Capital gifted – deprivation?

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  • #284926
    Alison Jones
    Participant

    Haven’t seen one of these for some time and I have changed my mind several times….
    HB claimed Nov 2020. Moved in from another area. Declared capital in accounts under £16k + SRP/occ pen.
    Stated never claimed before. CL 85 yrs old

    Fast forward 2 years and we are notified 2.11.22 CL received proceeds of sale of former property of £111k on 30.9.22. So this is first we are aware even had another property

    HB is brought to an end 1.10.22 due to holding capital over limit. This decision is made 6.12.22
    After some questioning about the former property we accept this was capital asset that can’t be disregarded and so capital over the limit back to start of claim in Nov 2020. This decision is made 6.2.23

    CL appears to accept both decisions and repays in full. However she also lodges another new claim mid Feb 23 having gifted around £100k to family. Not got full dates on this but seems this began as soon as monies received end of Sept 22. Has stated the intentions within her will (not seen) were for the proceeds of the property to be split amongst family when she died. However, she hadn’t taken account she may move and sell but having done so she split the monies as she intended having the benefit of seeing it ‘enjoyed’. She states it did not occur to her that she wouldn’t be allowed HB. She thought she could do what she wanted with the money.

    I am stumbling around intentions and consequences. Did she declare the property – no – and there are questions around if this could actually have been disregarded for the 2 years she continued to own it. Her son was living there until it went on the market in May 22 – but we have not confirmed if he is over SPA or incapacitated.

    Once the property sold did she gift the proceeds for the purpose of claiming HB – well not really as she was already on HB – but only because we were unaware of the property. Has she gifted the proceeds to retain or reclaim HB – well maybe yes but probably no as she had already started to gift it before we became aware of the property and brought HB to an end. She has reclaimed almost immediately because in her eyes her income and level of capital have not changed from when she first contacted us in Nov 2020.
    It very much feels she sees the property, its sale and gifting as a totally separate entity not related to her claiming HB.

    I could go on but feel I can no longer see the wood for the trees and would appreciate any pointers please

    #284927
    pbirks
    Participant

    Id work backwards – at the point you had the initial claim she didnt declare she had a 2nd property.
    Had sh done so, its unlikely she would have had any HB award.

    She sells the property
    the plans have changed as she intended for the house to be sold once she died and monies to be split between family then. thats what normally happend, will or not – its just the ewill states who gets what rather than everything going to the legal NOK

    but she sold and moved to rented.
    presumably she owned the house outright so didnt have any housing costs apart from uusual running costs.
    So maybe she assumed that as a pensioner with limited incoem she wouldnt have to pay her full rent.

    we corrected that assumption when you revised the original claim and advised her she wasnt entitled because of the capital value of the house.
    So at that point she continues to give away over £100k in 5 months. Appreciate £100k to 4 or 5 family members isnt a massive inheritance for them to receive, but its a huge amount to give away

    How did she expect to pay her rent if she gave away the capital that ended her HB award?
    getting HB doesnt have the be the sole intention – it maybe that she wanted to give the money away and being able to get HB again is a “bonus” side effect – rather than giving it away with the dsole intention of getting HB – but the regs dont say it has to be the sole purpose.
    Id treat is as notional capital /diminishing notional capital – but with £100k its unlikey to give any aentitlement in the short term.

    #284928
    Mike Hughes
    Participant

    So “questions” were asked after which it was determined that the property didn’t fall to be disregarded but those questions failed to notice that the son was living there and establish whether his presence meant it fell to be disregarded. That’s a pretty fundamental omission and puts us instantly in official error territory.

    You then have a situation where disposal starts at a point where she’s already receiving HB so the disposal cannot be to obtain or increase HB. The fact the disposal might not have concluded when the claim ends and/ora new claim is submitted is not relevant as the intent at the outset is pivotal. Given the amount to be divided it’s hard to see how any initial disposals would impact benefit.

    Then we have the matter @pbirks alludes to i.e. that disposal need only be a “significant operative purpose”. She’s already declared that she assumed no impact on HB. You’re the party changing the decision here so the burden falls squarely on you to show that she was, at minimum, aware of the capital limits and the impact on HB and how she specifically would have been made aware of that rather than HB claimants in general.

    I’m struggling to see deprivation or recoverability here.

    One important thing to remember. The whole “how did they think they were going to pay their rent?” is a question I see raised here regularly. I’ve heard it raised at an appeal tribunal but always dismissed. I don’t consider it relevant. The sole question is around intent when disposing of capital. The answer to the question of how they expected to pay their rent takes you round in a circle which only ever comes back to intent.

    In this case the answer is clearly that they believed HB would pay it. The question then posed is whether, to use an old Supp. Ben. and IS case law phrase, the claimant in believing that was possessed of a “mistaken belief, reasonably held”. In order to show that their potentially mistaken (let’s not forget the failure to establish facts about the presence of the son here despite being this far down the line) belief was not reasonably held you come back to… what did they know about the capital rules and was that reasonable in all the circumstances. Showing that you likely sent them a leaflet no longer washes. So, what exactly are these decisions being hung on?

    • This reply was modified 4 months, 1 week ago by Mike Hughes.
    #284937
    Andy Thurman
    Keymaster

    Not a great deal to add but, with the caution on how it is approached set out by Mike, I think there is possibly a case for establishing that the disposal was to get (keep) HB but to do so would require you to challenge the credibility of her statements. Why did she not declare the property originally? Is it credible she believed having over £100k in savings would not affect a means tested benefit? What prompted the notification of the sale of the property?

    The alternative reasons given for disposing of the money will be difficult to disprove but also remember that notional capital is not an “all or nothing” approach…
    How much was left when you became aware/decided the case? If there was still more than £16k at this stage and she continued to get rid of the money at that point, you could possibly determine that this smaller amount was disposed of deliberately. With this lower amount reduced every 13 weeks, entitlement may return quite quickly.

    Whatever you decide on this, however, you do need to consider UE – it appears there should, at least, be no overpayment for the period from May 22 when the claimant started selling the property. Maths suggests the son is unlikely to be of pension age but, as already considered, the possibility he is disabled should also be checked.

    #284943
    peterdelamothe
    Keymaster

    £100,000 is a lot of money and the fact that the property was not declared does not help. Are there any other assets that have not been declared? Technically fraud of course for a working age claimant but I wonder who actually made the claim. Innocent misrepresentation is more likely I would suggest but many readers would disagree and think this is just a typical example of how pension age are treated differently. I agree a bit but of course after 40 years plus in HB I now find myself in that group!

    Welfare Rights Officers often argue there is no such thing as “deprivation” in practice and that the bar is so high etc. Despite this, there is a ton of caselaw on this area. I dont think it is anywhere as straight forward as suggested above.

    What would the claimant do if HB was refused? Ask for some of the money back I guess.

    I doubt most of the LA readers on here would pay this claim in the circumstances. An effective appeals officer could clearly make a strong case from both sides.

    She is 85 and if the true purpose was to avoid inheritance tax (which is a very big issue in the press at the moment) then I doubt there would be tax liability anyway.

    I dont think you mention help with Council tax? I am not sure what an HB Tribunal would decide but I would be almost certain that a valuation Tribunal would say no instantly (but then I am not a fan!).

    #284946
    Mike Hughes
    Participant

    With my WRO hat firmly on 🙂 I can honestly say I’ve never heard anyone argue there’s effectively no such thing as deprivation. That’s patently nonsense.

    However, I do think it is exactly as simple as described above. The reason why people find tribunals make decision they find surprising but few reps. would…

    1 – legally doesn’t matter whether it was £100 or £100,000. The issue is always whether you can show that a claimant knew the capital limits. If they say they didn’t then you’re into “mistaken belief, reasonably held”. Not a hard argument to win given the poor, ambiguous and often plain wrong info. claimants continue to be given re: capital, changes of circumstance etc. from DWP and local authorities. I’ve lost track of the occasions I’ve had appeal papers assert what a leaflet said only to have to walk presenting officers through what plain English means. It starts with the old gem of “you must declare any/all change of circumstance”. Er, no. 100% legally inaccurate.

    2 – if you can’t show she knew the capital limit then you have the answer as to why she didn’t declare in the first place. If you’re also struggling to show that her circumstances were covered by leaflets on changes of circs. etc. then your case is circling the drain.

    I’m afraid I’ve a fondness for this sort of case because decision makers dig themselves deep into circumstances and motivations and chronologies and it still mostly comes down to… can you show she knew the capital limits and had clear unambiguous information on what to declare. I’ve seen that bar beaten but it is a high bar.

    #284948
    peterdelamothe
    Keymaster

    I am sure I have read comments in a UT decision that the amount involved can be critical so I cannot agree with you on that. It is also true in such a case that credibility may be key. Does a Tribunal believe the claimant or not? Some Judges will, some won’t and that is perhaps one why the history of deprivation is so complex. Just anything can be deprivation but the facts of the individual case are critical. Which does not really help a decision maker much. I notice a very recent case on Rightsnet where they are discussing the old caselaw and the “new” deprivation rules in UC. Not much help for here but getting UC and CTS. Which makes my point about help with Council Tax more valid if the dep rules differ from scheme to scheme in this way.

    #284949
    Mike Hughes
    Participant

    I absolutely accept that credibility is relevant. That ultimately comes down to detail of evidence.

    If a claimant says they had no idea about capital limits but you can show that you had detailed correspondence with them at some point on a capital related issue then you’re in a much stronger position than if you’re just asserting that you send the same thing to all claimants and thus will have done so for them. Equally if they say they did declare and spoke to “someone” then that’s likely less credible than the assertion that they spoke to a female on an afternoon in the second week of November 2020 and them having, for example, a clear record of the number they rang. Detail is key to credibility rather and, whilst individual judges doubtless have different perspectives, my experience has always been that credibility comes down to detail and with detail the balance of probabilities will generally be exercised in favour of a claimant. Of course there’s the odd maverick with their “I don’t like the look of you/I think you’re a liar” schtick but those tend to get ripped apart at UT and sent back to FTT.

    If you do find the decision re: the relevance of capital amounts please do post it as I’m in my fourth decade of telling claimants that the amount is not relevant. The relevant thing is “what’s the argument?”. I’ve literally had one hearing where the amount was relevant and that was where the DM decided it was worth pursuing an £86 overpayment and the judge might be politely described as giving the PO something of a hard time.

    They asked for verbal leave to appeal the inevitable and were asked “Which part of ‘no’ did you not understand?” 🙂

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