CT benefit and "deprivation of capital"

benefitquery_2

:TDear Sirs/ladies,

I am emailing on behalf of a friend. She has been living off her savings for a number of years. Every year she donates a lot (i.e thousands) to charities.

January this year she donated £18,000 to charities. This brought her savings to around £6k.

Her clain for CT benefit might be turned down due to the fact that she deprived herself of capital, so she is told.

However, it is clear she gave to charity (not to friends) and has always given to charity.

Can a council refuse her CT benefit on these (weird) grounds? If so, then for how long will she have to be paying the full council tax bearing in mind she now only has arounf £6k left.

Many thinks to you all in advance for your kind help.

Mark

BigAunty

You should be able to dig up the Decision Makers guides which are staff manuals for the DWP which provides the best insight into how they look into cases.

Generally, if a person has intentionally given away their capital in order to receive means tested benefits, it will be considered deprivation of capital - note the deliberate nature of the act. So they look to understand if the claimant is aware of the capital thresholds.

For example, it's okay to pay off a debt when it is legally due but not okay to use a lump sum to pay off a loan in advance of the schedule, such as paying off the mortgage before the term. It's okay to use capital for repairs, refurbishment of the property and replacement goods, but not okay to gift the money to a friend.

The rules are complex.

EDIT - she could have used that money to pay her CT for the next 12 years or more!

Also, I believe that those DM guides give some idea how they calculate the notional capital (meaning the sum that was given away and which they still treat the claimant as having).

real1314

benefitquery wrote: »

:TDear Sirs/ladies,

I am emailing on behalf of a friend. She has been living off her savings for a number of years. Every year she donates a lot (i.e thousands) to charities.

January this year she donated £18,000 to charities. This brought her savings to around £6k.

Her clain for CT benefit might be turned down due to the fact that she deprived herself of capital, so she is told.

However, it is clear she gave to charity (not to friends) and has always given to charity.

Can a council refuse her CT benefit on these (weird) grounds? If so, then for how long will she have to be paying the full council tax bearing in mind she now only has arounf £6k left.

Many thinks to you all in advance for your kind help.

Mark

Sounds to me like she'd be refused CTB.

Why would she give away money to that degree (£18k !!) when she can't afford her own living costs? :cool:

Torry_Quine

If ever there was a clear case of deprivation of assets then this it. Why on earth would someone give away such a large sum of money and then expect state support, it beggars belief!

somethingcorporate

I agree, this appears to be very obvious deprivation of capital. Who in their right mind would give away 75% of their savings to charity and then expect to be able to claim benefits?

suburbanwifey

Why on earth would anyone (who doesn't deserve to be sectioned) give away 18K to charity? There is charity and there is stupidity (or someone who is trying to flout the system).

Unreal.

BigAunty

The rules are really complex but I do believe that the onus is on the DWP to prove intentionality, that a claimant has done it deliberately in order to maximise their benefit entitlements, such as a record of them being told or having enquired about capital thresholds, for example.

I have heard of cases which have gone to a legal appeal where the court judge has overuled the DWP. The case I recall (whose link I can't find) concerned someone of mature age who used their redundancy money to pay down or pay off their mortgage. The judge felt that it was a sensible thing to do as they approached retirement and overuled the deprivation of capital ruling by the DWP.

Some people actually do make changes to their capital completely oblivious to the rules - for example, they've never claimed benefits before so how would they know?

rotoguys

BigAunty wrote: »

The rules are really complex but I do believe that the onus is on the DWP to prove intentionality, that a claimant has done it deliberately in order to maximise their benefit entitlements, such as a record of them being told or having enquired about capital thresholds, for example.

I have heard of cases which have gone to a legal appeal where the court judge has overuled the DWP. The case I recall (whose link I can't find) concerned someone of mature age who used their redundancy money to pay down or pay off their mortgage. The judge felt that it was a sensible thing to do as they approached retirement and overuled the deprivation of capital ruling by the DWP.

Some people actually do make changes to their capital completely oblivious to the rules - for example, they've never claimed benefits before so how would they know?

Unfortunately that cannot be a valid defence. You cannot plead ignorance of benefit rules, it is your responsibility to ask.

For those that say that is rubbish - I was totally unaware that we were entitled to Pension Credit and other disability benefits for approx 6 years. When I did become aware and claimed them, I asked for it to be back dated to when the event could have started. They refused on the basis that it was my responsibility to ask questions - even though I knew absolutely nothing about those types of benefit.

You can't have it both ways! I lost in excess of £120,000 that by rights should have been paid to us over the previous 6 years.

somethingcorporate

I agree, ignorance is no defense and I very much doubt pleading ignorance in this case would work either.

copa_feela

BigAunty wrote: »

The rules are really complex but I do believe that the onus is on the DWP to prove intentionality, that a claimant has done it deliberately in order to maximise their benefit entitlements, such as a record of them being told or having enquired about capital thresholds, for example.

I have heard of cases which have gone to a legal appeal where the court judge has overuled the DWP. The case I recall (whose link I can't find) concerned someone of mature age who used their redundancy money to pay down or pay off their mortgage. The judge felt that it was a sensible thing to do as they approached retirement and overuled the deprivation of capital ruling by the DWP.

Some people actually do make changes to their capital completely oblivious to the rules - for example, they've never claimed benefits before so how would they know?

In law, you are correct. Whilst a common sense view would dictate that the claimant in this case should have kept her money, her disposal of assets does not necessarily equate to an intention to deprive. The issue of ignorance is irrelevant until it is proven that the claimant intended to deprive themselves of capital in order to claim benefits.

Nonetheless, I find it shameful that someone in this position would apply for means tested benefits.

sleepless_saver

suburbanwifey wrote: »

Why on earth would anyone (who doesn't deserve to be sectioned) give away 18K to charity? There is charity and there is stupidity (or someone who is trying to flout the system).

Unreal.

I don't see what's crazy about giving sizeable amounts to charity if you want to and can afford it. The problem here is that the OP's friend couldn't afford it and is now looking for state support.