Would this be deprivation of capital?

Hummingbird123

This might be a sensitive issue but i really need clarification on the question i have...

I'm currently receiving income related ESA, i have savings under the lower limit (just over £3000). I've gathered that i can spend the money on whatever i want to and deprivation of capital doesn’t apply to savings under £6000.

The thing is I’m due a personal injury compensation pay out very soon (estimated around £2000-£4000) which might then take me over the savings limit of £6000, which i have absolutely no problems in my benefit being reduced accordingly (what's £2 off my benefits​ a week! ).

The issue i have is once I’m over the lower savings limit of £6000, i am then under the scrutiny of the DWP on what i can then spend my savings on should i want to, with deprivation of capital rules now applying, plus having to provide DWP with regular bank statements etc, all headache inducing and something i would like to avoid!

Would it be against the rules to use some my current savings now (the £3000) shortly before I’m due to receive my compensation payout so when i do finally receive the compo money I’m still under the total savings limit? Therefore able to use the money as i wish?

pmlindyloo

Hummingbird123 wrote: »

This might be a sensitive issue but i really need clarification on the question i have...

I'm currently receiving income related ESA, i have savings under the lower limit (just over £3000). I've gathered that i can spend the money on whatever i want to and deprivation of capital doesn’t apply to savings under £6000.

The thing is I’m due a personal injury compensation pay out very soon (estimated around £2000-£4000) which might then take me over the savings limit of £6000, which i have absolutely no problems in my benefit being reduced accordingly (what's £2 off my benefits​ a week! ).

The issue i have is once I’m over the lower savings limit of £6000, i am then under the scrutiny of the DWP on what i can then spend my savings on should i want to, with deprivation of capital rules now applying, plus having to provide DWP with regular bank statements etc, all headache inducing and something i would like to avoid!

Would it be against the rules to use some my current savings now (the £3000) shortly before I’m due to receive my compensation payout so when i do finally receive the compo money I’m still under the total savings limit? Therefore able to use the money as i wish?

Personal injury payments are disregarded for 52 weeks and so you can spend this money however you wish.

It might be a good idea to inform the DWP when you receive the payment. it is likely that they will want to see evidence that this payment is for personal injury.

QUOTE from Decision Makers Guide:

Any payment made because of a personal injury to the claimant or partner and not
placed in trust is disregarded for a period
1. beginning with the first date of receipt by the claimant or partner of such a
payment and
2. ending when
2.1 the claimant or partner no longer has any part of the payment
remaining (including where the claimant or partner has used any part of
the payment to buy an asset) or
2.2 52 weeks have elapsed
whichever is the sooner1
.
1 ESA Reg, Sch 9, para 17

Hummingbird123

Thanks for the reply.

I forgot to include i had received an interim payout of a £1000 almost a year to the day (which is part of the £3000 savings) from the compensation claim, so the 52 weeks time limit is almost up unfortunately.

But i will inform the DWP when i receive the rest of the compensation, i also have injury reports on hand so providing evidence shouldn't​ be a problem.

So would i get into trouble reducing my current savings before I'm expecting to receive a further payout which might take me over the savings limit as it stands?

[Deleted User]

It will all depend on what you spend the £ on, a cruise would be DOC a new sofa probably wouldn't be.

Hummingbird123

So any spending of my current savings well below the 6k limit will have to be justifiable otherwise it is deprivation of capital?

TELLIT01

Any spending done specifically to be able to claim benefits is likely to be classed as Deprivation of Capital. For example blowing a couple of grand on a fancy new TV. If you can show that the spending was at a reasonable level then you won't have a problem. As the combined figure is only likely to be just over the minimum figure they care about (£6k) I really think you are worrying needlessly.

marliepanda

Hummingbird123 wrote: »

So any spending of my current savings well below the 6k limit will have to be justifiable otherwise it is deprivation of capital?

If you are doing it for the sole purpose of continuing to receive benefits (which it certainly seems by the way you are wording it) then yes.

Hummingbird123

Thanks for all your replies.

I was just interested in the DOC rules.

I'm not saying i would blow a significant amount just maintain my current level of benefits (buying an expensive plasma TV while on welfare has got to be the most stereotypical chavy things to do! Lol).

More just to prevent any complications in having to keep contacting the DWP every time i want to make a future purchase etc. I'm totally against frivolous spending anyway (spending just on essentials and necessities) so it shouldn't make a difference to me either way.

Mersey_2

Hummingbird123 wrote: »

So any spending of my current savings well below the 6k limit will have to be justifiable otherwise it is deprivation of capital?

No.


Pmlinydloo is right.


Essentially, redress is not capital or income.

Mersey_2

Hummingbird123 wrote: »

The I’m still under the total savings limit? Therefore able to use the money as i wish?

Plus remember, £6k isn't the total savings limit (it's the lower threshold) and it's anything above £6k of net assets which is essentially what is used - as an Upper Tribunal ruling means that debts repayable on demand are deducted from any gross capital to reach the net capital figure which is used.


So eg a claimant with £8k in the bank but with an overdraft of £2.5k, is deemed to have £5,500 in capital [net assets].

latest_flame

Hummingbird123 wrote: »

This might be a sensitive issue but i really need clarification on the question i have...

I'm currently receiving income related ESA, i have savings under the lower limit (just over £3000). I've gathered that i can spend the money on whatever i want to and deprivation of capital doesn’t apply to savings under £6000.

The thing is I’m due a personal injury compensation pay out very soon (estimated around £2000-£4000) which might then take me over the savings limit of £6000, which i have absolutely no problems in my benefit being reduced accordingly (what's £2 off my benefits​ a week! ).

The issue i have is once I’m over the lower savings limit of £6000, i am then under the scrutiny of the DWP on what i can then spend my savings on should i want to, with deprivation of capital rules now applying, plus having to provide DWP with regular bank statements etc, all headache inducing and something i would like to avoid!

Would it be against the rules to use some my current savings now (the £3000) shortly before I’m due to receive my compensation payout so when i do finally receive the compo money I’m still under the total savings limit? Therefore able to use the money as i wish?

Its £2 a week, so why worry?