Capital exceeds £16000 money to be used to rebuild

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    Jacqui Fowler

    Customer claimed benefit. Husband in hospitaland he is a pensioner. Between them they have about £60,000. So we nilled them. No Pension credit in payment.

    Reconsideration request received. Customer told me the the palce that they lived had a cottage and a barn on the land. They have moved out of the cottage into the barn and they have knocked down the cottage and they are completely rebuilding the cottage themselves.

    The capital that they had is not from insurance it is simply saving that they have accrued over the years. They said they are using their savings to fund the re-builing process. I have looked in Schedule 4 of the ctb regs 2006 and I wondered if par 20 could be used to disregard this money, but it has not been deposited for the sole purpose of purchasing a property which they intend to use as their home, because they already had the capital which they had saved over the years.

    Comments would be appreciated please


    I think this is fairly straight-foward – “nice try but no”. In general terms, accumulated savings are never disregared anyway; its usually lump sums from various one-off sources that are disregarded (e.g. like insurance as you have mentiond). The value of the land that they are building on could be but its not relevant if they have all this cash.

    I always think its useful to consider the means test policy intention in this type of case. The idea of the disregard is surely to help people who find themselves in a particular short-term position of difficulty not to fund their Council Tax payments whilst they decide to spend their capital on other projects, debts etc.

    Kevin D

    Not sure about the ref to “Sch 4” and “par 20”. Do you mean [b:d0b7cb04f8]Sch 5[/b:d0b7cb04f8]? Also, para 20 seems to relate to something else (in either sched)…

    Can you clarify?

    Jacqui Fowler

    Hi Kevin,

    I mean CTB regs 2006 for persons who have attained qualiying age for State Pension Credit Schedule 4 para 20


    The rule Jacqui is talking about is an interesting one. It doesn’t exist in the working-age rules at all – it’s only for pensioners. It disregards as capital any sum paid to the claimant or deposited in their name solely intended for the purpose of buying a new home or essentially repairing an existing one they either occupy or intend to occupy.

    But in this case I don’t think it helps. The rule is clearly thinking of money given to the claimant rather than invested by the claimant themselves. But even if you think it’s possible to construe it as meaning that money the claimant invests themselves in their own name would count (although this would be stretching it a little) they are likely to fall down on “sole purpose” and “essential”.

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