Endowment policy and capital

I wonder if anyone could think of a solution to the following problem:

I have a client that was in the process of selling her home and moving into a new home.  The proceeds of the sale would be insufficient to purchase the new home but she had an endowment policy worth £25,000 which was the shortfall in the purchase price.  She surrendered the endowment policy but there was a delay in the completion so she deposited the capital in her bank account.  Completion did take place some 7 weeks later.  Income Support was paid during this period but the DWP now say that she has been overpaid Income support.  I cannot find any provision under which this amount can be disregarded. 

There is also an overpayment of Council Tax Benefit for the same period due to the capital.

Any help would be appreciated.

But did she fail to disclose the 25K when it became available to her?

Tony thanks and yes agreed with your view on that.

Nevip she did not disclose the funds when they became available to her as they were going to be paid straight out but there was a delay in the completion of the purchase of the house. 

I may have to accept defeat on this one.