Please can anyone help?

I'm working with a client who receives IS through ongoing incapacity for work on grounds of depression. During this period the DWP have decided he was not entitled to IS for 4 months approx due to capital in excess of the prescribed limit of £6000 after attending one DWP counter fraud interview. I am not sure if he has any grounds to appeal... Furthermore, the stress of the resulting overpayment is having a detrimental affect on his mental health.

He received payment of £32,250 through his father's will, which was credited to a savings account in his name. He did not declare it to DWP. Needless to say a HMRC check highlighted interest paid suggesting savings in excess of the prescribed limit. He admitted the money was his at the counter fraud interview. However, he had not declared it because before receiving the inheritance he had formed the intention to give the full amount to his mother, who had divorced from his father years earlier and who lives outside of UK. She did not receive anything through the will. He felt she had deserved the money more than him because his father had never paid any kind of maintenance towards his or fellow siblings upbringing. Also she needs the money for health treatment abroad, as she is too unwell to work and on a low income. He transferred £32,000 to his mother (who visited the UK for this purpose) about 4 months later, bringing his capital below £3000 again. He comes across as credible and I believe his statements to be entirely honest.

DWP have accepted he did not deliberately deprive himself of the capital so he continues to be entitled to IS.

Is there any argument that he was not the 'legal and beneficial owner' of the capital, as he always had the intention to give it to his mother?

Could an appeal risk changing the latter decision regarding deprivation of capital?

Any comments or supportive caselaw would be very helpful, as i'm not sure he's got a snowballs...

"Is there any argument that he was not the 'legal and beneficial owner' of the capital, as he always had the intention to give it to his mother?"

None at all that I can see. In order not to have beneficial ownership he would need to be under a legal obligation to dispose of the money in the way that he did. In this case, only a moral obligation exists - and a self-imposed one, at that.

That said, I don't see how any appeal could affect the deprivation issue. If, by good fortune, the appeal were to succeed, then the capital was never actually his and deprivation cannot apply. If he were to lose, he'd be in the same position as now - assuming no fresh facts came to light that cast doubt on his intention in disposing of the capital.