Can anyone tell me if there are any special rules regarding housing benefit assessments when a client has at least £15000 (this was the initial amount put in 4 years ago) in a bond that they cannot get for 2 more years? The other problem is that within this time it is likely that it will increase to more than £16000, thus client will not be eligible for housing benefit. The clients income is a small occupational pension (client is under 60) and thus if housing benefit is not paid the client has no possible way of meeting her rent costs.

Any help would be appreciated.

Thank you

When you say "cannot get", does that mean the money really cannot be accessed, or does it mean there is a penalty for early access?

If it is the latter, I doubt that it can be disregarded - but a clearer response might be possible if you can give details of the nature of the bond.

Regards

I wish I could give a clearer response!

I have told the client that she must find out whether the money really cannot be accessed. If it really cannot be accessed I am hoping it can be discounted. My other concern is that it may be treated as notional capital as benefits may argue she put it in the bond to deprive herself of the capital.



I have advised her it is her duty to tell benefits about all savings etc as at the moment she is likley to be considered as committing fraud.

Is there any life insuarance element with the bond? That's very common. If there is, remember R(IS)7/98

Capital - investment bond - whether to be disregarded as the “surrender value of a policy of life insurance”
In late 1993, the claimant went into a nursing home, and on 1 December 1993 claimed income support through her appointee. On 23 December 1983, she had invested £10,000 in an “investment bond” with a life assurance office. The surrender value of the bond was linked to the performance of an investment fund and could be realised at any time. There was an option to obtain monthly payments by partial surrender which the claimant exercised. A guaranteed minimum death benefit was payable insofar as the bond was not cashed before the claimant died, but this was substantially below the cash value obtainable during the claimant’s lifetime. A tribunal decided that the outstanding cash value of the bond should be taken into account as capital for income support. The claimant appealed.
Held that:
1. the cash value of the bond fell to be disregarded as capital under paragraph 15 of Schedule 10 to the Income Support (General) Regulations 1987, as the “surrender value of a policy of life insurance”. It was sufficient that the bond contained provisions for payment on contingencies dependent on human life, even if those provisions were peripheral to the main purpose of the bond: CIS/122/1991 and Gould v. Curtis <1913> 3 KB 84 applied (paras. 10, 11, 12(1) and (2));
2. where a significant amount is invested in such a bond, so that its value falls to be disregarded as actual capital, this operates as a “deprivation” and an adjudication officer should always consider whether the investment was made for the purpose of securing entitlement to income support then or later. There is no “safe period” for the purposes of regulation 51(1) of the Income Support (General) Regulations 1987 (para. 12(3)).