Is a benefit back payment classed as savings ?

nashly

Crossed my mind as my wife would have spent it if she was not denied it in the first place and it would not have put us over the savings threshold of £6,000 which it does now for council tax reduction which we get as I work part time.
Yey penalised again no doubt through no fault of our own me thinks!

richard9991

nashly wrote: »

Crossed my mind as my wife would have spent it if she was not denied it in the first place and it would not have put us over the savings threshold of £6,000 which it does now for council tax reduction which we get as I work part time.
Yey penalised again no doubt through no fault of our own me thinks!

benefit back pay is ignored for 12 months

epitome

Benefit arrears are ignored for the life of the claim, possibly longer, I mean it would be very unfair if it was ignored for ESA IR and then you claimed JSA IB and then all of a sudden it becomes deductible, So I imagine it might be ignored for other claims aswell.

Edit- Please see my otherpost below*

mikey_bach

Benefit arrears are disregarded for twelve months.
Then they are classed as capital......

nashly

I dont have an income based claim mikey

epitome

Having checked the legislation, the reason there are different answers on this thread "12months" or "for the life of the claim" is as follows...

For a simple arrears payment .....i.e.
After winning an appeal for being found "fit for work" for example..... or
After applying for SDP & backdating etc etc
Then the disregard period is 52 weeks.

However, if the arrears payment (and/or compensation for) is for £5000 or more and the payment(s) is classed as "Official Error" then it is disregarded for the life of the claim ... and as I suspected....... also for the life of any subsequent claim of any income based benefit as long as they begin immediately after the end of the previous award.

“official error” means an error made by an officer of the Department of Social Security or the Department for Education and Employment acting as such which no person outside either Department caused or to which no person outside either Department materially contributed;

The question now to be answered/discussed is....... are all standard arrears from winning appeals classed as "official error"?
Because you could say that the court has determined the officer made an error in judgment. I would say that is exactly what the court is saying. So this means ANY arrears won at tribunal over £5000 would be disregarded for the life of the claim.

Arrears after applying for SDP backdating, I don't think would be classed as official error because the customer -I understand- is expected to have to apply for it...it is not automatic like EDP is.

richard9991

nashly wrote: »

I dont have an income based claim mikey

savings and capital or totally ignored for non income based benefits

epitome

The OP is talking about a council tax reduction which is affected by savings.
Council Tax probably also disregards the savings/arrears above in the same way.

But his wife might be on ESA WRAG C and it will end after 1 year and then this will all be relevant when claiming ESA IR.
Or similarly JSA C ending after 6 months.

nashly

Thanks for replies evey one, my wife is moving from Incapacity to ESA over the next few months and hopes to be put in the support group, she has just won a two year battle over DLA which she now gets LRC and LRM which involves a back payment taking us over the £6000 threshold.

pmlindyloo

epitome wrote: »

Having checked the legislation, the reason there are different answers on this thread "12months" or "for the life of the claim" is as follows...

For a simple arrears payment .....i.e.
After winning an appeal for being found "fit for work" for example..... or
After applying for SDP & backdating etc etc
Then the disregard period is 52 weeks.

However, if the arrears payment (and/or compensation for) is for £5000 or more and the payment(s) is classed as "Official Error" then it is disregarded for the life of the claim ... and as I suspected....... also for the life of any subsequent claim of any income based benefit as long as they begin immediately after the end of the previous award.

“official error” means an error made by an officer of the Department of Social Security or the Department for Education and Employment acting as such which no person outside either Department caused or to which no person outside either Department materially contributed;

The question now to be answered/discussed is....... are all standard arrears from winning appeals classed as "official error"?
Because you could say that the court has determined the officer made an error in judgment. I would say that is exactly what the court is saying. So this means ANY arrears won at tribunal over £5000 would be disregarded for the life of the claim.

Arrears after applying for SDP backdating, I don't think would be classed as official error because the customer -I understand- is expected to have to apply for it...it is not automatic like EDP is.

I like your reasoning that winning an appeal should be classed as an official error. Not sure if this has ever been tested in court and wouldn't like to have to go through the court procedure to find out!

If the OP relies on this back payment being disregarded for one year rather than indefinitely then unless they 'blow' the whole lot on an exotic holiday I believe he would be pretty safe in not coming under the deprivation of capital rules.

Personally I would telling the OP to be proactive and to contact the council re: his council tax reduction and making them aware of this back payment for DLA as they have a nasty habit of finding out about large cash sums going into bank accounts and would query where it came from (and suspend the CTB while they were investigating!)

To save the hassle of this ever being brought up by the council I would go even further and put it in a separate account and keep receipts for any expenditure.

Or do you think this is overkill?

ComeTheRevolution

As her needs were the same during the time she didn't receive the payment as they are now since she has, there's a good chance assistance was loaned to bridge that gap. Whether via credit cards, family or friends it would still require remuneration. That may be the simplest explanation should anyone mention the sum.