Housing benefit

benefitbaby

In reply to belladonna13

If you are deemed to have deprived yourself of capital then the DWP/LA can treat you as having all or some if it - this is notional capital.

EG you inherit £20k you spend £6k on a flash holiday, the DWP decide you have deprived yourself of the capital so treat you as still owning it, as a result you have actual capital of £14k and notional capital of £6k. Result - no benefit.

Same example however this time you gave £1k away and spent £5k on essentials then the DWP would say you had deprived yourself of £1k and treat you as still having it. As a result you have actual capital of £14k and notional capital of £1k, total savings of £15k.
Result - benefit entitlement based on savings of £15k

princessdon

BigAunty wrote: »

I don't believe that benefit organisations will respond to case by case requests from claimants asking for authorisation before spending capital.

Some of my clients have reported - One wanted a family holiday overseas and asked, they were told it was OK, another wanted a new car, were told it was OK

Don't think they got it in writing though (but that would be the optimum) but verbally were assured it was OK.

benefitbaby

belladonna13 wrote: »

I did read somewhere that if you are still entitled to some income support, despite having notional capital, you are entitled therefore to full HB & CT, is that correct?

The DWP do the initial assessment for IS and if you qualify for at least £1 (or 50p can't remember) then you will be 'passported' to full HB/CTB.

belladonna13

Thank you for replies.

I think I understand notional capital rules - but is this the correct formula for the way the DWP treat someone with notional capital -

Inherit 30k found to have 5k notional capital = £1.00 for every £250.00 of notional capital, so £4.00 for every £1000.00 then £5000.00 x £4.00 = £20.00 taken off income support per week?

If you had actual capital of £6000.00 (allowed savings) and 5k notional = £11,0000, then would you have £20.00 taken off income support each week or would it be more?

It is the formula that remains confusing for me and although I will ask permission for major purchases, if they do not give me that in writing and only verbally over the phone, then I still fear they may still say I have notional capital at the end of the day, due to various scenarios I have read.

Does anyone know the formula they use to deduct from benefits on the grounds of notional capital?

I am sorry I cannot grasp this, but I would feel easier if I knew what the outcome will be if I am told at the summing up that I have notional capital.

It would be so much easier if a straightforward list of what is/isn't allowed to be spent, was actually given at the outset, in order to avoid this.

Morlock

belladonna13 wrote: »

Inherit 30k found to have 5k notional capital = £1.00 for every £250.00 of notional capital, so £4.00 for every £1000.00 then £5000.00 x £4.00 = £20.00 taken off income support per week?

If you had 5k of notional capital but nothing else, it would not affect your benefit entitlement. If you had 30k plus 5k of notional capital you would not have any benefit entitlement (except maybe some non-means tested benefits) as you would be deemed to have 35k.

belladonna13 wrote: »

If you had actual capital of £6000.00 (allowed savings) and 5k notional = £11,0000, then would you have £20.00 taken off income support each week or would it be more?

That is right, £20 per week week deducted as you are 5k over the 6k limit.

belladonna13 wrote: »

Does anyone know the formula they use to deduct from benefits on the grounds of notional capital?

The same as for capital, any notional capital is added on to your existing capital and then entitlements or deductions are calculated.

belladonna13

Thank you for that Morlock.

I am heartbroken still at losing my dad, but since I found out the money he had and that it is now mine, its been a nightmare for me.

I guess if I just keep spending like I do now there should be no problem, and if there is I can prove that I have always spent the same amount with bank statements.

I now know, thanks to benefitbaby, that if I retain some income support I will get full HB and CT...but with all the upcoming changes to benefits (extra room charge),CT changes, PIP, ESA etc I will, no doubt, lose some of my weekly income and if I were to lose more due to notional capital then I would worry how I would be able to cope and pay for the help and services I require.

I will try and get written permission for major items and will just hope everything works out.

Again, I thank you.

fluffymovie

I found this thread which may or may not help clarify how we calculate it

https://forums.moneysavingexpert.com/discussion/479388

belladonna13

Hahahahaha fluffymovie, thanks for that , I am now totally confused again. I read an example and think "yes, I understand" then read another example and I lose that glimmer of understanding again.

If you add diminishing notional capital to the equation it becomes total gobbeldygook to me and my head really does start to hurt.

I am glad that there are people in this world that understand these things, but I am definitely one of them, lol.

Will re-read link again later, but doubt that I will have a light-bulb moment!