Universal credit

groupy45

Hello. I have started taking UC in December 2019 and in July 2020 I took out a loan of 23,000 to buy a flat for my parents who live abroad. The loan was paid in my account on the 9th July 2020 and I have transferred the money to my mum’s account on 31st July 2020 ( within the same month). I wasn’t aware that I needed to inform HMRC about the loan so two years later I got a letter from them saying that I owe them @ £8000 because I have been overpaid and I wasn’t actually entitled to UC in all this time. 

The money haven’t stayed in my account and I haven’t been spending the capital. 

The reason why I bought this property for my parents is because my mum retired early due to being diagnosed with cancer and she was getting a very low pension. They needed a property to live in and I have helped them out. All the paperwork for the flat is in my mums name. My question is if I can appeal the DWP decision as I haven’t actually seen the money. Can the property can be disregarded as it has been occupied a close relative who has/had limited capability for work / reached pension age?
May I mention that I was working full time when the loan was taken and I am still working full time now ( no gaps). 

Any advice would be appreciated. 

Thank you,

Groupy45

Newcad

What are the dates of your UC monthly Assessment Period?

What counts for UC is the amount of capital that you have at the end of each UC AP.

If your AP end is between the 9th and the 29th of the month then you would have had over £16k in your account at that AP end and so would have had no entitlement for UC.
Accordingly your UC should have been stopped.

Then once the capital had gone from your account again you would have been able to reclaim UC - provided that the DWP agreed that the capital had been disposed of 'reasonably'.
(Yes we know, but it isn't us that you have to convince that it was reasonable).

You do however have some hope here of getting the amount of overpayment due reduced, because it was a couple of years ago and because you would (probably) have been able to reclaim UC once the capital had gone.

You need to get the help of a benefit advisor to request for you that the matter be treated by the DWP as a 'Closed Period Supersession'.
You do need the help of an advisor to make that request, it is not something that the DWP would expect a claimant to request, (they would not expect a non-advisor to even to know about it).

If with the help of the advisor you can manage to persuade the DWP to treat it in that way then it will become just an overpayment of UC for the 2-AP's time that you did have the money in your account, rather than for the whole time since it happened until now.
Always provided that the DWP agree that it was reasonable to give the money away once you had it. 

You can find advisors local to you who should be able to help by putting your postcode in here:
https://advicelocal.uk/find-an-adviser

peteuk

Are they questioning the fact that youve given the money away?  They may look at this as you having the £23K until a point where it would have become £16K.  Had you brought a car then it wouldnt be such an issue but you gave it away.  Had you brought the property in your name it would equally have the potential of affecting your UC claim

For anyone else, if your thinking of doing something similar, then think about all the effects it may have.

Czure

Firstly let me say how sorry I am to hear of your mothers illness & I hope she is doing well.

You usually need to appeal within 1 month of the decision by DWP but sometimes it can be accepted if within 13 months. Once past those times then only in certain exceptional circumstances will you be allowed longer to appeal.
I don't believe the property being disregarded comes into it as such as it will be decided on the actual loan amount, who benefited from it in any way, & also if it would've affected their eligibility to any form of benefit had they taken the loan out themselves (although the fact it was transferred into your mothers account suggests against that). It doesn't really matter what the other party used the money for but part of your evidence would require your mother producing any documents regarding the use of the money to make a purchase (in this case a flat).

However, you say you received the letter 2 years after July 2020 (in 2022) so now over 2 years have since passed from that decision but you don't say why you've not queried this sooner?
This means that unless you've put the wrong year down for receipt of the letter you can almost certainly now only use the the exceptional circumstances reason to appeal by showing that you've been somehow incapable of appealing between the time the decision was made & now, & you must be able to provide evidence of this to DWP otherwise sadly I'd think you unfortunately don't have a leg to stand on.

If you can show good reason for such a long delay in appealing then the options open to you would normally be to firstly challenge the decision by asking DWP for a 'mandatory reconsideration' & if that fails (which most seem to) you'd then ask for a 'full appeal'. If that appeal also fails to find in your favour there's a 3rd & final step of appeal to take.
Check the advice on this government website for some info- www.gov.uk/challenge-appeal-benefit-decision
(sorry I can't add a link due to being too new to the forum, so simply type the address into a browser to find the site)

You'll need to be able to provide all of your bank & financial statements for not only the time of the loan but also from that date to present along with your mothers statements showing the movement of the money into her account & the payment for the property, along with any other paperwork concerning the flat purchase including a copy of the deeds, these should be provided in the first instance of any request for reconsideration or appeal to avoid delays & help your appeal. The reason DWP would need to see all of these years statements is that given the length of time passed they'll need to ensure you didn't receive the money back or profit from it in any amount or way that would take you over the claim threshold.
An amount each month to cover each monthly repayment on the loan or any other amount that didn't take you above the threshold is no issue, but you're looking at least at 4.5 years worth of bank statements being needed.

If you are able to show good reason for such a long delay in appealing it's possible that due to the length of time passed DWP will bypass the 'mandatory reconsideration' stage in which case it would go straight to appeal which is the better option as it's done by an independent tribunal instead of by DWP themselves & has a better success rate, but you won't know if this is the case until you've spoken to DWP.

Whether or not you feel you have good cause for such a late appeal you should definitely seek advice from a professional organisation such as Citizens Advice etc & if they feel you were wrongly penalised then depending on your current circumstances you may even be entitled to free legal aid.

Sadly but quite understandably if no prior agreement is/or was confirmed with DWP (in writing in case proof is ever needed) allowing someone to do as you have then DWP will always see such movements of money as an attempt to hide finances in order to claim or continue claiming benefits. Unfortunately you won't be the only person to have fallen foul of this due to not realising the need to firstly obtain consent prior to helping out someone & I hope you can get this resolved. Personally I strongly feel that DWP should prioritise making such things very clear to all claimants at the start of any claim in order to hopefully avoid such issues for people but sadly they don't.

Newcad

groupy45 said:

... I bought this property for my parents ...

 All the paperwork for the flat is in my mums name.

PeteUK does bring up a good point - who is the actual owner of this property?
If it's your mother/parents, and you have no claim on it or how they could dispose of it, then well and good.
But if it is your property then that's different and forget what I said about a Closed Period, because it isn't closed if it's your property.

HillStreetBlues

Newcad said:

groupy45 said:

... I bought this property for my parents ...

 All the paperwork for the flat is in my mums name.

PeteUK does bring up a good point - who is the actual owner of this property?
If it's your mother/parents, and you have no claim on it or how they could dispose of it, then well and good.
But if it is your property then that's different and forget what I said about a Closed Period, because it isn't closed if it's your property.

I don't agree.
The OP had £23,000 once the loan hit their bank account. That £23,000 was given away as a gift ( I think that's the point peteuk was making). That means that money can be classed as deprivation of capital.

peteuk

HillStreetBlues said:

Newcad said:

groupy45 said:

... I bought this property for my parents ...

 All the paperwork for the flat is in my mums name.

PeteUK does bring up a good point - who is the actual owner of this property?
If it's your mother/parents, and you have no claim on it or how they could dispose of it, then well and good.
But if it is your property then that's different and forget what I said about a Closed Period, because it isn't closed if it's your property.

I don't agree.
The OP had £23,000 once the loan hit their bank account. That £23,000 was given away as a gift ( I think that's the point peteuk was making). That means that money can be classed as deprivation of capital.

The question is two fold 
Firstly if the house is in the mothers name, then the OP receiving £23K and giving it to his mother, will be questioned as DoC and the Op treated like he still has the £23K.

Secondly if the flat was in his name, with no mortgage as such, then the flats capital in theory is more than £16K and so there is no entitlement until the capital is less than £16k which it won’t be unless the flats value decreases.  (Or there is a mortage as £23k is cheap for a flat) 

huckster

@groupy45 needs to provide clearer information in response to the various posts made by others.  

Appears too late to appeal unless good reason.

Unless you have had more recent decision letters regarding overpayment amount and collection.

Newcad

HillStreetBlues said:

Newcad said:

groupy45 said:

... I bought this property for my parents ...

 All the paperwork for the flat is in my mums name.

PeteUK does bring up a good point - who is the actual owner of this property?
If it's your mother/parents, and you have no claim on it or how they could dispose of it, then well and good.
But if it is your property then that's different and forget what I said about a Closed Period, because it isn't closed if it's your property.

I don't agree.
The OP had £23,000 once the loan hit their bank account. That £23,000 was given away as a gift ( I think that's the point peteuk was making). That means that money can be classed as deprivation of capital.

You have missed the point, who actually owns the property is very important here.
If the OP still owns the property then deprication cannot be an issue at all - because he still has the capital just in a different form.
ie. It becomes a straightforward matter of too much capital to be entitled to means teated benefits.
However if the money was gifted free and clear and the mother owns the property then deprivation may be an issue. (or may not).
Remember that for something to be classed as deprivation then it has to be done with the intention to increase or to avoid decreasing or losing benefits.
That was obviously not the intention here at all.

The OP's benefits did not increase, nor would they have reduced because he wouldn't have  borrowed the money other than to give to his parents. Which he did within a month.

Note though there is another possible twist in this scenario.
If there is anything at all to indicate that this was not a free and clear gift, and that the parents can sell the propery if they like and keep the proceeds, ie. if the OP has some agreement/clause that the property is returned to him if his parents move out or pass on.
Then it would still be classed as an either an asset or a notional asset of the OP, and thus capital or notional capital.

HillStreetBlues

Newcad said:

HillStreetBlues said:

Newcad said:

groupy45 said:

... I bought this property for my parents ...

 All the paperwork for the flat is in my mums name.

PeteUK does bring up a good point - who is the actual owner of this property?
If it's your mother/parents, and you have no claim on it or how they could dispose of it, then well and good.
But if it is your property then that's different and forget what I said about a Closed Period, because it isn't closed if it's your property.

I don't agree.
The OP had £23,000 once the loan hit their bank account. That £23,000 was given away as a gift ( I think that's the point peteuk was making). That means that money can be classed as deprivation of capital.

You have missed the point, who actually owns the property is very important here.
If the OP still owns the property then deprication cannot be an issue at all - because he still has the capital just in a different form.
ie. It becomes a straightforward matter of too much capital to be entitled to means teated benefits.
However if the money was gifted free and clear and the mother owns the property then deprivation may be an issue. (or may not).
Remember that for something to be classed as deprivation then it has to be done with the intention to increase or to avoid decreasing or losing benefits.
That was obviously not the intention here at all.

The OP's benefits did not increase, nor would they have reduced because he wouldn't have  borrowed the money other than to give to his parents. Which he did within a month.

Note though there is another possible twist in this scenario.
If there is anything at all to indicate that this was not a free and clear gift, and that the parents can sell the propery if they like and keep the proceeds.
ie. if the OP has some agreement/clause that the property is returned to him if his parents move out or pass on.
Then it would still be classed as an either an asset or a notional asset, and thus capital or notional capital.

It's not me who has missed the point, it's your misunderstanding on how forums work
On forums  people embolden or highlight  the text they are talking about, I only emboldened the text on where you talk about " if it's your mothers/ parents"
I left the text  " But if it yours " as is, and wasn't part of my reply.
Hopefully this explantation helps you for future when you see emboldened or highlighted text.

HillStreetBlues

huckster said:

@groupy45 needs to provide clearer information in response to the various posts made by others.  

Appears too late to appeal unless good reason.

Unless you have had more recent decision letters regarding overpayment amount and collection.

I expect the OP though they were being clear with "All the paperwork for the flat is in my mums name" and the terminology  " bought this property for my parents" rather than I bought this property for my parents to live in.