Diminishing capital calculation

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    Darren Tompkins

    Can anyone confirm something for me.

    While looking into a deceased customers claim the DWP have discovered undeclared capital going back to 2000, and have withdrawn IS as a result for several periods. This only affects HB/CTB though for 2002-3 when the customers capital would now be over £16,000.

    I have applied the diminishing capital rule (and I don’t mean dimishing [b:4cbe1cdbd9]notional [/b:4cbe1cdbd9]capital) and worked out the overpayment in 13 week chunks and ‘deducted’ this from actual capital to see if the o/p can be reduced but capital would still be over £16k. Before I inform the next of kin about an overpayment of several thousand pounds does anyone know if I can also include the DWP’s ‘diminishing capital’ due to IS as this would easily take it under £16k. This is one of those case were at £15,999 they qualify for full benefit (and hence no o/p). I’m fairly sure I can’t use IS, but as it’s an all or nothing situation I thought I’d ask.

    Darren Broughton

    HB Reg 103 states that you reduce the capital by the amount of overpaid HB only (see also CTB Reg 88 for equivalent)
    (For pensioners – HB Reg 84, CTB Reg 73)

    Darren Tompkins

    It must be my month for Diminishing capital claims as I have just come across another one where undeclared capital takes them over £16k. In this case applying diminishing capital calc to the o/p should bring them under £16k and therefore would have been entitled to full benefit.

    I can’t input the diminishing capital figures into the claim as it isn’t true capital and only used to reduce the overpayment. I thought I could do it as underlying entitlement but my training department are saying that it isn’t u/e either.

    Is the only solution to do manual adjustments? Anyone any idea on how to input it in general would help but any specifics for IBS would be great.

    Kevin D

    If there is an overpayment, and if the clmt would otherwise have been entitled, I don’t see why diminishing capital can’t be entered onto IBS. At worst, all it needs is a new capital code to identify the capital in question as diminshing.

    Also, IBS has a “tick-box” specifically for underlying entitlement inputs. So, again, I don’t understand what the problem can be.

    NB: Just a note of caution. If there has been a period of nil entitlement, a new claim will be needed for any on-going benefit to be awarded. So, you need to make sure that any period of underlying entitlement is given an end date on IBS….. (Erm, yep, I have overlooked this on more than one occasion….. *sigh*).


    Darren Tompkins

    Thanks for the reply Kevin, but I didn’t think I could input the capital directly as I am only assuming the capital is less for the purposes of reducing the o/p & in real terms the customer does still have over £16k. If I input it on the system it would show as true benefit rather than ‘off-setting’ and would show up on the subsidy claim incorrectly.

    As for u/e, I was advised that this is used to off-set an o/p by inputting the income/cap that the customer actually had for the period of the o/p. In this case, if the customer had told us about the capital at the time it would have been over £16k. Again, I am only assuming it is less than £16k.

    I really wish I didn’t know about this reg!

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