couple, man aged 61 wife 55. their home is being repossessed and they would like to pay off business and personal debts with the equity released. will also need to rent private accommodation and if they pay off their debts it will clear most of the capital that they had received from sale of home.

cpag page 999 states if a person is aged 60 or over they are allowed to pay off debts and not be treated as having deprived themselves of capital. however the debts are mainly in the wifes name and she is under 60.

will this rule still apply in this instance as the debts belong to person under 60 but the claimant is over.

as ever, all replies gratefully etc ...
thanx,
pete ...

Very interesting situation. There is a very recent CD where it was found that "purpose" can indeed be attributed to the partner of a clmt.

See what you think of CIS/1757/2006:

www.osscsc.gov.uk/aspx/view.aspx?id=2099

However, the regs that will apply will be the 60+ regs as one of the couple is aged is of that age bracket.

Regards

This could be very interesting. Reg 21of the PC Regs state that there will be no deprivation where “a person” disposes of a resource “ for the purpose of reducing or paying a debt owed by the claimant…”

Does this mean that the debt cannot be the debt of a partner. The decision Kevin has cited states that a deprivation by a person who later became the partner of a claimant can be a deprivation of the claimant. This is because under the regs the income and capital of the partner must be aggregated with that of the claimant. Thus that case is distinguished. In the case here, to succeed it would have to be shown that the debt of the partner could also be treated as the debt of the claimant or that the word “claimant” could also be read as “claimant or partner.” An interesting point to argue.

If the debts are in the wife's sole name then legally they are only hers. The creditors could not proceed against the claimant or his assets in relation to them. So it's difficult to see how they could also be treated as the claimant's debts. He might be able to raise an argument on the basis that he also had benefited from the money that had been borrowed, but it seems pretty thin ice to me.

Surely, the capital from the sale of the property does not belong only to the claimant it will be jointly owned by both of them. If they both decide the best course of action is to clear debts I ‘m at a loss why it should only affect him.

Carrie:

For HB/CTB, any capital held by a partner is deemed to be that of the clmt. So even if the proceeds from an asset are "joint" the whole of the money is taken into account for HB/CTB. Further, the CD quoted above confirms that the rules of "deprivation" can be applied to EITHER the clmt, or partner.

As to whether there is any deprivation in this case depends on the old test - i.e. in disposing the capital, was there any "significant operative purpose" for obtaining, or increasing, HB/CTB? Nevip's point may well be important.