Only if:
1. It was done at a time when there was no compulsion to do it (this is the case with all debts); and, more importantly
2. It was done with the intention of qualifying for or keeping or getting more benefit. This need not be the main reason as long as it is an"operative purpose" - a factor in the decision to do it.
If a claimant actually knows that his capital is stopping him getting benefit and gets rid of the capital, including by paying a debt he is not under pressure to pay, then that is deprivation (except for state pension credit, where paying your debts isn't). If at the time of the payment the person had no idea he might be going to claim benefit in the near future, or no idea how capital affected benefit rights, it isn't deprivation because the possibility of it helping him to get beenfits never entered his mind.
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