Capital that can’t be accessed

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    I have not come across one of these so any advice would be most welcome.

    Mr and Mrs M claimed CTB only in 2004. On the application form they declared a number of savings accounts and proof was provided of these. Claim processed and entitlement notified and awarded.

    2006 Mr and Mrs M provide up to date information of their circumstances as they were concious that things may need updating.

    At this time, they declared a Guaranteed Equity Bond which they had taken out on 2006. We have then input the capital from this back to the start of the claim causing a small o/p,

    Mr & Mrs M have asked for a review of this decision on 2 grounds.
    1 – They were assisted to complete the form by a member of staff and were told that as they could not access capital, not to put it down (this is not the training given to any member of staff and so not likely to be 100% accurate)
    2 – That as they could not access the bond for a fixed period, it should be not be included in the assessment.

    I have checked with the Nationwide who issued the bond and it is a fixed term bond where the claimant cannot access the funds. It is not even an account where access is discouraged and there are penalities but they can’t touch it at all!

    Does anyone know if we can disregard this capital until the bond was cashed in November 2006?

    If so, wouldn’t everyone be better off investing capital in such a bond?

    Any advice anyone may be able to give would be most welcome!


    Kevin D

    Lots of different issues…..

    [u:85e9bd2f13][b:85e9bd2f13]1) Capital – actual[/b:85e9bd2f13][/u:85e9bd2f13]

    If the clmt genuinely had no access to the money(ies) in question, then it would have been nil for HB/CTB purposes. So, onto the next issue….

    [u:85e9bd2f13][b:85e9bd2f13]2) Capital – notional[/b:85e9bd2f13][/u:85e9bd2f13]

    The bond can only be notional capital if there was a “significant operative purpose” in putting the money in such a bond in order to obtain, or increase, HB/CTB. It doesn’t have to be the dominant purpose – merely a “significant operative purpose”. So, the question needs to be asked of the clmt – “What were ALL of the reasons for purchasing such a bond?”.

    [quote:85e9bd2f13]If so, wouldn’t everyone be better off investing capital in such a bond? [/quote:85e9bd2f13]
    Not if a significant purpose was to obtain / increase HB/CTB.

    [u:85e9bd2f13][b:85e9bd2f13]3) Form filling[/b:85e9bd2f13][/u:85e9bd2f13]

    This will come down to credibility, simple as that. If the clmt was advised to leave the cap off, it is only a problem if it turns out the bond should have counted – the clmt may be able to argue that there was no failure to disclose, nor was there any misrepresentation. If there is no overpayment, no damage done.

    Hopefully, some other ideas will follow…


    Whilst I broadly agree with Kevin, I have recently dealt with a bond that was treated initially as deprivation. This did take the claimant out of benefit entitlement. After much corrsepondence and two interviews the appeal was withdrawn. This was because I noticed that the claimant could access the bond but there was an “early cash – in” penanlty for one or two years. The claimant was going to take this up with the advisor.

    I would suggest that you ask for the bond certificate and also the notification (if you haven’t already had this). That way you’ll know if they can cash it in early and then it would (IMHO) be actual capital available if applied for.

    Do I know what I'm doing? The jury's out on that........................


    Not sure I agree.

    Whilst I accept that your claimant may well be unable to access the funds linked to the bond I would be suprised if they could not sell it. If so it will have a value equivalent to that which it could be sold for.


    Hey Pete, I was about to say that! As the bond itself is not an account, and there is no access to the capital until the time limit is up, surely the bond itself has some value and could be sold? Perhaps in the manner of Government gilts and stocks? I would be surprised if this was not permitted under the terms of the bond. Calculating a market value? Now that’s a different matter.

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