Benefits entitlement --- Can I deduct unpaid debt from the declared savings?

syncopy

Hi,

I am currently liable (by the law of an overseas country) for a certain amount of money (say £30,000) to be paid back to an organization (based in that country) according to a contract between us. I must pay back this amount within 12 months.

However, I didn't pay it yet.

My total current savings (including bank accounts and cash savings - including some cash in foreign currencies) are more than £16,000.

If I paid the debt now (but I cannot), the remaining saving (if any) will be less than £16,000 (which is the upper limit of the normally allowed savings for entitlement for housing benefits).

My question is: Is the state of being in debt can be legally considered when calculating my savings? Is it legally possible to deduct the unpaid amount of debt from the declared savings?

Thanks in advance for your advice.

S

dippy3103

No, what you owe would not be deducted from your savings when they are calculated

tomtom256

If it's in a different country what UK law states you have to pay it?

Is it a priority debt?

kaya

Maybe I can deduct all my future mortgage repayments from my savings then :-)

specialboy

I might be able to deduct my future bar tab from mine.

syncopy

Thank you for confirming that

tomtom256: I am willing to pay it within a year, but I don't know whether they could reach me through the UK laws if I failed to pay it back in due time. Is anyone here familiar with similar case?

pmlindyloo

We have reciprocal agreements for the enforcement of debts with other countries. See here for further information:

http://www.consumeractiongroup.co.uk/forum/showthread.php?250889-Can-I-Be-Sued-For-An-Overseas-Debt

As regards benefits some debts can be paid from savings if they require immediate payment . eg if you have a court order against you - and this would not come under deprivation of capital.

It might be worth seeking professional advice about this.

jlawrence

syncopy wrote: »

Hi,

I am currently liable (by the law of an overseas country) for a certain amount of money (say £30,000) to be paid back to an organization (based in that country) according to a contract between us. I must pay back this amount within 12 months.

However, I didn't pay it yet.

My total current savings (including bank accounts and cash savings - including some cash in foreign currencies) are more than £16,000.

If I paid the debt now (but I cannot), the remaining saving (if any) will be less than £16,000 (which is the upper limit of the normally allowed savings for entitlement for housing benefits).

My question is: Is the state of being in debt can be legally considered when calculating my savings? Is it legally possible to deduct the unpaid amount of debt from the declared savings?

Thanks in advance for your advice.

S

Hi I should hope that you can't!! I'm in a similar boat with an interest only £100,000 mortgage and £100,000 on deposit with the same bank as it was a condition of the mortgage. The debt is due to be repaid in 2020.
I have been told by the DWP that my savings must be used first before I can get any benefits. The question I asked the DWP was 'what happens in 2020 when most of the money is gone, who is going to repay my mortgage' Was told not their problem.


So no you cannot reduce your capital by knocking off your debts and generally you cannot either repay them.

pmlindyloo

jlawrence wrote: »

Hi I should hope that you can't!! I'm in a similar boat with an interest only £100,000 mortgage and £100,000 on deposit with the same bank as it was a condition of the mortgage. The debt is due to be repaid in 2020.
I have been told by the DWP that my savings must be used first before I can get any benefits. The question I asked the DWP was 'what happens in 2020 when most of the money is gone, who is going to repay my mortgage' Was told not their problem.


So no you cannot reduce your capital by knocking off your debts and generally you cannot either repay them.

You have also be told how to challenge this decision.

jlawrence

pmlindyloo wrote: »

You have also be told how to challenge this decision.

Thanks, I have sought advice from AgeUK who state that the DWP are totally correct in their approach. It is clear that I am attempting to obtain benefits by trying to argue that the money should be ring fenced. I was also told by them that I could not repay the mortgage early if the intention of doing so was so be able to claim benefits which it is.

So there can be no challenge - it is black & white. If you have capital it must be used before you are allowed benefits and the DWP will have to agree that using the amounts intended is reasonable.
So that is the final answer to my predicament it seems.

GirlFromMars_2

jlawrence wrote: »

Thanks, I have sought advice from AgeUK who state that the DWP are totally correct in their approach. It is clear that I am attempting to obtain benefits by trying to argue that the money should be ring fenced. I was also told by them that I could not repay the mortgage early if the intention of doing so was so be able to claim benefits which it is.

So there can be no challenge - it is black & white. If you have capital it must be used before you are allowed benefits and the DWP will have to agree that using the amounts intended is reasonable.
So that is the final answer to my predicament it seems.

Um ... an Age UK advisor is not a DWP Decision Maker. The only person who can make a decision in your case is a DWP decision maker. Write to the DWP laying out your case and ask for a decision from a Decision Maker.

Go and read my first thread on the forum, I was in a very similar position as you, having been told by a benefits advisor that what I was planning to do was Deprivation of Capital (and everyone other than HBO on the forum agreed that what I was doing was DOC).

However when I spoke to DWP/Local Authority Decision Makers it turned out that they were totally happy with what I was planning to do with my money, and gave me a written decision stating that what I planned to do was not Deprivation of Capital.

The advice is that the only person who can give you a decision is the DWP Decision Maker.

Nobody else can make this decision including an Age UK advisor, or anybody else on this forum.

Write to the DWP stating your case and see what they have to say, they may tell you to live off the capital, but they might not, so don't complain until you have actually been given a decision from the person who counts.