Reply To: Capital A Moot Point

John Boxall

From my perspective there is not a chance of a credit balance counting as capital in the normal run of things. Capital is not defined other than by what it is not but the accepted definition involves a payment. A person with a credit balance has not had a payment and so that is the end of that. It’s also not a one off. It shows up as a monthly or quarterly balance but in practice is calculated daily. At no point has it been paid to a claimant until such time as they apply for it.

Now of course, there are a couple of further scenarios.

1 – there is a somewhat tenuous prospect that a person could be treated as having notional capital which they have failed to avail themselves of. Given the fluctuating nature of fuel bills at present and their sheer unpredictability I find the prospect of a claimant ever being taken down that route to be largely laughable. The counter argument being that it was entirely reasonable to not apply for the credit balance as a payment given that the best use of that money would almost certainly be for it to stay where it is.

2 – well yeah I guess there is a theoretical scenario in which a claimant decides to overpay their bill by a huge amount. People will find amounts to be determinative here but of course they’re not really and the main issue will be around intent. If a person is on a fixed benefit income and wins £10,000 from the lottery which they decide to credit to their fuel bill balance it’s going to be damn hard to show that it’s capital (because it’s a credit balance) and equally hard to show there’s a notional capital issue. Fuel won’t be getting any cheaper any time soon in any meaningful way for benefit claimants on fixed incomes so why would you not do that?

Where you end up is back with the age old chestnut of having to prove that the claimant was aware of the capital limits and the disposal had a gain of benefit as a significant operative purpose. As previously discussed that really isn’t as simple as “we sent them a leaflet and here it is”.


Thank you that looks like the definitive explanation

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

Wilkins Micawber, Ch12 David Copperfield