Deprivation of capital

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  • #31765
    Anonymous
    Guest

    Looking for advice and see if others support my view

    Customer is 78 has sold her house and given away £180,000 to relatives.

    5 months later she has moved into a housing association property and claimed HB. None of the facts were known until picked up by our Fraud department.

    I think this should be treated as deprivation, however it is hard to prove she did this in order to take advantage of the benefit system. If she had spent money I might think about paying but she has given away a large some of money!

    What do others think?

    #88854
    Anonymous
    Guest

    No idea. You need to establish WHY she gave the money away.

    #88855
    Anonymous
    Guest

    Thanks Mwigg,

    Apparently it was early inheritance money to her children also seemed to think its what everybody did!

    #88856
    Anonymous
    Guest

    OK, but WHY did she give them the inheritance early? This is a lot of money – she needs to be a bit more specific then that…

    Apologies for the curtness of my last post, but we get a lot of queries here along the lines of “Claimant spent £5000 on a holiday – is this deprivation?” The advice given is nearly always the same – it depends on the claimant’s reasons for disposing of the money in this way.

    In your case I would want to ask the following:
    -Why was the house sold in the first place?
    -Where was she living for the 5 months between selling and moving to HA accomodation?
    -How was she paying rent for those 5 months (if applicable)?
    -Exactly when did she give the money away? Right after selling?
    -Did the relatives have some beneficial interest in the property (other than considering it to be their inheritance)?
    -When she gave the money away, did she anticipate being dependent on income-related benefits in the near future?
    -Is she on pension credit?
    -What other income did she have?
    -Did she hold back any of the money, or give every last penny away?
    -How did she intend to pay her living costs (rent etc) without any savings?

    #88857
    peterdelamothe
    Keymaster

    I think you are entitled to an explanation but if little is forthcoming then you are entitled to refuse HB and CTB on the basis of deprivation (so long as she is not passported to full HB etc.).

    I think the amount involved is a relevant factor. Michael has used the figure of £5k (often understandable) but £180k is a fortune to most people. There are a number of UT decisions that has looked in detail at this issue and the onus sems to me to be shifting very much on the claimant to prove their case where such sums are involved.

    As an aside, I wonder if this type of case is really why the welfare state is in such trouble? How did your claimant think she would live in the future if she gave away all her cash? No worries – the State / taxpayer will pick up the tab. Not passing judgement but the “safety net” is now seen as automatic whatever your circumstances.

    #88858
    Anonymous
    Guest

    I agree that the amount of money involved is significant, but so is the length of time between the possible deprivation and the claim. £5,000 may be deprivation if it occurs a week before the claim; but £200,000 may not be deprivation if it occurs six months before.

    It doesn’t sound like the claimant is being deliberately vague in providing an explanation for the expenditure – it seems more likely that she just hasn’t been asked all the relevant questions yet.

    #88859
    peterdelamothe
    Keymaster

    That is also a relevant factor but perhaps less so the older a claimant? “When you gave away your £200K, how did you expect to pay your rent / CTAX? “I expected to get another job in the City” is very diferent from the current situation.

    #41779
    Anonymous
    Guest

    “My loving family said they would take care of me”

    #88860
    peterdelamothe
    Keymaster

    “Oh thats all right then. I am sure they will give you the money back”.

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