was wondering if anyone has dealt with any similar cases and had some advice.

Lady is 74 years of age, she is suffering from Alzheimer’s and other medical problems. I have completed the AA and looking into her income initially I wondered at no housing benefit or council tax benefit also State Pension was £99.13 per week with an Occuptaional Pension of £14 so PC as well….. However…..

Son opened a bank account in his mothers name in 1990 and deposited £21K over the years this rose to £25k until he withdrew it at the end of 2006 and used the money as a deposited on his house. All money was paid in, in cash including the starter balance.

Lady is being treated as having notional income, the son went to appeal with housing benefit to prove the money was his and not his mothers at the start of 2007 – he was unsuccessful – no medical evidence supplied and only supplied details of the account when it was closed and where the money went.

Client is still being treated as having notional income of £25k although that would reduced slightly as a year has passed. However there was a 10k HB overpayment that is being recovered from her SP at £46 per week.

Problems now:

If client recives Attendance allowance she would become elegible for pension credit, however as far as I am aware pension credit will also treat the 25K same way as HB.

She needs extended care due to her illnesses – this is being refused due to 25k.

She will eventually in the next year they think need to go into a care home – will they also take this capital into consideration 25k.

I genuinely believe this was a tax avoidance scam on the part of the son and the lady never had this money, rather then a deliberate attempt at deprivation. There was never a charge of fraud leveied at either person.

I have adivsed the son that he will need to seek his own legal advice regarding claiming this money as his own as unfortunatly I cannot deal with his case due to contraints on who I see.

So far only way I can think to prove this is apply for HB again and go through 8 years worth of bank statements from 3 accounts to show where the money came from – long and arduous! Also get social work who are involved to take over finical responsibility. All 3 banks are willing to release statements from the periods in question if my client writes to them.

I was also given advice by a co-worker who suggested I am be able to get the 10k's worth of housing benefit overpayment removed from the capital amount under the diminishing notional captial rules.

Also now it is well out of appeal is there anyway I can approach and ask housing benefit to cease recovery due to age and illness. I now have copies of the ladies care plan and the social worker involved is happy to write of the problems he see's and support he is providing.

I was wondering if anyone had any faster way to prove income was not hers? Or any other way to get the income disregarded.

"However there was a 10k HB overpayment that is being recovered from her SP at £46 per week."

If that is the case, then there is something seriously wrong somewhere. The maximum that an LA HB recovery team can collect is £9.15 per week - unless the customer agrees to pay more - in writing. Whilst I believe that SP is a prescribed benefit, £46 pw is outrageous.

This would entail someone visiting her and getting a signature to allow your LA to take £46 per week from the SP. This raises three questions - when did they obtain that signature, and how aware did they make themselves of the ability of the claimant to understand what they were signing, and what exactly did the LA concerned think the customer was going to live on.

"If that is the case, then there is something seriously wrong somewhere. The maximum that an LA HB recovery team can collect is £9.15 per week - unless the customer agrees to pay more - in writing. Whilst I believe that SP is a prescribed benefit, £46 pw is outrageous.

This would entail someone visiting her and getting a signature to allow your LA to take £46 per week from the SP. This raises three questions - when did they obtain that signature, and how aware did they make themselves of the ability of the claimant to understand what they were signing, and what exactly did the LA concerned think the customer was going to live on. "


Spoke to HB and the DWP debt recovery. LA didnt set rate of recovery that was DWP recovery apprently for state pension it is one third of the money she has coming in and I will need to do a hardship statement to reduce it.

Really want to try to get this money ignored. Will do both applications once the family help provide the proof as this is now turning out harder then getting blood from a stone I might have to work via our social work department.

Unfortunately, I don't have the time to respond to many of the points.

However, if your client becomes entitled to guaranteed Pension Credit (even if notional cap is taken into account), the clmt should become entitled to HB/CTB on the basis of there being a passporting benefit.

The £25,000 won't be a bar to HB/CTB so long as PC contains at least 1p GUARANTEED element.

So, my advice is to submit a PC claim in any case. If the DWP also arrive at a notional cap decision (which leads to nil PC(G)), there is nothing to prevent an appeal being made. If an appeal was successful, no prob.

AND, I'd put in a simultaneous HB/CTB claim advising that a claim for PD(G) had been made - there may be automatic one year backdate due.

Needless to say, you can expect the LA and DWP to communicate (eventually). But, there is nothing to stop the claims being made.

NB: In terms of the notional cap, I'd strongly advise that you obtain as much evidence as humanly possible if the situation is as you believe it to be.

If claimant received attendance allowance then (assuming she lives on her own and no-one receives CA for her) her applicable amount would be about £175 per week.

Even if Pension Service assume notional capital of £25,000, that would only produce tariff income of about £38 per week. Therefore, taking into account her pensions, she should still qualify for Guaranteed Pension credit and full HB/CTB.

Assuming Attendance Allowance claim is successful, I agree with Kevin that she should make a pension credit claim asap, but I can't see how she wouldn't be entitled to PCGC. Might even speed things up if you make them aware in advance of the notional capital issue...

You seem to imply that you would deal with the son's case as well as your client's if you could.

There is the most enormous conflict of interest between them and you shouldn't stouch him with a bargepole! If he needs advice he should get his own.

With regard to the overpayment, you could ask the LA to exercise its discretion not to recover the balance on the basis of your client's vulnerability, health problems and financial hardship.

I would do this as well as asking DWP to reduce deductions.

As the Local Authority would appear to be of the opinion that the £25,000 was the claimant's capital, and not the sons, I'd hazard a guess that they would be reluctant to write off any overpayment on the grounds of hardship - especially considering they have successfully defended their decision at tribunal.

However, you'd lose nothing by giving it a go...

How did the son open the account in his mother's name? There are presumably 3 options:
she opened it at his request - was ther a reason he couldn't get a bank account?
he already had power of attorney for her and used that to open the account in her name - but why? Again, does it meand he didn't ahve a bank account or did he maybe have a fraudulent motive all along?
he forged her consent to the account, in which cse the whole thing was fraudulent ab initio.

Finding out how and why it was done this way might be interesting.

This kind of thing niggles me. Let us start from the position as you outline at face value and assume that there has been no collaboration between the mother and son. If he has merely used his mother to open an account (as possibly be couldn’t have opened one in his own name, for whatever reason) to deposit his own money and there is a clear audit trail then the mother was holding the money on trust and has thus been on the wrong end of a rather harsh decision. Is there any way that the tribunal’s decision be superseded under reg 7(2)(d) of the HB & CTB D&A Regs (ignorance of or mistake as to a material fact)?

I note your comments that the son might have done this for tax avoidance purposes. With regard to motive, there was a case (Milligan v Tinsley HL 1994) where a resulting trust was upheld even though the trust was established to defraud the then DSS. That case was very much distinguished as it dealt with rights in property as opposed to personal rights where there was an existing presumption of resulting trust.

That case then wont help much other that to establish that a motive of fraud by the son would not necessarily of itself defeat the existence of a trust in the circumstances you describe. It is highly arguable that the mother merely held the money on trust for her son and that it was never part of her capital in any real sense. The problem is, of course, providing evidence of the provenance of that money as it goes so far back.

The son originally deposited £21k in a bank account he opened in his Mothers name...

where did the £21k come from...?

few points to answer some great ways of looking at things!



21k came from cash in hand work apprently.....

Have sent the AA off so if she does get it, will then make a claim for PC. However trying to obtain information regarding the paper trail is proving to be difficult. As far as the son is concerned housing benefit have all the accounts and information - I have tried to point out however that I dont.

The bank account was opended with no Id - a fact housing benefit also lingered on - the lady's signature was never on any documents and it was impossible apprently to prove who had opened the bank account.
He did do it without his mothers permission he states though.

I am going to write to the LA regesting a write off however I also doubt they will do this but will look at the ignorance of materiel facts. If we can get HB back on I can also get any further arrears of her rent written off by her housing provider who has said they are willing to do this but not whilst there is capital and no housing benefit!

Thank you for the advice so far.

I cant edit but I was wondering with regards to the income wouldnt 25k put my client outside the saveings limit or 16k? therefor having to prove the income was never her's i nthe first place? sorry slightly confused with that one!

There is no capital limit for guaranteed pension credit and if your client was awarded this then she would be 'passported' to full HB/CTB even if she did have over £16,000 in notional or actual capital.

Hi,

Difficult one without clear facts, particularly regarding the setting up of the account in the first instance, some banks keep records for 6 years while some 12 years.

However had the son orchestrated the setting up of the bank account then you could be consider seeking a set aside, (will need exceptional reasons to support good cause) then you could argue that the money was indeed held in trust.

However can not argue something if you were not aware of it!

There is a trust when a person gives capital to another person to hold and says for whom that capital has to be used, however your client will still be perceived to be the owner of the money, this being due it being placed into an account under her name, however could argue that she was not the beneficial owner of the money. But will need compelling evidence to support a request to set aside tribunals decision particularly at this stage.

It may be in this case preferable to request SoS discretion not to recover, further as there being no capital limit for guaranteed pension credit, it follows that she would be passported to full HB/CTB but the original O/P remains and will continue to be recovered. Could therefore further consider bankruptcy as an option subject to clients financial and housing situation, this will curtail recovery on discharge which I would expect under the current scenario to be around 6 months.

Mitch