Claim. Will this effect Income Support?

paddedjohn

https://forums.moneysavingexpert.com/discussion/3965701


By jove i think he's got it:beer:

Anubis_2

paddedjohn wrote: »

https://forums.moneysavingexpert.com/discussion/3965701


By jove i think he's got it:beer:

You surely do, there will be no stopping you now

Dunroamin

Go to the top of this page to the address bar on the page you want to link to (the first line that doesn't move when you scroll down), highlight the address, click on "copy" and then, when you click "paste" the address will appear, as a link, where your cursor was.https://forums.moneysavingexpert.com/discussion/3965701 (this is what I've just done for this page)

You're never too old to learn!

rogerblack

paddedjohn wrote: »

https://forums.moneysavingexpert.com/discussion/3965701


By jove i think he's got it:beer:

Be careful!
The information in that thread is incorrect - see the decision-makers guide for rules on capital under income support.

http://www.dwp.gov.uk/publications/specialist-guides/decision-makers-guide/

As outlined above, you cannot move money from your bank account into a personal injury trust and have it exempt forever from the benefits system, even if the original source of funds was a personal injury award.

This can only happen if it was paid into the trust at the start.

Paying it into a trust now will merely waste the money spent putting it in trust, and cause problems possibly up to threats of prosecution for benefit fraud.

McKneff

paddedjohn wrote: »

https://forums.moneysavingexpert.com/discussion/3965701


By jove i think he's got it:beer:

:T:T:T

I'm getting on too, knew about this one but not too long ago.

Modern technology is running away from me............

spikeripley

My son got awarded £17500 and the DWP said he could still sign on for JSA as the award would be disregarded for 52 weeks or until the money was spent which ever happened soonest according to the decision makers rules. He could do what he wanted with the money because as far as they were concerned it didn't exist unless he still had it after the 52 weeks. The same rule applies to housing benefit and council tax. You do need to inform them of the payment though.

real1314

spikeripley wrote: »

My son got awarded £17500 and the DWP said he could still sign on for JSA as the award would be disregarded for 52 weeks or until the money was spent which ever happened soonest according to the decision makers rules. He could do what he wanted with the money because as far as they were concerned it didn't exist unless he still had it after the 52 weeks. The same rule applies to housing benefit and council tax. You do need to inform them of the payment though.

I would suggest that whoever dealt with your son's case applied a very, very loose interpretation of the regulations; and not one I would advise anyone to rely on. :cool:

epitome

real1314 wrote: »

I would suggest that whoever dealt with your son's case applied a very, very loose interpretation of the regulations; and not one I would advise anyone to rely on. :cool:

Reading the DMG on Capital 29509 Payment for Personal Injury

29509 Any lump sum payment made because of a personal injury to the claimant or partner and not placed in trust is disregarded for a period

1. beginning with the first date of receipt by the claimant or partner of such a payment and

2. ending when
.............2.1 the claimant or partner no longer has any part of the payment remaining (including where the claimant or partner ...................has used any part of the payment to buy an asset) or
............2.2 52 weeks have elapsed whichever is the sooner. *1

*1 JSA Regs, Sch 8, para 17A; IS (Gen) Regs, Sch 10, para 12A

It would appear to be saying that buying an asset with the money is acceptable and will not affect your benefits. Other than in so far as any asset would/could affect benefits for example a second home. It also does not preclude the giving away of the money to for example a family member.

Going to the original source..........

In Schedule 8 (capital to be disregarded)—

(a)in paragraph 17, after “claimant” insert “or the claimant’s partner”;

(b)after paragraph 17 insert—

“17A.—(1) Any payment made to the claimant or the claimant’s partner in consequence of any personal injury to the claimant or, as the case may be, the claimant’s partner.

(2) But sub-paragraph (1)—

(a)applies only for the period of 52 weeks beginning with the day on which the claimant first receives any payment in consequence of that personal injury;

(b)does not apply to any subsequent payment made to him in consequence of that injury (whether it is made by the same person or another);

(c)ceases to apply to the payment or any part of the payment from the day on which the claimant no longer possesses it;

(d)does not apply to any payment from a trust where the funds of the trust are derived from a payment made in consequence of any personal injury to the claimant.

(3) For the purposes of sub-paragraph (2)(c), the circumstances in which a claimant no longer possesses a payment or a part of it include where the claimant has used a payment or part of it to purchase an asset.

(4) References in sub-paragraphs (2) and (3) to the claimant are to be construed as including references to his partner (where applicable).”;


Which to me is clearly saying the capital is to be diregarded for 52 weeks or until the claimant no longer holds it. And makes no mention of any deprivation of capital consequences of spending it or giving it away.

My advice to OP's daughter.
Declare the money to Income Support. Then spend it on something which will not affect her benefit (I can't advise what that will be perhaps an antique or two (note that antiques when sold can be subject to capital gains tax unless it is something that would be classed as an item that would be expected to deteriorate over time this commonly refers to mechanical objects like cars or clocks,....antique clocks are not subject to capital gains tax if their value increases. Or give the money away.

When it or some of it is spent, tell the Income Support that it has been spent.

If they hit her with deprivation of capital rules, appeal to a tribunal and fight your corner quoting the above law that it makes no mention of any sanctions for buying assets with the money. And, further, JSA Reg 113 (1)a gives an exception to the deprivation of capital for any payment from a trust fund for a personal injury award.

The point to be aware of here is that I am quoting (113 (1)a) from the original 1996 version. I highly suspect that this will have been ammended to also include lumpsum payments from personal injury just as Schedule 8 Reg 17 was also amended to 17A for lumpsum payments. But I have no proof of this as yet as they do not publish the ammended version online. (not that I can find anyway).

rogerblack

epitome wrote: »

Which to me is clearly saying the capital is to be diregarded for 52 weeks or until the claimant no longer holds it. And makes no mention of any deprivation of capital consequences of spending it or giving it away.

https://forums.moneysavingexpert.com/discussion/3552589 - was a thread I posted on this topic, and the point was made that the disregards are for a given period.

Until you spend the money, it's disregarded.

It's not clear that after you spend the money, the fact you had the money in the past is disregarded.

The same as if you spend 50K after losing your job in a year, then apply for benefit.
The capital regulations did not apply at that time, as you were not claiming benefit.
Yet you can still be accused of having deprived yourself of that capital.

I'm not aware of specific caselaw on this to clarify it, or resources beyond the DMG.

I would be extremely cautious if in this position, and get a decision from the DWP _first_ on any major spending to reduce your capital below the capital limit.
At the least, get professional advice from an actual insured solicitor, who is liable if he gets it wrong.

epitome

As you say it has not been made clear if it would be subject to deprivation rules. I would say that if the money is diregarded then you can do what you like with it within 12 months and they cannot later refer back to money that was once disregarded, that would not be logical. The purpose of disregarding it is exactly to allow you to do what you want with it or put it in a trust.

However you should be careful about what you spend it on because as soon as you use it to buy an asset, that asset will become declarable - a second home for example, a holiday home in Spain etc. The asset can then affect your benefit.
Which is why the regulations refer to disregarded until buying an asset.

However leaving aside the argument of spending it.

I'd like to concentrate for a moment on the idea of putting it into a trust fund, you said earlier that if it is placed in a trust fund after it has been in the claimants bank account then it is no longer disregarded. That it has to be in a trust fund from the outset

• Do courts commonly order compensation payments to be paid directly into a trust fund? I suppose they can do if the victim is non compos mentis or under 18.
• Where do you get the idea from that it cannot be subsequently paid into a trust fund, to be disregarded indefinately?

JSA regs 1996
113.—(1) A claimant shall be treated as possessing capital of which he has deprived himself for the purpose of securing entitlement to a jobseeker’s allowance or increasing the amount of that allowance, or for the purpose of securing entitlement to or increasing the amount of income support, except—

(a)where that capital is derived from a payment made in consequence of a personal injury and is placed on trust for the benefit of the claimant; or

It says nothing of any requirement that the payment must firstly have been paid into a trust fund and not subsequently paid into a trust fund. And DMG 29414 makes no mention of disallowing money moved into a trust within the 12 months.