Deprivation of capital

NPJ

Hello.  We're currently receiving the 'Limited capability for work' element of Universal credit following my triple bypass surgery last April.  We're getting married in May and have paid for a large chunk of wedding expenses, but still have some expenses such as decoration of the reception venue (chair and table coverings etc), wine for the toast, flowers, alterations to bridesmaid dresses and a little still to pay off the balance for our honeymoon.  I'm considering taking one of my pension pots as a lump sum. This will be £9,686 and after tax will take our savings above £6,000 but not over £16,000. 

If I spend any of the money on the wedding expenses listed above, is it possible (or likely), that this would be seen as a deliberate deprivation of capital, bearing in mind that our wedding service was booked last May, and the reception and honeymoon in June ? 

Also, on the 15th September 2022, we booked and paid the deposit for our family caravan holiday in July of this year.  There is an outstanding balance of £578 due to be paid between 26th May and 9th june.  Would paying this also be viewed as a deprivation of capital ? 

Additionally,  I had a near death experience following my surgery last April and was in a coma for five days.  This caused concern that my fiance would have been in real financial difficulties had I not pulled through.  As a result of this, I bought a funeral plan and am paying instalments of £55 a month until 2030.  I could possibly lessen this monthly cost by paying a sum off this.  I've also been putting a regular amount away into a separate account each month to buy a burial plot.  And (if it's possible), I'd like to pre-purchase a headstone.  Would these two expenditures be allowed? 

And finally, I have had my 19 year old car for 6 years and as many things have been going wrong with it lately, I'm thinking that it may be a good idea to replace it before the MOT is due at the end of February.  I don't pay a lot for cars, and would only spend approx £1,000 on a replacement.  Again, would this likely be treated as deprivation of capital ?  Thank you for your time.

poppy12345

UC is based on your circumstances on the last day of your assessment period. Therefore if you have less than £6,000 on that day your UC entitlement won't be affected.

calcotti

There are no definite rules.  The rules are not meant to prevent you spending your money. A Decision Maker has to decide whether a decision is reasonable in the circumstances. I would consider all of the above to be reasonable (but I am not a DWP Decision Maker).

HillStreetBlues

calcotti said:

There are no definite rules.  The rules are not meant to prevent you spending your money. A Decision Maker has to decide whether a decision is reasonable in the circumstances. I would consider all of the above to be reasonable (but I am not a DWP Decision Maker).

I agree with the above, but also not a DM

NPJ said:

I don't pay a lot for cars, and would only spend approx £1,000 on a replacement. 

I do think you  need to research the prices of cars in the current climate.

Alice_Holt

calcotti said:

There are no definite rules.  The rules are not meant to prevent you spending your money. A Decision Maker has to decide whether a decision is reasonable in the circumstances. I would consider all of the above to be reasonable (but I am not a DWP Decision Maker).

     As would I, but if the DWP DM thought otherwise you have a right of appeal against that decision and can ask a tribunal for a ruling.

NedS

NPJ said:

Hello.  We're currently receiving the 'Limited capability for work' element of Universal credit following my triple bypass surgery last April.  We're getting married in May and have paid for a large chunk of wedding expenses, but still have some expenses such as decoration of the reception venue (chair and table coverings etc), wine for the toast, flowers, alterations to bridesmaid dresses and a little still to pay off the balance for our honeymoon.  I'm considering taking one of my pension pots as a lump sum. This will be £9,686 and after tax will take our savings above £6,000 but not over £16,000. 

If I spend any of the money on the wedding expenses listed above, is it possible (or likely), that this would be seen as a deliberate deprivation of capital, bearing in mind that our wedding service was booked last May, and the reception and honeymoon in June ? 

Also, on the 15th September 2022, we booked and paid the deposit for our family caravan holiday in July of this year.  There is an outstanding balance of £578 due to be paid between 26th May and 9th june.  Would paying this also be viewed as a deprivation of capital ? 

Additionally,  I had a near death experience following my surgery last April and was in a coma for five days.  This caused concern that my fiance would have been in real financial difficulties had I not pulled through.  As a result of this, I bought a funeral plan and am paying instalments of £55 a month until 2030.  I could possibly lessen this monthly cost by paying a sum off this.  I've also been putting a regular amount away into a separate account each month to buy a burial plot.  And (if it's possible), I'd like to pre-purchase a headstone.  Would these two expenditures be allowed? 

And finally, I have had my 19 year old car for 6 years and as many things have been going wrong with it lately, I'm thinking that it may be a good idea to replace it before the MOT is due at the end of February.  I don't pay a lot for cars, and would only spend approx £1,000 on a replacement.  Again, would this likely be treated as deprivation of capital ?  Thank you for your time.

If I were a DM considering this case, I would want to know when you booked these events (the wedding and the holiday), specifically if you booked them before you were claiming UC (or reasonably knew you would need to claim benefits), how you intended to pay for them and are the costs reasonable.

Where expensive events are booked before a claim for means-tested benefits were made (or where known to be needed), there can be no indication that there was a deliberate intention to reduce capital for the purposes of claiming (more) means-tested benefits.

If they were booked after claiming means-tested benefits, then the costs must be reasonable. It is perfectly reasonable to want to get married and to save for such an event, so it then comes down to the DM's expectation of what is reasonable to spend on a wedding balanced with the need to support yourselves financially. Weddings can undoubtedly be a very expensive business, but equally you can get married in a registry office for very little, so I would not like to judge what may be considered reasonable.

calcotti

I’ve always found it difficult to see how a deprivation of capital decision can logically be applied, even if a luxury item is purchased, if the money for that purchase is funded by withdrawing money from a pension fund which is otherwise disregarded given that the withdrawal of the funds indicates that there isn’t an intention to spend in order to increase or retain benefit entitlement.

HillStreetBlues

Also  the OP needs to monitor when savings drop below £6000.
If paying for Wedding and honeymoon (and they are classed as allowed) and because of these payments savings drop below £6000, then anyother spending doesn't have to be accounted for.

NedS

calcotti said:

I’ve always found it difficult to see how a deprivation of capital decision can logically be applied, even if a luxury item is purchased, if the money for that purchase is funded by withdrawing money from a pension fund which is otherwise disregarded given that the withdrawal of the funds indicates that there isn’t an intention to spend in order to increase or retain benefit entitlement.

Maybe, but this is DWP you are dealing with, and I suspect they would argue that the two are not related.

So playing devils advocate, once a pension withdrawal has occurred, they may argue the claimant then has the capital and it is now no longer disregarded, and consequently deliberately and unreasonably spending it to obtain more benefits is deprivation of that capital. IOW, it's no longer disregarded the moment it hits your bank account. With regard to legislation, the reason the claimant decided to withdraw it is not relevant, it simply falls to no longer be disregarded the moment it is withdrawn.

I don't see any obvious holes in that argument.

I note life becomes a lot easier on UC whereby repayment of debt is not deprivation of capital, so the claimant can simply run up a debt (maybe on a credit card) purchasing said luxury items and withdraw a lump sum from their pension and use it to repay the debt (as how they incurred the debt is not relevant). Or I could book a £20k round the world trip with TUI, pay the £1k deposit, and then withdraw £19k from my pension to pay the outstanding balance and argue I am paying the debt I own to TUI (not sure if this example would stand up in court)

HillStreetBlues

NedS said:

I note life becomes a lot easier on UC whereby repayment of debt is not deprivation of capital, so the claimant can simply run up a debt (maybe on a credit card) purchasing said luxury items and withdraw a lump sum from their pension and use it to repay the debt (as how they incurred the debt is not relevant). Or I could book a £20k round the world trip with TUI, pay the £1k deposit, and then withdraw £19k from my pension to pay the outstanding balance and argue I am paying the debt I own to TUI (not sure if this example would stand up in court)

I did wonder if it was that easy.
Take out loan, pay everything from loan,
Take out pension pot & pay off loan before end of assessment period. 

kaMelo

That part may be easy, considering the pressure being applied to lenders around  unaffordable lending, getting the loan in the first place may prove more difficult.