Deprivation of capital on UC question?

HillStreetBlues

blackstar said:

Thanks for the helpful replies.

Yes there was no formal written agreement with my Mum and myself on how and when to pay back  just to pay it back. 
Got lots of evidence though on the repairs ie the exact amount of money coming from my Mums account into our account and then that exact amount of money going to the eletrical repair company etc. And invoices from the electrical repair company for that exact amount. 

The only thing that worries me is the below

Later decisions — Jones v SoS [2003] EWCA Civ 964 & [2015] AACR 39 — have re-confirmed that each case must be considered on its own merits and no hard or fast rules can be applied to re-payment of debts. So even if a person pays off a debt which is not ‘immediately repayable’ that does not necessarily mean that they have deprived themselves of capital.

R(SB)12/91 establishes the principle that if a person has debts which are ‘immediately repayable’ then the deliberate deprivation rule cannot apply — “A person has to pay his debts. He has no choice in the matter and if he has no choice, then any divesting of capital resources in pursuance of the reduction or discharge of his indebtedness cannot be for the purpose of securing supplementary benefit or any increase thereof.” The Judge stressed, however, that this principle only applied to debts which were capable of enforcement in the courts. It would also not apply to debts which were not immediately repayable, such as the usual mortgage situation where interest and capital repayments were kept up, so if a person paid these prematurely then it would still be necessary to look at whether this was done for the purpose of securing entitlement to benefit.

https://medium.com/adviser/deprivation-of-capital-1d6ee2a67a04

So basically that above means that if you pay off more on a mortgage or more on a debt to family that has no court sanctions and you benefit financially ie via UC then the paying off of a genuine debt can still be considered deprivation of capital.????

That's really worrying if true

That ruling applies to legacy benefits, UC is different, repaying a debt is never DoC under UC.

EDIT https://www.legislation.gov.uk/uksi/2013/376

Notional capital

50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—

(a)reducing or paying a debt owed by the person; or

(b)purchasing goods or services if the expenditure was reasonable in the circumstances of the person's case.

(3) Where a person is treated as possessing capital in accordance with this regulation, then for each subsequent assessment period (or, in a case where the award has terminated, each subsequent month) the amount of capital the person is treated as possessing (“the notional capital”) reduces—

(a)in a case where the notional capital exceeds £16,000, by the amount which the Secretary of State considers would be the amount of an award of universal credit that would be made to the person (assuming they met the conditions in section 4 and 5 of the Act) if it were not for the notional capital; or

(b)in a case where the notional capital exceeds £6,000 but not £16,000 (including where the notional capital has reduced to an amount equal to or less than £16,000 in accordance with sub-paragraph (a)) by the amount of unearned income that the notional capital is treated as yielding under regulation 72.

blackstar

Thanks so much Hilll.

Just also worried me on the 2nd post down on page 1 below

https://forums.moneysavingexpert.com/discussion/6538494/mortgage-overpayment-uc-deprivation-of-capital

HillStreetBlues

blackstar said:

Thanks so much Hilll.

Just also worried me on the 2nd post down on page 1 below

https://forums.moneysavingexpert.com/discussion/6538494/mortgage-overpayment-uc-deprivation-of-capital

Some staff at the DWP are clueless, they give incorrect advice even when it's very basic info they they should have been taught.
If an incorrect ruling is made then appeal it so it goes to a Decision Maker, normally, they correct it, but they can get it wrong as well so  then the need for a Mandatory Reconsideration. Very unlikely it won't be corrected by then.

NedS

blackstar said:

Thanks for the helpful replies.

Yes there was no formal written agreement with my Mum and myself on how and when to pay back  just to pay it back. 
Got lots of evidence though on the repairs ie the exact amount of money coming from my Mums account into our account and then that exact amount of money going to the eletrical repair company etc. And invoices from the electrical repair company for that exact amount. 

The only thing that worries me is the below

Later decisions — Jones v SoS [2003] EWCA Civ 964 & [2015] AACR 39 — have re-confirmed that each case must be considered on its own merits and no hard or fast rules can be applied to re-payment of debts. So even if a person pays off a debt which is not ‘immediately repayable’ that does not necessarily mean that they have deprived themselves of capital.

These links above refer to claimants who were claiming Income Support. The law changed with respect to Universal Credit, as quoted by @HillStreetBlues, whereby:

50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—

(a)reducing or paying a debt owed by the person; or

So for UC there can never be a consideration of deprivation of capital where a debt is being repaid. On legacy benefits such as Income Support the debt had to be due for repayment, i.e you couldn't just pay off your mortgage in full if you won £50k on the lottery or premium bonds and continue to claim means-tested benefits.

Your only consideration is being able to prove a debt to your mother existed should DWP decide it looks like you have given away or moved capital to your mother in order to claim more UC.