Notional income - how long?

rogerblack

HappyMJ wrote: »

They've accounted for all but £12,000.

Living costs are also taken into account. Income based JSA would not be payable to a claimant with more than £16,000 and that amount can also be deducted from the notional capital each month.

It was my understanding that the various means-tested benefits did not share one notional capital 'pot'.
That is - you have to do the computation for JSA, HB separately - and can't simply add HB to JSA.

Even if that results in being not paid a total exceeding the notional capital.

HappyMJ

rogerblack wrote: »

It was my understanding that the various means-tested benefits did not share one notional capital 'pot'.
That is - you have to do the computation for JSA, HB separately - and can't simply add HB to JSA.

Even if that results in being not paid a total exceeding the notional capital.

It depends on how picky the council are being. Receipts can be used to prove expenses above the JSA level of income so you could spend much more than just JSA. A JSA claimant gets free prescriptions, free dental, a warm home discount they can all be used as expenses if a claimant isn't getting JSA. A claimant proving that they spent thousands of pounds a month on expenses could be considered not to have deprived themselves of capital.

It really depends on the intention the claimant had which is very difficult to prove either way. If the claimant was just paying for normal living expenses at whatever level (there's no need to live on the poverty line after a period living on a decent salary) then it's certainly not deprivation but if they are just giving the money away then that can be considered deprivation.

I gather in this case the claimant has £12,000 of cash withdrawals and nothing to show what they spent it on so council consider that they still have it.

Housing_Benefit_Officer

HappyMJ wrote: »

It depends on how picky the council are being. Receipts can be used to prove expenses above the JSA level of income so you could spend much more than just JSA. A JSA claimant gets free prescriptions, free dental, a warm home discount they can all be used as expenses if a claimant isn't getting JSA. A claimant proving that they spent thousands of pounds a month on expenses could be considered not to have deprived themselves of capital.

It really depends on the intention the claimant had which is very difficult to prove either way. If the claimant was just paying for normal living expenses at whatever level (there's no need to live on the poverty line after a period living on a decent salary) then it's certainly not deprivation but if they are just giving the money away then that can be considered deprivation.

I gather in this case the claimant has £12,000 of cash withdrawals and nothing to show what they spent it on so council consider that they still have it.

If someone has blown £115,000 then yes we can get very very picky. Each Council and each Council Officer could treat identical claimants differently though as it would be down to the individual to interpret the legislation. We normally pass to a manager to rubber stamp our decision.

rogerblack

Housing_Benefit_Officer wrote: »

Each Council and each Council Officer could treat identical claimants differently though as it would be down to the individual to interpret the legislation.

To add a point - the decisions made by these officers need only to be correct on a 'more likely than not' basis.
They do not need to prove anything beyond reasonable doubt, for example.
You can in principle appeal the decision - but again - at no point does it need to be proved at any point in the appeal chain that a given expenditure was beyond reasonable doubt intended to deprive the claimant of capital.
Just that it was more likely than not.
(If a criminal fraud prosecution is involved, that is of course a different standard of proof)

HappyMJ

Housing_Benefit_Officer wrote: »

If someone has blown £115,000 then yes we can get very very picky. Each Council and each Council Officer could treat identical claimants differently though as it would be down to the individual to interpret the legislation. We normally pass to a manager to rubber stamp our decision.

And a reminder to everyone thinking if they might get housing benefit in the near future to keep every receipt that they possibly can.

There's no requirement for someone with £115,000 in the bank to live on value sausages as recommended on Old Style Money Saving for a household on a limited budget. If the claimant is used to having a 10oz steak every day that's not deprivation. Keep the receipts. Spending money on cigarettes, alcohol or even narcotics isn't deprivation either...but try and get a receipt for those narcotics and you'll be laughed at by the dealer so that one's very unlikely but it has been known for addicts to get an inheritance squander it on drugs and get HB back in a relatively short period of time.

I'd find it very difficult to go through £115,000 in such a short time but in this case it appears the claimant has proven £103,000 of expenses...it's just that last £12,000 they're having trouble with.

rogerblack

HappyMJ wrote: »

If the claimant is used to having a 10oz steak every day that's not deprivation.

This is very unclear.
It could be very reasonably argued that someone who knows they will have a (say) 4000 pounds a year nomatter their capital in six months, ongoing (an amount equal to the benefit entitlement whatever it is) would not spend in such a manner as they were accustomed to, and would moderate their spending.
If they can reasonably be seen as having not moderated it only because they knew that their capital was stopping them getting benefits - it may indeed count as deprivation.

I do - however - totally agree with keeping reciepts.

HappyMJ

rogerblack wrote: »

This is very unclear.
It could be very reasonably argued that someone who knows they will have a (say) 4000 pounds a year nomatter their capital in six months, ongoing (an amount equal to the benefit entitlement whatever it is) would not spend in such a manner as they were accustomed to, and would moderate their spending.
If they can reasonably be seen as having not moderated it only because they knew that their capital was stopping them getting benefits - it may indeed count as deprivation.

I do - however - totally agree with keeping reciepts.

It is very unclear. The final decision really lands on the desk of a manager who will make the final decision.

There is no legal requirement to reduce your spending. You can continue to spend at the same rate at which you were used to when you were working and earning a decent salary....so no deprivation. Morally, yes someone should reduce spending and make £115,000 last for the rest of their life and with interest income it's entirely possible to do, legally they don't have to.

Then again you don't have to show statements from over 12 months ago in most cases and certainly not more than 6 years ago (they're impossible to get anyway) so you could empty your accounts give all the money away and live on the remaining £16,000 for a year until that money runs out completely then claim benefits. Lottery winners who have won millions and have given all their money away have also been able to claim benefits when the money has run out. Did they give their money away intending to reclaim benefits? Most probably not so not deprivation.

rogerblack

HappyMJ wrote: »

I You can continue to spend at the same rate at which you were used to when you were working and earning a decent salary....so no deprivation.

My understanding of the caselaw I have read is the phrase 'Spending done with a significant operative purpose of obtaining (more) benefit' is relevant.

Unless you are severely mentally ill, for you to not modify your spending after becoming unemployed and having savings that will not last forever raises the question of where you think your money will come from in the future.

If that answer is 'benefits' - then it's pretty clear that spending as you used to may well be deprivation.

The only purpose of the spending does not have to be to obtain benefit - it only has to be significant.

cannyshopper_2

hmmmm... reading some of these posts gives food for thought.

what about money spent on house repairs - I would hazard a guess not a problem - but where does "repairs" start becoming renovation? I ask because someone inheriting say £50K might regard replacing a 20-year-old kitchen & bathroom and having new windows etc might be more important that the principle of not claiming anything from state benefits for the next couple of years. But what about a modest home extension?
A holiday might well be regarded as OK, but does that mean 2 weeks in Croatia or a month's escorted tour of the highlights of Japan?
Wondering aloud what sort of discretion the assessors have, in deciding what constitutes deliberate deprivation. Presumably they have some written guidelines (no doubt confidential) but it seems that the claimant's attitude also influences their decision.

cannyshopper_2

rogerblack wrote: »

My understanding of the caselaw I have read is the phrase 'Spending done with a significant operative purpose of obtaining (more) benefit' is relevant.

Unless you are severely mentally ill, for you to not modify your spending after becoming unemployed and having savings that will not last forever raises the question of where you think your money will come from in the future.

If that answer is 'benefits' - then it's pretty clear that spending as you used to may well be deprivation.

The only purpose of the spending does not have to be to obtain benefit - it only has to be significant.

a bit off topic, but resonates with me in regard to pension planning.
I don't think I will live to reach 80, so my plans are not that long-term. I doubt I will have any savings/investments left by then. In the meantime my spending is not excessive nor profligate, but does include a few "luxuries" like holidays, day trips and restaurant meals. Should I, by some miracle, live longer than 80 I would presumably then become dependent on means-tested benefits. Knowing this, should I be trying to live as frugally as possible to eke out my meagre pension pot?