Hello,

Manchester City Council are currently in the process of compensating people who were incorrectly charged for their care whilst in residential care and under S.117 of the Mental Health Act. My understanding was that those compensation payments could not be disregarded as capital for benefit purposes.
However, the Pension Service are treating the S.117 compensation payment received by one Manchester resident as disregarded capital for Pension Credit (Guarantee Credit) purposes.
The regs relating to disregarded capital for Pension Credit and IS are not identical.
Has anyone got an opinion on the Pension Services interpretation of the regs regarding disregarded capital?
Any experience of S.117 compensation payments being either trated as, or disregarded as capital?
My interpretation of Schedule 10. Para.7 of the IS(General Regs) 1987 in relation to disregarded capital is that S.117 compensation payments could not be disregarded for IS purposes. Do people agree/disagree?
What have people's experiences been of how the DWP/ Pension Service treat S.117 compensation payments?
Thanks.

Liverpool City Council refunded their service users last year, I have had the same problem. However I did win a tribunal based on the argument that it was backdated Income Support. I attended another one only yesterday and this time the DWP sent a presenting officer who stated if I won again they would definitely appeal it. The chair therefore adjourned because she couldn't find anyway around it. We adjourned for further evidence.

Thanks for your reply Karen, that's really interesting.
Have you appealed every IS decision where the DWP have treated these compensation payments as capital? Why exactly did the chair adjourn the tribunal - did she agree with you that the payments should be disregarded as arrears of IS, or did she incline to agree with the DWP that it should be treated as capital? What extra evidence are you seeking?
What's your phone number - it would be useful to have a chat with you about this.

Yes I have appealed every decision. The chair officially adjourned for more evidence. The further evidence was the local ombudsmans special report 'Advice and guidance on the funding of aftercare under Section 117 of the mental health act 1983', which I presented at the hearing on the day. She did agreed that the payments should be disregarded, but the DWP said if we won on them grounds they would appeal it. The chair instructed the Presenting Officer to seek further advice and guidance from her legal department on the report.
My number is 0151 427 5438