Its the Friday teaser!

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    A claimant is overpaid and provides 800 pages(!) of financial documents. One key point:

    “the appellant says that she made prudent use of credit cards, borrowing money on them free of interest, investing the money so raised, and repaying the debts before the interest free period ended on them. Her net gain was simply the interest accruing on her investment of the borrowed cash”.

    So what is this cash, how do you treat it and what do you think the UT Judge decided?


    :bigsmile: 😐


    It’s all circulating capital isn’t it? I’d only be interested if her borrowings took her capital above a significant level (unlikely)


    AKA Stoozing – nice wee earner if you are careful 😉

    I would treat it as capital in the same way that we do not offset capital against mortgage debt for owner occupiers.

    John Boxall

    I’ve just looked it up on t’internet

    Fascinating, even if it would take me far out of my comfort zone

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield


    Is this CH/2367/2010 by any chance?


    I reckon the Judge couldn’t work it out so made a sweeping decision in favour of the claimant and ignored her capital (which I have a sneaky feeling did exceed £16,000) |(


    Inside knowledge?


    Possibly 😉
    And months of hard work :tired:


    Is this going up on the site, or is it available anywhere else?


    So what’s the answer!!!!


    I am going to get our IT chap to see if he can make it into an uploadable format that I can post onto this thread if I can. Hopefully in the next week.


    I’d say its all capital.

    Following CJSA/3067/2009 money borrowed from Bank A and money saved with Bank A should be offset, where the terms and conditions of the loan allow the debt to be recouped from the savings.

    I imagine some lucky first-tier tribunal is going to have to sort through all those pages of evidence and calculate the net capital, then apply diminution of capital to work out any overpayment.


    Now I’ve read it I see one of the issues was that the LA (apparently) treated as capital income belonging to her son. It is not clear whether they proved that the money in the account did not derive from this source or whether they “misdirected themselves”. I assume that this decision came as a result of an HBMS capital match. My own fraud officers recently fell into a trap of attempting to issue a caution against a customer who, during the IUC, stated that his capital was a personal injuries compensation payment. I sometimes think we are in such a rush to get a good case together we overlook the obvious. I’ve done it myself.

    p.s. It’s also, more fundamentally, to do with the burden of proof. The LA hadn’t discharged it and, in my view, the Judge made the right decision.


    [quote=Chris Dring]My own fraud officers recently fell into a trap of attempting to issue a caution against a customer who, during the IUC, stated that his capital was a personal injuries compensation payment. I sometimes think we are in such a rush to get a good case together we overlook the obvious. I’ve done it myself.[/quote]

    Wouldn’t beat myself up about it. 🙂 We, I think, all still miss the point. A fraud officer is only as good as trained…no HB training then can’t depend[All the time] that they will make a proper decision[Please, this is not to say they don’t do excellent work].

    As KevinD has stated on previous threads, on here and on other forums, and I agree, even some lawyers don’t understand the basics.

    YOU can’t be overpaid or be guilty of an offence, fraud/theft/otherwise, if you are actualy entitled to some or all of the benefit…ergo, no crime, no fraud….etc….
    I’m sure I read of a criminal case, still ongoing I think, that the exact issue was being addressed… not sure of the outcome but the serious crime, fraud squad and CPS seem to have lost big time….

    Hope I didn’t go off tangent on the teaser.

    Kevin D

    The case is CH/2367/2010.

    I agree with Chris Dring to the extent of what the case is about.

    In my view the single most telling extract is at para 60 where the UTJ expressly acknowledged “…there have almost certainly been overpayments of both benefits in this case…”.

    However, the claimant prevailed because the LA couldn’t get a consistent set of figures together: “The local authority has to make decisions which comply the regulations in order to get recovery off the ground. They have not even begun to do this so far, and I see no prospect of their being able to do so on a revised basis if I refer the matter back to them.” At para 27: “I find the local authority’s figures impossible to follow. I cannot conceive that the tribunal understood the calculation; there is nothing in the decision to indicate that they did. A number of the documents put in evidence by the local authority refer to “notional capital”. That has a special meaning in the Housing Benefit Regulations and the Council Tax Benefit Regulations, and is not in issue at all in this case.”

    It’s also worth noting that the Judge did not find that cash generated from credit cards should be disregarded. At para 35: “The appellant took advantage of credit card offers to generate cash at nil interest which she invested to earn interest paying back the money she had borrowed before the interest-free period expired. The cash so generated constituted her capital despite its being a debt to the credit card company.”

    This is one of those cases where the clmt appears to have been somewhat fortunate. Had the LA been able to present a cohesive case that had been properly administered, the outcome may well have been very different.

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