Terms & Conditions

[barryb]

I have a case where we have received a claim for a tenant who has dementia. We have nil qualified it as she has over £16,000 in capital. No one currently has power of attorney for her and so she is going through the Court of Protection process, which I am told could take up to 6 months. We have been advised that because of this her bank accounts have been frozen and she cannot access them at present. The person acting on her behalf has asked us to reconsider our decision on the basis that the capital should be disregarded because the claimant cannot access it. I can understand the logic of this but I can’t find anything to suggest that we can disregard the capital for this reason. Does anyone have an answer for this one?

[nick dearnley]

There is a thread from last year that suggests that frozen capital should be disregarded, but with caution. Importantly, there may be money released for living expenses and I don’t think that would be disregarded, but it might be income rather than capital in that case. I may also depend on what powers the rep has in the meantime – if they can access the account(s) on her behalf it becomes more complicated. If it starts to look as though the rep is deliberately dragging out the process it would raise a question of deprivation, for example.

Frozen capital?

• This reply was modified 4 months, 2 weeks ago by nick dearnley. Reason: To correct double negative

[barryb]

Thanks for that Nick. As well as the savings there is also the matter of her house. Court of Protection was applied for at least eight months ago but apparently has still not concluded. There were safeguarding concerns regarding some members of her family and her money. I am told that she has to go to the bank every week to draw £150. I am guessing that is because it was judged that is what she needed at the time to live on. However, now she has moved into expensive rented accommdation I would assume this amount needs to be revised to take into account her change of circumstances. If it could be arranged for her weekly allowance to be increased it feels wrong to disregard all her capital. While she cannot access all her capital, ultimately she has enough savings to be able to afford her rent and not need Housing Benefit. If for some reason she needed access to all her savings presumably that could be arranged.

[nick dearnley]

That might call into question the access to the account. If she herself has been going to the bank to withdraw cash I think it’s impossible to argue that she has no access – how would the bank stop her taking all the money out, for example. But if that has changed I think you are justified in asking for evidence of what the arrangement now is. Is it ‘we’ve taken her bank card off her for now’ or is it a court ordered arrangement?

[Mike Hughes]

A small number of things to add for the OP:

1 – COP delays remain massive and most figures being bandied about are largely wishful thinking. Take a number and double it.

2 – The principle is that capital is capital which is available to you and which can be disposed of at the value established from a willing seller to a willing buyer. If it’s not available to you i.e. you can’t dispose of it then it’s value is nil/it must be disregarded. The principle is enshrined in case law going far back into the days of Supplementary Benefit and case law such as R(SB)18/83. Several other similar references in the CPAG Welfare Benefits Handbook as I recall and plenty on Rightsnet too.

3 – if the bank accounts are frozen then the capital falls to be disregarded. If the £150 is being drawn from a so-called frozen account on a regular basis then the exact terms of that will be critical. If it’s a regular draw down and the claimant has no ability to draw more or less then they still have no access to whatever the remaining capital is and I’d argue the remainder falls to be ignored.

What they may have though is an income.

[barryb]

Thanks Mike. I haven’t actually been able to find a regulation stating that capital can be disregarded if you temporarily have no access to it. I vaguely remember a case where a claimant had their account temporarily frozen because of fraud as someone else had access to it and was making unauthorised withdrawals. In this case capital didn’t affect HB as it was more of a local welfare query. However, if their capital had been over £6000 could they have reported a change of circs that we shouldn’t be treating them as having over £6000 because they couldn’t access it?

[Mike Hughes]

Whether the access is temporarily frozen isn’t generally a relevant consideration. The consideration is simply whether it’s accessible at the time you’re making your decision.

So, yeah, temporarily frozen is inaccessible and is thus disregarded.

[nick dearnley]

@barryb – it’s the same principle as for capital held in a non-UK bank to which there is no access – I’m thinking of South African accounts (I think) during the apartheid sanctions period, where SA nationals couldn’t take money out of the country. We’d not even think about excluding that as capital as it was clearly not available. So there’s nothing in the Regs about it because there doesn’t need to be. But I’d say that it’s not because it’s disregarded (as that only applies to capital listed in Sch6) as that the practical value is nil (and there is therefore nothing to disregard) because it is inaccessible.

[peterdelamothe]

The UT considered an issue like this involving a divorce. They pointed out that it was beneficial for long delays so that benefits could be paid almost indefinitely. So they put a time limit.

Progress is slow but the COP themselves say an urgent application can be made and sorted within one month. Here you say 8 months. That is the dilemma. I think it is clear that there is no access to capital but I dont think that means for years. I think it is reasonable for you to pay for say 3 months but ask at the same time whether urgent application has or will be made during that time.

If the person dealing with affairs is also the main beneficiary it is easy to understand the conflict here. If benefits are being paid why push too hard. In practice it will merely reduce the amount left in the will. Cynical perhaps but as I have said in other cases, wills bring out the worst in people.

[Mike Hughes]

I mentioned the problems with urgent applications on the thread linked to above.The COP are a mine of misinformation. What they say can be done and what can actually be done are often miles apart. Without going into detail I spend many days sat next to a solicitor dealing with the COP and whilst they would doubtless not wish for me to cite them as an authority on the matter it’s obvious to me what a huge disconnect there is between COP comms and reality.

[barryb]

Thanks for everyone’s input. I don’t know enough about how things work while a COP is being set up. In my case it appears someone has been able to arrange for the claimant to access a set amount of their savings every week. I am guessing that the amount was what they judged would be enough to cover their weekly living costs.

I understand that in this circumstance the capital cannot be “disregarded” as schedule 6 doesn’t apply.

Therefore, they either have savings to the value of £30,000 or they don’t. My thought is that if the claimant needed access to £16,000 of their savings could it be arranged that they got it? If the answer is yes then surely we have to treat them as having too much savings? Mike, do you know more about this? The fact that currently the arrangement is £150 a week, is that a set figure in these circumstances that can’t be changed? Does that mean that say they owed £16,000 in unpaid bills that they were being chased for that nothing could be done until the COP is finalised?

[nick dearnley]

barryb wrote:

My thought is that if the claimant needed access to £16,000 of their savings could it be arranged that they got it? If the answer is yes then surely we have to treat them as having too much savings?

I think if that was the case it would count as capital available on application, i.e. the only reason they don’t have it they haven’t asked, and it would count as notional capital – reg 49(2) if working age but there is no analogous reg for pension age apart from reg 47(1)’s general deprivation rule, and I think it might count as actual rather than notional capital.

[Mike Hughes]

barryb wrote:

Thanks for everyone’s input. I don’t know enough about how things work while a COP is being set up. In my case it appears someone has been able to arrange for the claimant to access a set amount of their savings every week. I am guessing that the amount was what they judged would be enough to cover their weekly living costs.

I understand that in this circumstance the capital cannot be “disregarded” as schedule 6 doesn’t apply.

Therefore, they either have savings to the value of £30,000 or they don’t. My thought is that if the claimant needed access to £16,000 of their savings could it be arranged that they got it? If the answer is yes then surely we have to treat them as having too much savings? Mike, do you know more about this? The fact that currently the arrangement is £150 a week, is that a set figure in these circumstances that can’t be changed? Does that mean that say they owed £16,000 in unpaid bills that they were being chased for that nothing could be done until the COP is finalised?

My point was really that you need more detail on this. There’s a difference between taking £150 and actually being able to take what you want, whether less or more, and taking £150 because you’re explicitly prevented from taking anything else. In the former, it’s all in scope. In the latter I’d say it’s income not capital.

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