp8306 wrote: »

My wife is currently working in the local pre-school, and will have been for 3 years when I leave. she does however only earn minimum wage, and works 15 hours per week (more is not always on offer, and her hours are round the kids - any more and childcare would cost more than she earns even with help), and 40 weeks per year (pre-school is closed during the 10 weeks summer holidays - NI).

Her income is around £3600 per year so she pays not tax. no idea on NI, or employers contributions.

She wont qualify for JSA based on those figures.

paulmapp8306

well that will put my monthly income at around £1000 including my Pension, CTC and CB. I will have to find £600ish for private rent out of that.

So, £400pm for a family of 4, is that about right? Ive seen a lot of people getting more benefits than that with no income, and more benefits than that WITH an income (with WTC).

Andy_Colombini

Hello, I am new to this forum. I would like to tell you my story.

I am 59 years old have been claiming Income support since October 2008, when I qualified as an acupuncturist and was trying to start a practice, this entitled me to Housing Benefit and as a lone parent I got council tax relief.

In February 2011 I decided to take a small pension which I started 23 years ago and stopped paying into because circumstances having prevented me from having sufficient money to do so. This pension gave me a lump sum of £14K and a monthly annuity of £216 per month.

I declared this new found wealth to all appropriate departments and all hell broke loose, letters started arriving from offices ranging from London to Scotland, to Essex, and Stockport, all asking the same questions, and asking for the same documents, I did what I could and eventually after a few months they reduced my Income support from £65 to £15 per week, due to my pension.

There then ensued letters asking for bank statements and explanations on what the money had been spent on, I was really surprised because I had no idea that I had to keep a record of what and how I spent my money. I took the money because I wanted to buy things and do things that I had not been able to buy for years, I should also mention that I have 3 young children from a fateful relationship and two of them live with me, the second one aged 3 has only just been transferred to me for child benefit, because she is now going to nursery at the same school as my 5 year old and it made sense to me.

My parents are in their late 80s and live in Italy, they had never seen their grandchildren and one of the reasons I took out the money was to take them to Italy to spend time with their grandparents as well as have a holiday that we have never had together. This cost was proportionately around half the money I received, I had my car fixed, I gave a little money to my older son (aged 29) because he was having difficulties, and the rest was spent on what can only be called fun things. At no stage was there any intention of trying to defraud anyone or to increase my benefit entitlement.

Today I received a letter telling me that I had £12700 (they called it notional) in the bank and therefore due to this I was not entitled to any income support and consequently no other benefit... since the 23rd February; this has taken them 8 months to come to this conclusion, based on what they called deprivation of capital.

I had never heard of this and they explained that I had spent the money solely to maintain my entitlement to benefits.
I spoke to the housing benefit people who advised me that they had been notified by DWP that Income support had been stopped, so they are now going to suspend my housing benefit and council tax benefit. I will then have £216 per month pension, £230 of Child tax credit and about £140 of child benefit, my rent is £1350 per month.... in the poo to say the least... could someone advise me. Thanks

agrinnall

Advice for Andy Colombini :

1) Don't hijack somebody else's thread, start your own.

2) Write using sentences, paragraphs and proper punctuation, what you have written is almost impossible to read.

Do those things and you may get some advice on your issue.

McKneff

Bit sharp there agrinall, to a newbie.

Welcome to the boards would have been nice.