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Income Support OP and Bond Treated as Capital
Hi,
Wonder if anyone can tell me if a bond (for a child aged 7) can be taken into account as capital (for income support purposes) if it cannot be touched for three years.
This is for a case from 2006. Client had been receiving IS with child/family premium since 2002. Her ex- partner put £10,000 into a bond for their Son aged 7. It could not be touched for three years. I have read that if a child’s capital over £3,000 you cannot get benefit included for him/her, although the family premium should still be included, but would this include a bond that could not be touched?
In 2006 the DWP stopped all clients’ benefits because of the bond and said she had been OP’d. Client appealed and some time after she received three letters (which she still has) advising her that her appeal will not be referred to a Tribunal, the decision has changed. The Decision Maker decided that she was entitled to IS and reinstated her entitlement.
Out of the blue client recently received a letter from the Debt Management Team advising her she has been OP’d. Letter is relating to the same OP from 2006.
Client appealed, however DWP state she is out of time to appeal as over one year since the decision.
Case is currently with the Tribunal and a direction notice has been given by the Judge for a hearing to be heard as weather or not to accept a late appeal.
Any information would be very much appreciated.
Hi,
Wonder if anyone can tell me if a bond (for a child aged 7) can be taken into account as capital (for income support purposes) if it cannot be touched for three years.
This is for a case from 2006. Client had been receiving IS with child/family premium since 2002. Her ex- partner put £10,000 into a bond for their Son aged 7. It could not be touched for three years. I have read that if a child’s capital over £3,000 you cannot get benefit included for him/her, although the family premium should still be included, but would this include a bond that could not be touched?
In 2006 the DWP stopped all clients’ benefits because of the bond and said she had been OP’d. Client appealed and some time after she received three letters (which she still has) advising her that her appeal will not be referred to a Tribunal, the decision has changed. The Decision Maker decided that she was entitled to IS and reinstated her entitlement.
Out of the blue client recently received a letter from the Debt Management Team advising her she has been OP’d. Letter is relating to the same OP from 2006.
Client appealed, however DWP state she is out of time to appeal as over one year since the decision.
Case is currently with the Tribunal and a direction notice has been given by the Judge for a hearing to be heard as weather or not to accept a late appeal.
Any information would be very much appreciated.[/quot
Actually would it come under fixed term investments? If this is the case would the DWP only be able to take the interest into account as capital? Or am i talking no sense and in need of a holiday!? Also wondering if the fact that the DWP already made a decision in the clients favour in 2006 and did not act any further would have any strength in this case?
Anyone with any feedback…anything…dust…no…dust…anything…no? (As Marjorie Dawes would say!)
Anyone with any feedback…anything…dust…no…dust…anything…no? (As Marjorie Dawes would say!)
Sorry in a really sill mood today! :o/
hi cookie
for me dwp can’t have it both ways -
if they revised 2006 decision, then that decision (that there’d been an overpayment) no longer exists.
that means the recent decision was a new decision, revising the revised 2006 decision, and must have a right of appeal which is not out of time.
i’d be asking them what decision making process has gone on behind all this before getting into substantive question of overpayment. off top of head though, would say that trust couldn’t be considered capital if family unable to access it.
cheers ros
Whether a fixed term investment is disregarded is not always, as a matter of law, straightforward. If it is not immediately obtainable and not disregarded under reg 51 or schedule 10 then it might have immediate value if, for example, the right to it can be sold. However, decision makers usually disregard it and that has been done here.
As Ros says, the clock will start running from a new decision. I suspect, however, that there has been no new proper overpayment decision and that the account has been reactivated as a debt outstanding still recorded on the system following a failure to properly record at Debt Recovery the decision maker’s original revision decision. The Department cannot recover unless that decision is properly superseded according to law and a new overpayment decision is notified to the claimant in the proper manner, containing the proper information.
As has been said, on the face of it this is just a cock up. However, what somewhat alarms me is “Case is currently with the Tribunal and a direction notice has been given by the Judge for a hearing to be heard as weather or not to accept a late appeal.”
On the facts as stated there is no decision which needs to be appealed - in time or out of time. This presumably needs to be pointed out to the Tribunal service as otherwise they can go off half cock.
Sorry this is getting a wee bit confusing now.
Following further investigation it appears that 2 decisions were made on 30th October 2006 and sent to the client.
1. Client is entitled to IS, therefore had not been OP’d the amount they first suggested.
2. Once again this decision repeats that the client was not overpaid IS. However, they have decided that the capital is to be treated as belonging to the son therefore the overpayment is to be recalculated.
The OP was never recalculated and client never heard from them again until now. Client said that she did not appeal the second letter as she was not sure if the second letter was a definite OP and was waiting for it to be recalculated. She was also confused because the other letter dated the same day said she had no been OP’d.
Surely the Tribunal will not look kindly on the DWP for taking so long to re-calculate the OP?
I am not off on annual leave for a week now, but will be working on this case on my return. Thank you for all your input it is very helpful.
Now I’m confused. What was the reason for the DM’s revision? For the overpayment to be recoverable there has to be a failure to disclose or misrepresentation. Just because the Department decide to treat the bond as available capital that doesn’t of itself render any overpayment recoverable. If the Department knew about the bond and decided it was not available capital and therefore no overpayment in the first place, why did it subsequently change it’s mind? Issues of entitlement and recoverability are not necessarily the same.
Now I’m confused. What was the reason for the DM’s revision? For the overpayment to be recoverable there has to be a failure to disclose or misrepresentation. Just because the Department decide to treat the bond as available capital that doesn’t of itself render any overpayment recoverable. If the Department knew about the bond and decided it was not available capital and therefore no overpayment in the first place, why did it subsequently change it’s mind? Issues of entitlement and recoverability are not necessarily the same.
Hi Nevip,
Sorry for the long delay in replying to your message I was off work for longer than intended.
First decision was made in 04/2006, which states;
An overpayment of IS has been made from 01/02/2002 to 12/01/2006, amounting to £7,241.71 because the client failed to disclose the material fact that she has capital in excess of £3.000.
The Social Security Administration Act 1992 71 (1), (2), (3), (5A), (6) and (11). The Social Security (Payments on Account, Overpayments and Recovery) Regulations 1988 Regulations 13 (1) (b) and 14.
Client appealed against the decision stating she had no access to the bond for three years and that it was put in the account from his father.
Client latter received 2 decision letters on the same day, dated 20th October 2006.
1st Decision Letter - I have looked again at the decision we made on the 16th January 2006 that the client is not entitled to IS. I have decided that client is entitled to IS from and including 13th January 2006. On the front of this decision it states ‘It has been decided your appeal should not be sent to the T/S as the decision has changed’.
2nd Decision Letter – I have looked again at the decision we made on 19th April 2006 (not sure which decision this is or if DWP have the dates confused – as client has no record of any decision made on 19th April 2006) that client was overpaid IS of £7,231.71 for the period 01/02/2002 to 05/01/2006 and that this needed to be paid back.
I have decided that the capital is to be treated as belonging to (the Child) therefore the overpayment is to be recalculated.
Client heard no more until receiving letters from the debt recovery team.
1st Letter stating client still owes £7231.71 – letter dated 07/05/2001. Client wrote a letter to them stating she disagreed she then received a 2nd letter stating client owes £3833.59 from 01/02/2002 to 05/01/2006 – letter dated 28/07/2011
As mentioned previously client appealed, which DWP are saying is out of time. She has now received a direction notice from the judge and a hearing is to be listed to decide if a late appeal should be accepted. Both client and DWP have been asked to attend.
Client has only come to us seeking assistance now.
Phew!
Hope that makes more sense. Not sure I can prepare anything for the 1st hearing, I think the judge will grant a late appeal, what do you think? The DWP have obviously stumbled across this OP that they did not deal with back in 2006 and are trying they are trying their luck.
Sorry this is long winded!
It looks like, on the face of it, that she has appealed the original non-entitlement decision and not the original overpayment decision and that’s why the DWP is arguing that the overpayment appeal is out of time. If that is so then you need to see the terms of the entitlement appeal notice in order to see whether it was worded in such a way that it could be construed as an appeal against the overpayment decision also. That is where you need to focus and persuade the judge that it can be so constructed.
It looks like, on the face of it, that she has appealed the original non-entitlement decision and not the original overpayment decision and that’s why the DWP is arguing that the overpayment appeal is out of time. If that is so then you need to see the terms of the entitlement appeal notice in order to see whether it was worded in such a way that it could be construed as an appeal against the overpayment decision also. That is where you need to focus and persuade the judge that it can be so constructed.
Hummm, I believe she did appeal or at least requested a reconsideration because they changed the decision and said that the OP should be recalculated. “I have decided that the capital is to be treated as belonging to (the Child) therefore the overpayment is to be recalculated”.
The client heard nothing after this decision in 2006 and the OP was not recalculate or if it was she was not notified. Therefore, she could not use her legal right to appeal against the new decision.
Am I right in thinking that if the appeal is allowed she would not be successful because she did not inform the DWP of the bond, therefore she failed to disclose? She did not inform the DWP because she had no access to the bond. Do you think she has a case?
If she failed to disclose under the requirements laid down in B V DWP then she has no defence to that. But before that question can be answered it first has to be established whether she had actual capital (including any right to sell it and the value of that) in the first place or merely a future interest in it.
I’ve recently had a look at paperwork for a few so called “financial products” given the title ‘bond’ that wouldn’t have been called a bond when I was studying economics many years ago. Then bonds were described as tradable in contrast to ‘term deposits’ - where you give your money to a financial institution for a set period of time in return for interest but without being able to sell the thing if you needed to. Sometimes with term deposits it is possible to take the money out early but with a (sometimes hefty) financial penalty.
I have seen a bit of paperwork from high street banks about things they call ‘bonds’ which seem to be more like term deposits and are not transferable: ie the right to get the money at maturity is stuck with you and cannot be transferred to someone else. In the case of these I can’t see that they would have any current market value as you cannot sell it or put it up as collateral for a loan. If it was one of the ones where you can take your money out with a cash penalty then it would seem to have a value – reduced to reflect the penalty.
For tradable bonds they will nearly always have some sort of market value although it could be very low when the issuer is considered to be at risk of default.
So I think the 2 questions are you’d need to answer to work out if it has a current market value would be:
1. Can you cash it in early?
2. Can you sell it?
If this isn’t obvious from the paperwork a quick phone call to the issuer should settle it.
Someone with more recent and practical knowledge of these things might be able to provide more info on this.
Nevip and Damian,
Wow - Look’s like I need to do some investigating before taking this case any further. Also, I need to wait to see if the Judge will grant a late appeal.
Thanks for all your input it’s been a great help. Damian, I tried to read up on all the different bonds etc and became very confused?? The answers to the questions you pose are definitely going to be the decider in this case me thinks!
Hi Tony,
I think the decision “16th January 2006 that the client is not entitled to IS. I have decided that client is entitled to IS from and including 13th January 2006” was made because the client’s husband took the Bond back (I don’t know full details, as I have only seen client in a half hour appointment slot)
“I have looked again at the decision we made on the 16th January 2006 that the client is not entitled to IS. I have decided that client is entitled to IS from and including 13th January 2006.
I think the other decision “I have looked again at the decision we made on 19th April 2006 that client was overpaid IS of £7,231.71 for the period 01/02/2002 to 05/01/2006 and that this needed to be paid back. I have decided that the capital is to be treated as belonging to (the Child) therefore the overpayment is to be recalculated” the DWP made a typo and mean the decision dated16th January 2006 (as above), as client is adamant she received no other decisions.
I can’t really obtain any further information about the case until I know the judge is going to grant a late appeal or do you think I should be requesting info for the hearing that decides this?
If a late appeal is granted the DWP will have to prepare an SOS won’t they? Thanks for your input.