Diminution of capital overpayments

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    We have been receiving a lot of HBMS matches about undeclared capital and after a recent appeal we realised that we need to consider the diminution of capital rules on some these cases. Does anyone have any guidance, training notes or a spreadsheet to work out these calculations that they would be willing to share? Also, I would welcome any feedback about whether this has become a time consuming process for other LAs if they have they have been getting more of these cases from HBMS?


    See Deputy Commissioner Humphrey’s decision CH 0314 2007, which I beleive is on this site. It is the clearest explanation of how to calculate diminution of capital I have seen and he helpfully sets out the actual process for this case in a table within the decision.

    I wish all Commissioner Decisions were as concise and clear as this!


    I created an excel worksheet based on the CD 314/07 for HB and CTB, if you would like it, please email as our webmarshal here won’t let me pm folk.

    I based it on the example he gave in his decision



    Can I have a copy too please?


    Ta 😀


    I can’t find a copy of this decision anywhere. Grateful for an emailed copy. Thanks.



    Does anyone else take issue with the Deputy Commissioner’s application of the regulation in determining the value of the recoverable HB?

    Use of Method Two is clearly appropriate, but surely the value calculated at the end of each 13 week period should be used to set the capital sum for assessment in the succeeding period? Thus the £1062.36 overpaid in the 13 weeks to 29.01.06 ought to be recoverable due to the capital exceeding the limit as at 30.10.05.

    Including a reduction in capital at the start of the 13 week period is illogical – in reality the balance would not have reduced until the end. I would contend that the purpose in the regulation referencing the period end point is to set the parameter for the start of the next.

    In addition, ought a further recoverable overpayment have been determined from 30.01.06 based on the relevant tariff income derived from the balance at 29.01.06. And again, from 01.05.06 until 11.6.06 using the balance at 30.04.06. The example referred to in DWP guidance adjusts tariff income throughout, based on the diminished balance from the preceding period – why would the case under consideration require different treatment?

    I would be interest to learn whether spreadsheet calculators in circulation follow 314 exactly, or take what I see as the DWP approach in either or both respects?


    Sorry to bump this up again, but like mw2014 there is confusion in my mind as to Mr Deputy Commissioner Humphrey’s comment at the end of paragraph 13.

    [quote:112ae8353b]These calculations … show that the claimant’s capital fell below the allowable capital threshold by 29th Janury 2006 with the result that the HB overpaid in the final two 13 week periods [i:112ae8353b]is not recoverable[/i:112ae8353b][/quote:112ae8353b]

    How’s that then?


    I would still be grateful if someone would email me a copy as I can’t find it on the net. I don’t mind multiple copies so don’t worry about thinking someone else might have done it. Can take a fax to Tony Bowman on 0118 955 1095. Thanks.


    Tony – I’ve just emailed you a copy of the decision.

    Kevin D



    Thanks mwigg for the email.

    Kevin, how did you find this decision on this site? I tried multiple searches including variations on the case reference and every search turned up blank…



    Kevin D

    Hi Tony,

    Ok, here goes….

    At the top of the page, there is a link for “CASELAW”.

    Once on the CASELAW page, there are three sections headed in red. In the “Social Security Commissioner’s decisions”, there are two boxes; one being a drop down menu (normally defaults to “case reference”). If it is set to “case reference”, place the cursor in the empty white box under the first box. Enter ANY part of the CD reference you want. Then click “search”.

    For example, “314” *should* find ALL CDs with that string within it’s reference. This means it will probably list:


    Hope that helps.


    😀 I must have been having an off day!!

    Nevertheless, for those that also have difficulty finding caselaw using this search facility (and help me feel less small!!! LOL), I would recommend only using part of the reference number as per Kevin’s post.

    For this decision, I tried combinations of the full reference including (CH/314/2007 and CH 314 2007) all of which were blank. (Including the first zero – which isn’t usual – works in the first example.)


    How come he still has over 16,000 for CTB but not for HB??


    Because he was receiving more HB than CTB, therefore each 13-week HB overpayment is greater, and the capital used to calculate subsequent HB overpayments is reduced by more than the capital used to calculate subsequent CTB overpayments! Bascally each overpayment is calculated in isolation and no regard is given to any other benefits the claimant was receiving that he shouldn’t have been. I always thought it made sense to combine the HB and CTB overpayments and reduce capital by the total overpayment, but this decision confirms that common sense should be thrown out of the window when it contradicts what is written!

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