Diminution of capital

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    I am preparing some training and want to check my understanding of a couple of issues.

    We discover a claimant has not declared capital of £10500 and the overpayment covers a 57 week period. The diminution of capital calculation reduces the capital to £9811 by the end of week 52.

    1. For weeks 53 to 57 do we treat the claimant’s capital as £9811 or £10500? The former seems to be common sense but I’m not sure Reg. 103 backs this up. Any views?

    2. Is HB from week 58 calculated on capital of £10500 unless any of it has actually been spent?



    My take on the above situation is that from week 53 to 57 you would use £9811.
    I think reg 103 1a tells you to reduce the amount by the o/p from the previous 13 weeks, so for weeks 53-57 this would be £9811.
    103 2 tells you that you cannot reduce other by the overpayment from the previous 13 weeks, but at week 57 you are not reducing it any further as you have reached the end of the o/p period in less than 13 weeks.

    As the purpose of using this calculating method is just to determine the level of overpayment, so that from week 58, in a “live” benefit claim, you have to use the actual capital then held. 8)

    And as for the chances, as Carol says below – about 13-1 perhaps?

    Carol Meredith

    Having had more than enough of these things pass over my desk of late,I agree totally with Jon. The chances of you getting to the end of your OP period and having an exact 13 weeks left are unlikely.


    I’m resurrecting this thread as I am fine-tuning a diminution of capital spreadsheet, and my interpretation of what to do with the remaining weeks differs from the above.

    I think what is being said in reg 103(2) is that you do not reduce the capital for the remaining weeks, meaning that the overpayment for the remaining weeks is not reduced either. This tends to support the fact that if an overpayment is less than 13 weeks in total no diminution is applied and the overpayment is not reduced, so in practice either at the beginning or the end of an overpayment period, no reduction to capital or the overpayment is applied.

    I’d appreciate your opinions on this.

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