## Reply To: Undeclared Capital

No, Su.

You are quite right to calculate the overpayment based on the amount of any HB and CTB they would have lost each week, and any IS / JSA(IB) / PC for that matter.

You are using what I have heard called the Diminishing Capital (Overpayments) rule.

This rule only applies in the following circumstances –

• The overpayment was caused by a misrepresentation or a failure to disclose the correct amount of capital.

• The overpayment was caused by an error concerning the claimant’s capital (or the capital of a member of the claimant’s family) but this must not be an official error or a mistake by a member of local authority staff or a mistake by the DWP / Jobcentre in calculating IS / JSA / PC resulting in wrong HB / CTB calculation or wrong advice given by an official body.

• The period of the overpayment must be 13 weeks or more.

The calculation of overpayment is then calculated as follows –

• Work out how much capital there was at the beginning of the overpayment.

• Work out the overpayment for the first 13 weeks. This is your overpayment for this period.

• Deduct the amount of overpaid benefit from the total capital figure. (N.B. If part of the (actual) capital is spent in this period, the regs. do not make it clear if this should also be deducted, though in the interests of consistency (see above) perhaps this ought to be the case.)

• Calculate the overpayment for the next 13 weeks, taking into account the reduced amount of capital.

• Return to step 3 and keep repeating until capital is reduced below £6,000, or the correct disregard if in residential accommodation, or there are less than 13 weeks left to the end of the overpayment period.

• Add up all the overpayments for each period. This will be the total amount “recoverable”.

Should work this out in just a couple of mins (ahem!!) 😉

Not sure which “new” reg it comes under, poss 103.

Have fun 8)