Paying debts with inheritance ? Deprivation of capital ?

Nataliebell1991

Hi really worried got £10,000 inheritance and used half to pay off debts will this be classed as deprivation of capital ? I’m due another 80.0000 when my grandmothers house sells.
I really don’t want to get in trouble can’t get a clear answer online.

Also what else is classed as deprivation of capital ? If I treat the kids to toys days out ect will that be allowed thanks x:(:(

Alice_Holt

This is probably a question for the Tax Credits & Benefits board.

I assume you are in receipt of an income-related benefit?

The DWP class deprivation of capital as the act of depriving youself of capital in order to be eligible for an award, or a higher award of benefits. It is a grey area, with the final decision down to the DWP decision maker (but this decision can be challenged at tribunal).

The DWP Decision makers guide (google DMG vol5 chapter29) says the following on debt repayments:

"Decision makers should decide if a debt paid by claimants or partners is a legal debt capable of enforcement. Some of the things which the decision maker will need to take into account when making the decision is
1. the size and importance of the debt
2. the circumstances under which the loan was made
3. any written or other contemporaneous evidence
4. the relationship of the parties involved."

and

"Claimants have a choice if they pay back a debt before the agreed date, such as when they pay off their mortgage and the agreement says it is not due to be paid back for another 15 years;
- pay more than the amount due on a debt, such as when they pay more than the minimum payment on a credit card debt unless the payment has been made to remove the threat of high interest payments and the decision maker decides it was reasonable for the claimant to act in the way that they did;
- pay back a debt which is not a legal debt capable of enforcement;
- make payments to a flexible current account mortgage which reduce the outstanding balance on the mortgage."

However the DM's decision is subject to the overriding principle that:
"Decision makers have to show the claimant’s or partner’s purpose was to get benefit or more benefit if they decide claimants or partners have deprived themselves of capital.
Getting benefit or more benefit may not be the claimant’s or partner’s predominant purpose but it must be a significant one. So when claimants give away all their capital to a relative just before claiming benefit their
1. main, or predominant, purpose may be to benefit the relative and
2. intention, or significant purpose, may be to reduce their capital so they can get benefit or more benefit."

Other spending is allowed as long as it is not classed as "spending the capital extravagantly or imprudently", so for instance replacing an ageing car with a more reliable version should be fine but the purchase of a new luxury vehicle would be likely to be viewed as deprivation of capital.

Alice_Holt

This is from the OP's profile:

"Nataliebell1991
Join date: 12-12-2017
Last activity: 12-12-2017 11:41 PM"

It puzzles me why posters put a question on here, but then never return to look at replies.

bowlhead99

Alice_Holt wrote: »

It puzzles me why posters put a question on here, but then never return to look at replies.

If I get logged out of forums - which can be in as little as a half hour on some of them if I forget to check the "keep me logged in" box -then I invariably have to reset my password to be able to log in again, which involves either remembering what username I used for the account or what email address I used for the account. So I sometimes just kick the problem down the road and browse as guest until I actually have something more I want to post.

So, the fact the person didn't bother to log in again since 12/12 doesn't actually mean they haven't been checking back for responses.

Still, it's pretty frustrating to post an informative explanation in response to a newbie query and then that newbie can't be bothered to even acknowledge that you did that for them. But, 'tis the season to help other people without demanding any thanks or acknowledgment. Merry Christmas and thanks for your contributions to the forum!

EdSwippet

Alice_Holt wrote: »

It puzzles me why posters put a question on here, but then never return to look at replies.

In mitigation, the OP might perhaps have read the replies either without being logged in or in some other anonymous manner. The site probably would not -- or could not -- register these as account 'activity'.

Alice_Holt

bowlhead99 wrote: »

Still, it's pretty frustrating to post an informative explanation in response to a newbie query and then that newbie can't be bothered to even acknowledge that you did that for them. But, 'tis the season to help other people without demanding any thanks or acknowledgement. Merry Christmas and thanks for your contributions to the forum!

Many thanks BH99,

I always read your contributions carefully, as I find them extremely helpful and informative.
I started investing some decades ago, and still find the comments on this forum very useful.

I generally post on the Benefits & Tax Credits board, as I have some knowledge of the benefits system (and in particular disability benefit appeals) from my local CAB.
(And I'm aware that not all posters can get to their local CAB for F2F advice,
some CAB's don't have the resources to give detailed appeal advice,
and the demand on local volunteer based advice charities is huge and increasing - certainly outstripping most CAB's capacity.)

However, I do find that it can be frustrating when some posters
don't come back,
give incomplete info,
don't clarify important facts,
ignore sensible advice,
go off on a tangent,
turn out to be hoaxes, etc, etc.

Sadly, it seems to happen quite a lot.

Anyway - Happy Christmas & Best wishes for 2018.