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setting up a trust and notional income
hopefully get some opinions/experiences.
client is appointee for brother who has savings currently around 14k mark. there is a bit of a convoluted arrangement in place with a care provider where services are paid for in arrears and this has in the past meant that savings have hit the 16k mark and ended entitlement.
client struggling to cope with getting to grips with the benefit system, especially the way the movements in savings impact on income support/hb and one way around this I thought of was to set up a discretionary trust.
My worry though is that the dwp may argue that the “significant operative purpose” has been to allow the claimant to access benefits.
I can see an argument for it being the significant operative purpose but I can also see a strong argument against it given that the current appointee is struggling with the rules around this and it has already lead to overpayments and its really this stress to them and overpayments that that I am trying to avoid.
I haven’t had much practical experience with setting up trusts so I am wondering if others out there maybe have or even just have opinions as to the chances of notional income cropping up as an issue.
“there is a bit of a convoluted arrangement in place with a care provider where services are paid for in arrears”.
Does he get direct payments from the LA to pay for these?
“there is a bit of a convoluted arrangement in place with a care provider where services are paid for in arrears”.
Does he get direct payments from the LA to pay for these?
sorry nevin I have potentially misled here.
there is a convoluted arrangement in place with a service provider but the convoluted part relates more to the budgeting assistance that the care provider supplies. the client is charged for his services the usual way in Scotland where he pays a proportion of the total cost to the local authority.
what the service provider have done is that they would help the client to pay his bills and for other living expenses but rather than take the money from his account they would loan the client the money and then the clients appointee would need to pay this money back.
the problem is that the loan system was over a significant period of time so the amounts building up were not only meaning the client was (on paper anyway) over the capital threshold but also that the repayment amounts now look suspicious to a dwp decision maker looking at notional capital.
This loan arrangement has now been stopped and I am wanting to put a system in place which is far easier for the appointee to manage.