Have received an appeal from a customer who has been treated as having notional capital in excess of £16k. In 2003, she inherited over £47k from her late father-in-law's estate, while she was in receipt of HB & CTB. She was the sole beneficiary in his will, on the basis of a 'secret-trust' that she would distribute some of the inheritance between his grandchildren and great-grandchildren. She opened an account in her name, but for the children, and invested £25k for them and kept the rest for herself. In November 2005, Audit became aware of several undeclared bank accounts, and eventually found out about the inheritance etc. The claim was cancelled back to 2003, in January 2006, overpayments were raised, and the customer was later found guilty of fraud for not declaring the inheritance. At the time the claim was cancelled, her total capital was approx £17k (This was the amount left in the account she set up for the children, as she had given £8k to her son. Her share had been spent already). Then, in August 2006, she re-appiled for HB & CTB because her capital had decreased to £3k, because she used the money in the children's account to repay her HB & CTB overpayment, solicitors bill's and court costs. She provided her own calculation as to how she had spent all of the inheritance, but provided no receipts. The original DM treated her as still having over £16k, because the HB & CTB o/p's were not pressing. It's this decision she's appealed against.

I'm not sure how to proceed with this. I'm thinking to treat her as still having notional capital of £47k (less an amount for the overpayment's) because she hasn't been able to provide receipts for the item's she purchased. But I'm not sure if this would be fair, given that the inheritance dates back to 2003. Also, should I just be looking at the capital she has disposed of since her last claim for HB & CTB ended (Jan 06) to the time she re-claimed?

Any thoughts please?

Hi,

Just a couple of ideas...


If she was receiving demanding letters regarding the overpayments and paid off these debts you could argue that she did not pay them off to deprive herself of capital. The question is: did she decrease her capital in order to claim benefit? CPAG P 980 -981. 'If you decrease your capital to pay off a debt which you are required by law to pay immediately, you may well not be counted as having deprived yourself of money in order to gain benefit,

Don't forget that you need to also look at the diminishing capital rules as well.

Also is she over 60 as this will make a big difference to the rules. If she is getting the guaranteed credit of Pension Credit capital is ignored (assuming she has given the correct info to pension credit and thus a correct calculation has been done).

i'm concerned that queries on this site from decision-makers prior to making a decision which may result in the claimant seeking representation from a welfare rights adviser has the potential for a conflict of interest. no offence intended.

Particularly where the question may be seen by a Chair of Tribunals! This appears to be a legally as well as factually complex case (of the sort that as a former trusts lawyer I love) and I do have views on it, but do not consider it would be appropriate for me to offer them in this case. Sorry.

Brigid

Thanks for all your help! I thought we all had the best interest of the customers in mind, regardless of our job titles. I'm trying to look for ways to award this customer benefit she may be entitled to, not for the case to end up with a welfare rights officer unnecessarily.

jj, almost every case that is anonymised and posted on rightsnet for discussion has the potential for conflict. As a good welf, all you need to do is look at the area the original poster came from and make your own mind up as to whether the risk is anymore than hypothetical.

There is no greater risk of conflict in an DM posting than when a welf does so. I can think of numerous occasions when posters realise that they are actually invloved in a case and usually the discussion comes to an end. The only minor gripe I have with the original post is that there is maybe a little too much detail so the the claimant might be identyfied and might not be too happy about it! But that is a judgement call for the original poster.

iro the the OP, Brigid is right in saying this is a complex matter. I think that there are a number of factors to make decisions on. NB I'm not quite sure what you mean by "The original DM treated her as still having over £16k, because the HB & CTB o/p's were not pressing" but that aside:

1. Was the £25k genuinly being held in trust? What proof is there of the donors intention? Is there anything in writing? IS this affected by the fact that the claimant went on to use some of the money for her own liabilities?
2. If there was a genuine trust, £25k can be disregarded from the original sum
3. The claimant does not HAVE to provide you with receipts etc as to how the money was spent, you only have to decide on the balance of probablities where the money went. The efluxion of time will make it less probable that the claimant will have receipts or evidence and you should take this into account.
4. If you accept the facts of hte trust and accept where the claimants own money actually went you then have to decide on whether the claimant deprived herself of this capital. Remember it is YOUR burden to show that the disposed of the capital with the INTENTION of
increasing her entitlement to benefit. It is not enough to decide that she has deprived herself of capital on the basis that the disposal did increase her entitelement you must relate the facts to whether she had intention. Remeber that the successful prosection is unlikely to help you decide this point as the criminal side will relate to her non diclosure of hte capital in the first place, not what she did with the money and why. I think you would have a hard time justiyfying a decision that she had deprived herself of the money she used to repay the original overpayment.
5. If you do decide that she deprived her self of any capital then you must state exactly how much and why. I get really cross when DMs simply decide that a claimant has notional capital "over £16k" becuase at some point someone is going to have to go back and do it again! You then need to go back in time and add the deprived amount to the actual capital. You can then start to reduce that amount using the diminishing capital rule over the relavent periods.

I hope this helps and that I am not teaching grandma to suck eggs!

I'm less than convinced that there is necessarily a problem with posting queries on the board that *may* result in a conflict of interest.

There is a particular subject ("exempt accommodation") on which I have contributed on more than one occasion - fairly vociferously too. However, other contributors have also posted on that subject, often on the same threads. Some of the posters, myself included, have dealt with cases on that issue and, anonymously, referred to the cases to make a point. Sometimes, both parties know precisely which cases are at issue because we have all had direct involvement with those exact same cases. In my view, neither party has been prejudiced even though, on occasion, the discussion has been somewhat, er, "robust".

Where there *may* be a conflict of interests on my part, this has been stated in posts on the relevant threads.

For what it's worth, I don't see a problem with this thread. And, at least the person posting has sought advice instead of simply doing what one or two LAs may have done - i.e. making a good fist of an ostrich impression. Surely, the most important requirement is that, ultimately, the correct decision is reached.

With regard to the issue of "notional capital", I broadly agree with S Lloyd's response - certainly in terms of separating the issues (i.e. consideration needs to be given to whether there is/was "actual" capital; or "notional" capital (or both). And, if "notional" capital is being looked at, was there a "significant operative purpose" in the disposal of the capital for the purpose of obtaining, or increasing, HB/CTB?).

Regards

I for one think Helen showed guts in posting this in the first place.

It makes a refreshing change to see an appeals officer actually thinking about what they're doing and also willing to listen to advice and opinions from others, before making their decision.

As for answers to the initial query i could not add anything to what slloyd and kevin have already said.