Is their any guidance or case law covering the rate at which my client can spend her inheritance (£45K) and avoid the DWP refusing future IS claims on the grounds that she has deliberately spent the money to make a claim.

(Client is on higher rates of both DLA components as is her partner, IB with and IS top up (inc housing costs), CTC, CTB, is an owner occupier with £90K outstanding mortgage and they have two children in mid teens)

Thanks

Thu 15-May-08 06:43 AM by claire hodgson

unless someone can show otherwise, she is surely allowed to pay half her mortgage off! which would also reduce her IS notional amount if her mortgage interest is included....

apart from that, she'll be assumed to use it at the rate she would otherwise have been entitled to IS, i believe.

I would have no problem in advising paying off the mortgage was ok with the proviso that strange/unusual/plain wrong decisions can be made by the DWP.

The significant operative purpose would seem to be to reduce their debt and not to continue (or increase) the claim for Income Support.

If Housing Costs are included in the claim already then presumably IS would reduce and the significant operative purpose results in a claim for less benefit.

From personal experience I've not had problems where claimants have spent capital on houses in the past (notably a CICA payment of £75K) The house purchase was allowed as was other 'reasonable' expenditure.

I hope that helps.......

Good decision for this is CIS/1775/2007. A copy is on Rightsnet.

summary of CIS/1775/2007 from rightsnet briefcase

.... and full decision from the cmmrs website