The claimant is 64 recipient of IS and DLA (middle care – higher mobility). He jointly owned and lived with his son and daughter-in-law. Due to marital breakdown he had to move out with his wife and disabled daughter. Lives with his family in a rented place. As a result of financial settlement, he informed HB section about receiving capital over 30.000. His solicitor wrote a letter informing HB section that he had (legally enforceable) debts over the sum (30.000+) that was paid to him. Unfortunately, due to his health problems, his wife’s and daughter’s health problem he could not deal with repayment – although he started making some payments to the debtors he did not get rid of the capital straight away. It took him9-10 months to get rid of his capital. The HB section has raised an overpayment because through out the period in question he had capital over £16.000 in his bank account. My argument is that although the sum was there it was not there for his use due to the debts hanging over his head. How can I help him at the appeal hearing? I have referred to page 931 of CPAG handbook but I am not clear how it applies to the above? Any help is gratefully appreciated.

Have a look at CIS/2282/2000 and R(IS) 5/99.

The argument you will have to make is that your client was under a "certain and immediate liability in law". By the look of your postings it may be the "immediate" bit you have some difficulty with.

Jeff

As he is 64 (and I’m presuming the op period is after he turned 60) then the “certain and immediate liability in law" obligation does not apply. The HB PC Regs apply and the test is a lot less strict. However, this only applies for the purposes of notional capital.

From your posting the decision is concerned with actual capital. To ague that actual capital is not part of his resources then you would have to show that it was impressed with some sort of trust. I can’t see how that is possible on the facts as you present them, as it clearly is his money. He owns it. The fact that he has earmarked it for some other purpose does not change its character until that purpose has been carried out. Even if his creditors could enforce their claims in law then it is not their money until a court so adjudges. So unless it is specifically disregarded then I cannot see a way forward. But then , I’ve been blind before.

If the money was lent for a specific purpose and that purpose was not carried out then that would be a different matter but does not appear to be the case here.

The only other 'get-out' I could see is if there was something in the financial settlement agreement (if indeed there was one) which bound him to repay his creditors.

I agree with this analysis - the only debts that can actually be deducted from capital are those which are securd on the property in question , which means in practical terms mortgages.

Commissioner Lloyd-Davis disagrees with you.
See CH/795/2007. That concerned capital offset by an overpayment of Income Support.

Yes, on one hand he had the capital through out the period in question and yet he had debts hanging on his head! Unfortunately he is disabled himself and has each member of his family disabled, he could not deal with the matters and literally sat on it for months. I really appreciated everybody's comments above. The only problem I have is I cannot get copy of CH/795/07 - the decision that might assist my client. Where can I find it?

Try emailing the Commissioners Office. I have found that you normally get the decision within a couple of days