Another Deprivation Of Assets question!

Altior

born_again said:

If that £45K of debt is all due to stoozing. I would be paying it off now. So you know exactly where you are financially, also puts more than 3 months before you might have to claim UC & LCWRA element @ old rate.
Where as waiting till later, you could be opening a can of worms from DWP & DOC

The only value to winding up the stoozing is if I am awarded the additional element of ESA/UC (as I see it).

Say I get awarded the basic level, and my inferred capital was £15K, the UC payment will be practically wiped out due to the level of capital. So whilst it would be a huge PITA to apply for UC from scratch, and go through it all again, the way the system works means that before I receive anything meaningful via UC that's income based, my capital will need to be practically wiped out anyway.

There are some upsides to being on UC itself, but they are not significant enough to offset what I can gain out of stoozing.

If I do need to get below £16K (if awarded the additional element, post WCA), it will be relatively straight forward to drop below £16K capital. It may well be questioned by DWP, but it's quite clear that debt repayment is exempt from DoC. 

Yamor

I think you're straying close to the line of possibly advocating for something illegal, so let's be careful...

In itself, this guidance is straightforward and clear. Deprivation can only occur where the reason for it was to secure entitlement to, or increased entitlement to, benefit. As such, if the claimant did not know that capital affected UC, then there could not be deprivation.

But here is some relevant case law:

https://administrativeappeals.decisions.tribunals.gov.uk/Aspx/view.aspx?id=445

Robbie64

Altior said:

Does anyone know if this has been tested?

Did people know capital affects the amount of universal credit they can get

H1840 Claimants or partners have not deprived themselves of capital for the purpose of getting UC or more UC if they did not know that the capital they have deprived themselves of would affect the amount of UC they could get

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC.

It will have been tested before, way back in the annals of means tested benefits and most likely numerous times since. The above wording, or very similar wording, has existed in every form of means tested benefits back to at least National Assistance, which dates from 1948. Presumably it existed prior to that too. I remember applying the above to a Supplementary Benefit claim in the 1980s and disallowing the claim. Supplementary Benefit was a forerunner of Universal Credit. Even by then it was an old rule. Its origins most likely lie in an old benefit tribunal ruling which therefore would be decades old.

Altior

Yamor said:

I think you're straying close to the line of possibly advocating for something illegal, so let's be careful...

In itself, this guidance is straightforward and clear. Deprivation can only occur where the reason for it was to secure entitlement to, or increased entitlement to, benefit. As such, if the claimant did not know that capital affected UC, then there could not be entitlement.

But here is some relevant case law:

https://administrativeappeals.decisions.tribunals.gov.uk/Aspx/view.aspx?id=445

Ha thanks yes I deleted my post after a brief consideration and before any replies that it might be borderline, but evidently not quick enough!

In my example it relates to pension contributions rather than anything nefarious. Just wargaming it really, as I feel like there's a strong argument that regular pension contributions are legitimate anyway. From new income, not savings. They are encouraged for people already on UC. 

Altior

Robbie64 said:

Altior said:

Does anyone know if this has been tested?

Did people know capital affects the amount of universal credit they can get

H1840 Claimants or partners have not deprived themselves of capital for the purpose of getting UC or more UC if they did not know that the capital they have deprived themselves of would affect the amount of UC they could get

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC.

It will have been tested before, way back in the annals of means tested benefits and most likely numerous times since. The above wording, or very similar wording, has existed in every form of means tested benefits back to at least National Assistance, which dates from 1948. Presumably it existed prior to that too. I remember applying the above to a Supplementary Benefit claim in the 1980s and disallowing the claim. Supplementary Benefit was a forerunner of Universal Credit. Even by then it was an old rule. Its origins most likely lie in an old benefit tribunal ruling which therefore would be decades old.

It does lay out further:

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC. Facts which the DM should consider include

1. previous claims for UC or other means-tested benefits (IS, JSA for example) which may show claimants or partners

1.1 did not get UC/other means-tested benefits, or got a reduced amount, because of the capital they had or

1.2 have been told about the effect of capital on UC/other means-tested benefits

2. official forms and leaflets which claimants or partners have been given when claiming UC/other means-tested benefits1 and

3. the claimant's or partner's educational standing

3 would be the tougher one. I am aware of the limit, but not that pension contributions are unreasonable. And it's arguable that I am aware of the compelling opportunity in this tax year, precisely due to my 'educational standing'.

Altior

The document (H1: Capital) is really quite interesting, eg

Example Roy has 250 Marks and Spencer shares. The highest and lowest share prices for the day before the date of claim is £4.1750 and £4.1250 respectively. Deduct the lowest from the highest price (£4.1750 - £4.1250) = £0.05 Divide £0.05 by 4 = £0.0125 Add £0.0125 to the lowest share price (£0.0125 + £4.1250) = £4.1375 Multiply £4.1375 by the number of share (250) = £1034.3750 Deduct 10% expense of sale = £930.93. 

Apparently, to work out the exact value of stocks and shares, there is a 10% discount for sales expenses. That is one hell of an expensive broker!

Yamor

Altior said:

The document (H1: Capital) is really quite interesting, eg

Example Roy has 250 Marks and Spencer shares. The highest and lowest share prices for the day before the date of claim is £4.1750 and £4.1250 respectively. Deduct the lowest from the highest price (£4.1750 - £4.1250) = £0.05 Divide £0.05 by 4 = £0.0125 Add £0.0125 to the lowest share price (£0.0125 + £4.1250) = £4.1375 Multiply £4.1375 by the number of share (250) = £1034.3750 Deduct 10% expense of sale = £930.93. 

Apparently, to work out the exact value of stocks and shares, there is a 10% discount for sales expenses. That is one hell of an expensive broker!

It's the rule for the valuation of any assets which would have expenses to sell them, regardless of the true cost (whether more or less).

See Reg. 49(1)(a) here: https://www.legislation.gov.uk/uksi/2013/376/regulation/49

NedS

Altior said:

Robbie64 said:

Altior said:

Does anyone know if this has been tested?

Did people know capital affects the amount of universal credit they can get

H1840 Claimants or partners have not deprived themselves of capital for the purpose of getting UC or more UC if they did not know that the capital they have deprived themselves of would affect the amount of UC they could get

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC.

It will have been tested before, way back in the annals of means tested benefits and most likely numerous times since. The above wording, or very similar wording, has existed in every form of means tested benefits back to at least National Assistance, which dates from 1948. Presumably it existed prior to that too. I remember applying the above to a Supplementary Benefit claim in the 1980s and disallowing the claim. Supplementary Benefit was a forerunner of Universal Credit. Even by then it was an old rule. Its origins most likely lie in an old benefit tribunal ruling which therefore would be decades old.

It does lay out further:

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC. Facts which the DM should consider include

1. previous claims for UC or other means-tested benefits (IS, JSA for example) which may show claimants or partners

1.1 did not get UC/other means-tested benefits, or got a reduced amount, because of the capital they had or

1.2 have been told about the effect of capital on UC/other means-tested benefits

2. official forms and leaflets which claimants or partners have been given when claiming UC/other means-tested benefits1 and

3. the claimant's or partner's educational standing

3 would be the tougher one. I am aware of the limit, but not that pension contributions are unreasonable. And it's arguable that I am aware of the compelling opportunity in this tax year, precisely due to my 'educational standing'.

I advised you earlier in this thread that there was case law relating to moving capital into a pension and that it may be treated a DoC.

It's not that making a pension contribution is reasonable or otherwise, it's whether the primary purpose was to move the capital out of reach of means testing for the purpose of claiming more UC.

I recall a case where a claimant was made redundant and received a significant redundancy payment (over £30,000). They paid a large amount from their redundancy payment into a pension thus reducing their capital and allowing them to continue receiving means tested benefits. DWP argued DoC, that the purpose was to continue claiming means tested benefits and that the pension contribution represented a significant increase (change in behaviour) over their previous regular pension contributions.

As I explained to you earlier in the thread, you have no previous history of employee pension contributions as all of your pension contributions were previously made by your employer. Therefore for you to suddenly start making personal contributions constitutes a significant change in behaviour, and the purpose clearly appears to be to reduce your capital to claim more means-tested benefit. I would be extremely surprised if DWP allowed this and did not treat it as DoC.

Once DWP have made their decision, you'd have to go to tribunal and convince a panel of magistrates otherwise to get the decision overturned. I wouldn't fancy my chances arguing that case before a magistrate as you don't have an error in law to argue, only subjective arguments which may not be strong enough to overturn the Secretary of States decision.

As others have repeatedly said, you should first pay off all of your legitimate debts if you wish to claim UC, and see where that leaves you. Anything else is a huge gamble.

Altior

NedS said:

Altior said:

Robbie64 said:

Altior said:

Does anyone know if this has been tested?

Did people know capital affects the amount of universal credit they can get

H1840 Claimants or partners have not deprived themselves of capital for the purpose of getting UC or more UC if they did not know that the capital they have deprived themselves of would affect the amount of UC they could get

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC.

It will have been tested before, way back in the annals of means tested benefits and most likely numerous times since. The above wording, or very similar wording, has existed in every form of means tested benefits back to at least National Assistance, which dates from 1948. Presumably it existed prior to that too. I remember applying the above to a Supplementary Benefit claim in the 1980s and disallowing the claim. Supplementary Benefit was a forerunner of Universal Credit. Even by then it was an old rule. Its origins most likely lie in an old benefit tribunal ruling which therefore would be decades old.

It does lay out further:

H1841 DMs have to show claimants or partners did have such knowledge if they are to decide the purpose was to get UC or more UC. Facts which the DM should consider include

1. previous claims for UC or other means-tested benefits (IS, JSA for example) which may show claimants or partners

1.1 did not get UC/other means-tested benefits, or got a reduced amount, because of the capital they had or

1.2 have been told about the effect of capital on UC/other means-tested benefits

2. official forms and leaflets which claimants or partners have been given when claiming UC/other means-tested benefits1 and

3. the claimant's or partner's educational standing

3 would be the tougher one. I am aware of the limit, but not that pension contributions are unreasonable. And it's arguable that I am aware of the compelling opportunity in this tax year, precisely due to my 'educational standing'.

I advised you earlier in this thread that there was case law relating to moving capital into a pension and that it may be treated a DoC.

It's not that making a pension contribution is reasonable or otherwise, it's whether the primary purpose was to move the capital out of reach of means testing for the purpose of claiming more UC.

I recall a case where a claimant was made redundant and received a significant redundancy payment (over £30,000). They paid a large amount from their redundancy payment into a pension thus reducing their capital and allowing them to continue receiving means tested benefits. DWP argued DoC, that the purpose was to continue claiming means tested benefits and that the pension contribution represented a significant increase (change in behaviour) over their previous regular pension contributions.

As I explained to you earlier in the thread, you have no previous history of employee pension contributions as all of your pension contributions were previously made by your employer. Therefore for you to suddenly start making personal contributions constitutes a significant change in behaviour, and the purpose clearly appears to be to reduce your capital to claim more means-tested benefit. I would be extremely surprised if DWP allowed this and did not treat it as DoC.

Once DWP have made their decision, you'd have to go to tribunal and convince a panel of magistrates otherwise to get the decision overturned. I wouldn't fancy my chances arguing that case before a magistrate as you don't have an error in law to argue, only subjective arguments which may not be strong enough to overturn the Secretary of States decision.

As others have repeatedly said, you should first pay off all of your legitimate debts if you wish to claim UC, and see where that leaves you. Anything else is a huge gamble.

I have loads of relatively recent ad hoc pension contributions, in fact at one point I had 7 SIPPs plus my employer's provider. Partly as the small pots rule could come in useful, but also I like to take advantage of switching bonuses. 

There are varying elements and in that example, the claimant was already aware of the rules as an existing claimant, and it's self evident they shifted the huge lump sum directly into a pension to avoid having their claim closed. I wouldn't be making 4 fig contributions in one go, let alone 5.

I do appreciate the steers, as the benefits board are probably discovering, I am quite autistic and I find it quite difficult to leave a challenge alone! I keep trying but it keeps nagging away at me. I got the news this week that the DWP hasn't made a decision about my ESA 50 yet, I don't know exactly what that means but it doesn't sound too promising that I will get the final outcome any time soon

I see it as much more of a huge gamble to close down stoozing. It's irreversible. If I did that now I would be left with minimal capital, and apparently they could find that I am fit to work (when I'm not). I live alone, have no recourse to help and wouldn't ask for it if I did, a mortgage to pay et al.

If I do eventually do a UC claim (within the rules), I have at least six current accounts, and at this point twenty savings accounts. If I settle my unsecured debt, at least several of those savings accounts would need to be closed. They have different rules, for example the FD regular saver will only pay minimal interest and not 7% if the account is closed. My 3 year ISA can be closed early but would face a 2 month interest penalty. It's a massive undertaking. Hopefully DWP only requires statements for accounts with a positive balance at the time of applying! 

huckster

I don't think anyone with such a complicated set of financial accounts should be looking to claim means tested benefits. So it is good that debts are being paid and many accounts closed.

Anyone claiming UC will be subject to review processes at the beginning of claims and then at any points while the claim is running. So being in a position to clearly evidence money, savings and investments at any time of request is very important.