I have a couple one of whom gets high rate DLAC and DLAM and the other one has just been awarded the high rate of AA. They have recently been notified that they owe in excess of £6000 relating to when their property was repossessed several years ago. The question they have asked is: They have been sent an income and expenditure type form to complete ( I presume to assess their capability of repaying) and they want to know if the disability allowances can be taken into account. I know that they are not for any benefit reasons but I am not sure when it comes to this situation. As a result of the AA being awarded it looks as if they will eventually be awarded the Guarantee element of Pension Credit.

Firstly, they may need specialist debt advice..mortgage shortfall debts can be plagued with all sorts of pitfalls surrounding limitation. DO NOT speak to the lender unless you are sure that limitation is not an issue...in the worst case scenario you can blow a limitation defence out of the water by acknowledging the debt.

As to your question there is not really a hard and fast answer. When completeing financial statements to be sent to creditors I usually try and avoid including AA/DLA and simply put a general statement at the end obout receiving DLA. Another way is to include the DLA as income but then ensure that the additional costs of the disbility are included accuratley in the expenditure statement. Hope this helps!

We would normally complete a financial statement showing the DLA as income, and then showing the same amount as expenditure "related to disability", but there is nothing to say it has to be ignored.

If they challenge it all you can do is argue that DLA is paid for a specific purpose, and explain any extra expenses they may have. (carers, but also taxis, convienience food etc..etc...) though this may make it harder to allow a decent amount for living under the other expenses.

It is fairly common for them to accept that DLA isn't available though.

Victoria J

Hi Margaret

I agree with the replys that you already have, especially the limitation issue.

I personally alsways include the DLA and then offset it as expenditure. The question of including DLA is a personal one and there is no hard and fast rule. It is important however to remember the financial statement has to be a true account of their means and any court documents will have a declaration to this affect.

All the best KIM

Morning Margaret

From my experience working in CAB, details of the DLA/AA were taken but not included in the final financial statement sent to creditors - we never counted DLA as available income when working out debt repayment.

I agreee about the specialist advice as well.

Hope this is of some use

Ali

This is always such a thorny issue. We all know it shouldn't count, but if you miss it out, is it some kind of fraud? But if you put it in and balance it by disability costs you can be put on the back foot by a creditor asking you to describe what they are, to the nearest penny. Which is possible, but not easy, and if you say why should I they just ignore you. Carl shoves Roger, Roger shoves Carl, and tempers start to rise.

I seem to remember that the N9A court form (normal admission and request for time to pay) didn't specify DLA/AA within income streams, but that the Attachment of Earnings request for time to pay form DID include DLA/AA. An AofE is used as enforcement for someone who has breached the terms of an 'oridinary' CCJ.

I always thought that that justified missing out DLA/AA within a financial statement when I was working as a debt adviser ... BUT still put it down anyway because I never had the courage to test it, and also I've not done debt work for five years now thank heavens so this information may well be a nostalgic dream and/or be totally out of date.

And don't forget a double Carer's Addition as well as a double Severe Disbaility Addition in their GPC (presuming they spend more than 35 hours a week caring for each other).

And the mortgage shortfal co would probably be happy as larry with £600 from the arrears of GPC owed in full and final settlement.