I have a client who is in receipt of HB & CTB they have gone over the £16,000 capital. Local Authority (LA) now have now said they need to pay HB & CTB. In my opinion they have only gone over the £16,000 because all payments go into bank account. LA assessed on 3/1/05 very shortly after income payments had gone into clients bank accounts, just short of £1,000 of income payments went into bank in few weeks before assessment and this took them to £16,245. Male client age 72 pension income £484 Female client age 68 £321.6 DLA and £199 DISSINCAP. Surely this cannot be right, it seems that they are being penalised for having income paid into bank accts if this was order book at the post office this would not occur. Can this be counted twice?

No it can not be counted twice, income only becomes capital if it remains unspent after the period to which it relates has expired see R(IS)3/93 for authority.

At the risk of stating the blindingly obvious, clients need to be constantly reminded of the £16,000 rule, especially now that benefit payments are made into bank accounts. Eg if someone is receiving £1,000 a month in benefit payments then "standing" capital of £15,000 could tip them over the limit. Otherwise, notwithstanding the commissioners decision quoted, the problem will recur. That's why, in benefit terms, I can understand why many claimants immediately withdraw all their benefit when its paid to avoid this sort of hassle! We are not employed to tell clients how to live their lives yet the reality of the benefit system is that building up savings above the lower limits is irrational and counter-productive!