Deprivation of Capital

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

baza52

so you thought you could spend like a millionaire but claim because you had no money................

Oldernotwiser

You seem to have been correctly advised.

Andy_Colombini

Thank you Baza 52 for your opinion, however, it wasn't quite like that, you make it sound like a premeditated action with no regard for anything.

I could have left the pension as was, but I needed it then, for the reasons I mentioned.

I genuinely thought, and perhaps a little naively, that it was money that would clear debts and help a few members of my family.

Anyway, you are entitled to your opinion, even if a little misguided

Andy_Colombini

Thank you oldernotwiser for your comment, did you mean that you agree with the decision made by the DWP ?

Oldernotwiser

Andy_Colombini wrote: »

Thank you oldernotwiser for your comment, did you mean that you agree with the decision made by the DWP ?

My agreement is irrelevant but what you've been told sounds correct.

karenx

If money is now tight I suggest you move to a far cheaper house

Pollycat

From the other thread that is running concurrently:

Andy_Colombini wrote: »

As far as the deprivation of capital is concerned, once again, I had no intention of trying to maintain benefits, and the spending was not made for this reason. It was merely needing take my children away to see their grandparents etc... There was no intention to defraud or gain an advantage.

Thank you for your interest

In fairness to you, Andy, I can see how 'Deprivation of Capital' wouldn't have occurred to you.

It's your money, after all - or so you would think.

I only became aware of this when we were looking at my Dad going into a care home and I was checking out finances.
As it turned out, Dad was self-funding but only spent a short time in the care home.

Andy_Colombini wrote: »

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.

I empathise with this - I had 2 different departments within DWP (one dealing with Dad's claim for pension credit - disassociation from Mum and their joint PC claim - and Mum's new pension credit claim), plus our county council and local council all insisting on seeing original financial documents - within certain timescales.

If you really did spend £7K on a holiday to Italy ("This cost was proportionately around half the money I received") I can understand them not swallowing this as an acceptable expense though.

Oldernotwiser

Pollycat wrote: »

From the other thread that is running concurrently:


In fairness to you, Andy, I can see how 'Deprivation of Capital' wouldn't have occurred to you.

It's your money, after all - or so you would think.

I only became aware of this when we were looking at my Dad going into a care home and I was checking out finances.
As it turned out, Dad was self-funding but only spent a short time in the care home.



I empathise with this - I had 2 different departments within DWP (one dealing with Dad's claim for pension credit - disassociation from Mum and their joint PC claim - and Mum's new pension credit claim), plus our county council and local council all insisting on seeing original financial documents - within certain timescales.

If you really did spend £7K on a holiday to Italy ("This cost was proportionately around half the money I received") I can understand them not swallowing this as an acceptable expense though.

Although I agree with your last paragraph, you are asked what capital you have when you claim means tested benefits so it's not really a question of it not occurring to someone.

Pollycat

Oldernotwiser wrote: »

Although I agree with your last paragraph, you are asked what capital you have when you claim means tested benefits so it's not really a question of it not occurring to someone.

Maybe so, but my parents were on an assessed income period so any change in their savings did not have to be declared to the DWP.

Andy may have received the booklet every year regarding his Income support (not a benefit that my parents got so I don't really know) to say what changes he had to advise but does everybody really read all that stuff?
I do, because that's how I am and my parents were paranoid about being paid benefits that they weren't entitled to but not everybody does, especially as a single parent with very young children.

As my parents didn't qualify for CTB or HB I don't know what the literature from the council says about advising them.

I'm not saying the OP was right - I'm just saying that I could see how this happened.

Andy_Colombini

To be fair, I was receving benefits already when I took my pension, I then declared it to the appropriate people and when I looked on the direct.gov.uk website, it stated that to qualify you could not have savings in excess of £16,000, as my lump sum was £14,000, I never gave it another thought,

It was only after months of correspondence between myself and the DWP that all of a sudden they mentioned that the ceiling was actually £6000, by then I had spent alot of the money. Now after 8 months they announce that due to deprivation of capital I was not entitled to Income and Support and I assume subsequently to HB and CTB since 23 February 2011, as you can imagine this is a major issue.

With regard to the cost of the hoilday, 3 children and 3 adults in a hotel for nearly 4 weeks in Italy was not cheap, but it was a decision that I took rightly or wrongly but certainly innocently, to have my parents spend time with their grandchildren. Perhaps a trifle extravagant, but at my age and with the efforts that I have made studying for a degree at the age of 52 so that I can get off the benefits, I feel a little wrongly treated, and ultimately now that I am aware of these deprivation of capital rules, then I would have to accept that the cost of the holidays is regarded as frivolous spending.

The money that I have spent, fixing my car (twice), buying things for my kids, helping my older son with the work on his flat, are perfectly reasonable in my very humble opinion. They have virtually disregarded everything to come to the notional fund of £12700, which means that it takes me £11 per week over the qualifying total.

Thank you for your interest.