Hi,

I have two elderly clients. Mr was awarded AA in 2000, clients have not been spending the AA but saving it up. Using it when necessary for bills etc.

Mrs Has applied for CA & has the underlying entitlement.

Claiming CTB throughout & Savings Credit from 2003.

Managed to save up to £18,000 now. The CT office has advised that from 2005 they were no longer entitled to CTB as they were over the capital limit of £16,000 and no GPC payable. Overpayment is being recovered.

My question obviously is .... as Attendance Allowance is disregarded as income can it be counted as capital if it is not spent ?

Thanks

J

Yes.

R(IS) 03/93 (CIS/0654/1991) applies.

Money originally paid as income becomes capital at the end of the period the payment was in respect of.

Once money has become capital, it can only be disregarded under the rules for disregarding capital. Unspent Attendance Allowance isn't so disregarded - only arrears of AA can be disregarded and even then only for 52 weeks.

Just to confirm, where a clmt gets Savings Credit, but not Guaranteed Credit, the LA is required to take into account capital if it increases above £16,000 - so long as an AIP was in force. HBR(SPC) 27(8) applies .

Regards

Sch 5 para 8(1)(a) of the 1992 Regulations provides for a disregard of a payment of arrears of attendance allowance or a concessionary payment to comensate for non payment of such arrears, but only for 52 weeks.

Regular payments of income metamorphose into capital if the money is not spent at the end of the period to which the payment relates. It is clear from Sch 5 para 8 that if disregarded income is not spent, the resulting capital is genrally not disregarded.

I would say that as the Council have gone back to a date in 2005, the burden will be on them to prove that it had grounds to supersede at that time. They also have to apply the diminution of capital rule,(Reg 89 1992 Regs) so an appeal may well be in order, and you could well get a result