Client has put in a claim for HB. They have provided proof of savings to LA as follows:
£2k in a cash ISA
£15k in a fixed bond, with no withdrawals allowed until Nov07
£1k in a fixed bond, with no withdrawals allowed until July07

We have been informed by Solicitor dealing with the case at the time that the savings came from Industrial Injuries Compensation paid in Nov03. Claimant was on benefits at the time (not sure of which).

LA has taken all savings into account, hence zero HB awarded.

Should I assume there is no case for appeal? Am I correct that Ind Inj Comp can only be disregarded if put into a Trust, and even then is it only disregarded for 12 months?

If the claimant put the savings into a Trust tomorrow, would this be deprivation of capital or would it then have to be disregarded for HB purposes?

Thanks all

Is there any life insurance associated with the bonds?

"Is there any life insurance associated with the bonds?":

I'm not sure but can probably find out. Would this help the case to disregard?

An investment bond can be disregarded if there is an element of life insurance within it. If it cannot be disregarded then it can only count as capital from the date it can become available upon application. If the LA decided that there has been a deprivation then the burden of proof is on the LA to show that obtaining benefit was a (not the sole) significant operative purpose behind the deprivation. Deprive simply means ‘to no longer possess’.

Thanks nevip. I can't seem to find anything in the regs on disregarding of capital in bonds - can only find reference to disregarding Trusts. Can you point me in the direction of any regs/CDs that might help?
Thanks

See paragraph 16 of the HB Regs. The surrender value of a life insurance policy is disregarded. Read the commentary to paragraph 15 of the IS Regs which cites R(IS) 7/98. The claimant in this case had placed her capital in an investment bond, which guaranteed a minimum death benefit. The commissioner determined that this fell within the definition of “policy of life insurance” and decided that the entire value of the bond fell to be disregarded.

Regards
Paul

Thanks Paul - extremely helpful!
LD

Hello all

Further to my previuous query on disregard of bonds, information received that claimant does NOT have any life assurance association with the bonds. However, the bond with highest deposit (£15k) was set up in Nov 2003 and we have a letter from the bldg society saying no withdrawals are allowed until Nov 2007.

Therefore, should this bond be disregarded for HB purposes? Do you think the letter (and statements) should be enough proof for the LA?

Thanks
LD

Just got it in writing from Bldg Soc that:
"....these two bonds are purely Savings bonds and do not include Life assurance. Withdrawals are not allowed except on the death of the account holder when the proceeds will form part of the estate and can be closed without charge."
To me, this means the claimant cannot access the funds until the bond has matured.

Any thoughts for HB?

ask solicitor for copy of the personal injury trust deed.

there should be one.

if there isn't ... i leave you to fill in the rest of the sentence...

Sorry - think I'm being really dim here.

There is no trust deed as there is no trust. (I think this is probably your point!). Unless you mean that we could go down the line of wrong advice from an official (i.e. good cause)? Otherwise, I presume there is no chance of the disregard.