My Mum continually refused benefits, please help me to help her

In_despair

I hope someone can help me.


I'm a long time user of this site, but have just registered under a new name as a lot of people in real life know my user name on here, and I don't really want everyone knowing my Mums business.


Background:


My Mum inherited a large amount of money (£50,000) around 2 years ago. It was the first time she has had any money to speak of, she's been on benefits for years due to health issues, and as so lived hand to mouth each week.


So suddenly, she has all this money and starts spending. Got the house fully decorated, recarpeted, new white goods, new bed, furniture. Basically did all her house up. Spent around £2500 on clothes / footwear for herself. She never kept track of her spending, just withdrawing from cash machine and spending it. She also paid off her debts to those loan people who come round your house. She also lent around £5000 to my brother who has not repaid her (and I don't think he intends to). On top of this just normal outgoing too - rent, bills, food, etc


I wasn't aware she was spending so much, next thing is she told me she had £20 left in her bank :O I couldn't believe it!


So she then puts a claim in for JSA, after 10 weeks they told her she wasn't eligible to claim due to having over £16,000 in the bank. She lives in council accommodation too so has been refused housing benefit too. She then went to the doctor as with all the worry & stress she is falling apart, can't sleep, eat, she can't barely string a sentence together. He signed her on sick (which I am glad about as she is a nervous wreck, I think she is very close to a breakdown ).


She then got told off the job centre due to the sick note to put in a claim for ESA, which she did (everything has been done with my help, I've filled in all the forms, spoken to people on her behalf etc). She got a text to say she had been awarded ESA, but then a few days later got a letter through to say she hadn't due to having over £16,000 in her bank. She's been served an eviction notice too.


She has no money whatsoever in her bank, myself and another family member have been buying her bits of food and putting electric in her meter. I don't understand how they can keep saying she has over £16,000 when all the bank statement show she has nothing.


I'm at my wits end, I know she has brought this on herself because she stupidly spent her money until she was totally skint.


She's now been around 15 weeks with no money, has the threat of eviction hanging over her and I don't know what I can do to help. I've sent off mandatory reconsiderations for the JSA and for the ESA but don't know what else I can do. Can someone please advise me on what I can do to help her, she's going to be homeless aged 61 and I don't know what to do.

Indie_Kid

Did she keep the receipts of everything she spent the money on?

tomtontom

Time for a big ebay sale? £50,000 buys a lot of non essentials.

Caz3121

In_despair wrote: »

So suddenly, she has all this money and starts spending. Got the house fully decorated, recarpeted, new white goods, new bed, furniture. Basically did all her house up. Spent around £2500 on clothes / footwear for herself. She never kept track of her spending, just withdrawing from cash machine and spending it. She also paid off her debts to those loan people who come round your house. She also lent around £5000 to my brother who has not repaid her (and I don't think he intends to). On top of this just normal outgoing too - rent, bills, food, etc

I don't understand how they can keep saying she has over £16,000 when all the bank statement show she has nothing.

It is worth reading up on deprivation of capital and notional capital
Notional capital is what they will be referring to when they talk about the £16k in the bank account. The decision maker will decide what is "reasonable spending" and how much £50k would be expected to last
If this has been 2 years ago the acceptable spending would be
2 years rent
2 years council tax
2 years utility bills
2 years food bills etc

what is not acceptable (so she would be treated as if she still has the money) is giving money away

There is then the "maybe" spending which the decision maker will decide on
Paying off loans before they are due (may possibly allowed)
white goods (might be ok)
new bed / furniture (possibly some allowance)
new wardrobe of clothes (unlikely)

You have the £50k and you deduct the acceptable spending then you need to hunt out receipts for the other spending and have case for the decision maker on why it was necessary spending
She has gone through the equivalent of £500 every week for 2 years!

Could your brother get a loan to pay her back the £5k so she can pay her rent to avoid eviction

BigAunty

Did she invest any of the money into shares, ISAs, premium bonds or any other kind of investment? I just want to check because it is capital that affects means tested benefits, not just cash savings in the bank.

Although Shelter will not give advice on HB matters, their website is excellent at providing information on how to deal with rent arrears and fight eviction. They have a helpline. She should contact them asap. Consider also booking an appointment with the Citzens Advice Bureau.

Is your brother aware how financially distressed she is? Can he pay her back or is it the case that he can and won't pay her back?

Look into local foodbanks for her. They often see people who have had their benefits stopped. She may need a referral from somewhere like the job centre or Citizens Advice Bureau.

Contact her local MP - they are there to serve her. It should be bought to their attention that the council error may precipitate her into homelessness and is causing her immense suffering when she suffers from a mental illness.

Google 'deprivation of capital' to get your head around the risk that the council could launch a case against her to see if they believe that she has deliberately deprived herself of capital in order to qualify for benefits. It's a very complex area, there are no easy set rules to understand.

I think you should prepare for a worst case scenario that the DWP/Local council *may* later want her to explain where her capital went if they are then satisfied that she now does not have any money.

So as a preparation step you should get her to draw up a list of her spending in the period, from rent, council tax, utility bills, repairs, new furniture and so forth. This is just to get a handle on where it went in case they raise a case against her, just a risk mitigation strategy for her.

Benefit authorities can be unimpressed when a benefit claimant appears to have burned quickly through their capital and can be suspicious when the claimant appear to have gifted it (such as a casual loan to a relative that has no formal repayment plan or proof that it was a loan rather than a gift).

If they think a person has intentionally deprived themselves of capital, they then apply a 'notional capital' calculation where they treat the claimant as still having the capital, thus excluding them from means tested benefits for a period of time. There's nothing on that list of goods that ring alarm bells with me other than the unwise loan/gift to the son.

Does she have proof of the doorstep loans she had?

Don't panic about deprivation of capital and don't upset her at the small prospect of this kind of review, just try to get her set up her ducks in a row just in case, that it's just something to be mindful of.

Shovel_Lad

In_despair wrote: »

My Mum inherited a large amount of money (£50,000) around 2 years ago. It was the first time she has had any money to speak of, she's been on benefits for years due to health issues, and as so lived hand to mouth each week.

Was she receiving any benefits when she inherited the money?
If so - which ones?

TELLIT01

If any of the benefits she was on when she inherited the £50k were income related it's possible she has received benefit to which she was no longer entitled. She should have informed the relevant authority at the time of the inheritance.
Spending (blowing) £50k in 2 years could certainly be considered as deprivation of capital based on what you say the money went on.

Marshmallow82

Well there is the £5k your brother received, does he want her to be homeless?

Is there anything else that can be taken back?

In_despair

Thanks for replying, I really appreciate it. I forgot to say I have already sent an expenditure list to HB and JSA and have enclosed one alongside the bank statements to ESA.


My brother, well, since the loan he has paid her a grand total of £90 since 2 years ago - £60 of this is in the last 2 weeks. Yes he is aware of how much she is struggling, but seems to put everything else before repaying my Mum i.e. I can't pay you because kids need XYZ or pretends a direct debit got taken twice so is skint & various other rubbish excuses. I can't stand him at the moment...


Receipts, she doesn't have any and paid pretty much everything cash so no way to trace through the bank statements. I suggested she could begin to sell things, but she doesn't really have anything that is worth a lot, it's just stuff, household stuff that she needs.


She didn't invest anything - I wish she would've, it makes me so angry that the money has gone so quickly.


I've got a feeling she was on income support before, but not 100%. Whatever benefit she was on she notified them immediately as she knew she couldn't claim with having money in the bank, she certainly wouldn't benefit fraud!


I've heard of deprivation of capital but not notional capital, so I will research that later. I agree that it could be seen as deprivation of capital as even I can't believe how fast she has spent the money, but it's not like she bought new cars, had expensive holidays etc it's just...gone.


Also, thanks for the suggestion of Shelter, I've heard they do great work.

Shovel_Lad

In_despair wrote: »

I've got a feeling she was on income support before, but not 100%. Whatever benefit she was on she notified them immediately as she knew she couldn't claim with having money in the bank, she certainly wouldn't benefit fraud!

If you have over £16K in savings you can't get income support (and a number of other benefits). £16k is the cut off point. Any savings between £6k and £16K affect how much you get.
https://www.gov.uk/income-support/what-youll-get
https://www.gov.uk/income-support/eligibility

pmlindyloo

Did your mum actually receive a letter saying that they were applying notional capital rules?

Or a letter saying that she had £16000 in capital?

Important difference.