Joint Capital?

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    We have a claimant who failed to declare joint accounts held with his mother which have in excess of £60,000.00 in them. They have stated that this money is “solely” the mothers and amounts to her life savings and that his name was added to the account to make it easier for him when she died. Looking at the accounts the part about it being “her” money appears to be true, not to sure about the second part. Given that he is the joint account holder is there anyway the balances can be discounted as his capital?


    If you are satisifed that the money held in the account is the mother’s life savings and it is held in the jooint account for the reasons you outline, then its more than arguable that the claimant is not the benefitficial owner of the money at all but merely hold it in trust for the mother.

    HB Regulation 51 provides:

    Capital jointly held
    51. Except where a claimant possesses capital which is disregarded under regulation 49(5) (notional capital) where a claimant and one or more persons are [u:acbfd6021b][b:acbfd6021b]beneficially entitled in possession [/b:acbfd6021b][/u:acbfd6021b] (my emphasis) to any capital asset they shall be treated as if each of them were entitled in possession to the whole beneficial interest therein in an equal share and the foregoing provisions of this Section shall apply for the purposes of calculating the amount of capital which the claimant is treated as possessing as if it were actual capital which the claimant does possess.”

    The question of beneficial ownership has been considered in a number of commissioners cases, but I have not found one on all fours with the case here. The general principle was outlined however at paragraph 10 of CIS/7097/1995 by Mr Commissioner Howell as he then was

    “10. It is worth dwelling for a moment on some of the implications of the meaning suggested. It is common ground (and rightly so) that what basically has to be assessed for income support is the value of the capital resources belonging to the individidual claimant, corresponding broadly with what he is expected to use towards his own maintenance before turning to public assistance; [u:acbfd6021b][b:acbfd6021b]and that what has to be looked at is the
    true beneficial ownership, not the legal title to or control over the assets in which a person may have a beneficial interest[/b:acbfd6021b][/u:acbfd6021b]: cf. R(IS) 5/93. If all beneficial ownership in undivided or pooled assets has perforce to be treated as in equal shares, even where the true ownership is unequal, then the system becomes a lottery; with reg. 52 producing arbitrary answers (on some facts unjustly in favour of claimants, on others against)
    wherever people own unequal shares in a house, or are beneficially interested in any kind of pooled account or investment such as money in a solicitor’s client account or assets held in a unit trust. The argument on administrative convenience is lessened by imagining the adjudication officer having to ascertain on a day by day basis the aggregate amount in a solicitor’s account or the aggregate assets of a unit trust and the numbers of other people interested; and if a claimant with £l0,000 in the bank can halve its value by getting a relative to deposit £10 of his own in the same account temporarily, the injustice and absurdity of the meaning contended for become obvious.”

    The Commissioner also said at paragraph 21

    “21. In the end I have found myself unable to be persuaded that the meaning advanced by the adjudication ofllcer can be correct. In my judgment reg. 52 is to be interpreted literally and applies only where two or more people are beneficially entitled in possession to the same asset in the strict sense that their beneficial ownership of it is joint. In such cases it performs the needed function described in para 18 above so that the beneficial ownership is deemed, contrary to the fact, to be divided between them in equal shares. This has no application where the claimant’s capital asset already consists of his own undivided beneficial share, equal or unequaI, in real or personal property of any kind. There his share is already actual capital that belongs to him individually. The other people involved are beneficially entitled to their own shares, not his.”

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