Pension Credit and deprivation of capital

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  • #38783
    cheryl b
    Participant

    Hi All,

    It’s Friday morning and I have brain freeze! We have a couple in receipt of PCSC who bought their previous council house some years ago (allegedly funded by their son). They have now moved to another council bungalow due to health issues and gifted their previous property to their son who lives in South Africa.

    Not sure where we stand regarding Pension Credits. Are we bound by PS figures or can we decide they have deprived themselves of the capital (after making enquiries)?

    Thanks

    #109621
    Kay_Tade
    Participant

    Yes you could but you must be able to show an “intention”, to increase or gain entitlement to HB/CTB, was the main and operative purpose of the “gift”. You have not stated if they were already on HB/CTB. You are only bound by the PS figures if the capital is £16K or less.

    #109623
    John Boxall
    Participant

    The normal procedure where someone funds parents/whetever to buy their Council House is that there is a trust deed. You should first try & find out what the legal arranegements – if any there were any exist around the purchase/transfer.

    PM me if you want to know more

    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

    #109652
    Kevin D
    Participant

    [quote=Kay_Tade]Yes you could but you must be able to show an “intention”, to increase or gain entitlement to HB/CTB, was the main and operative purpose of the “gift”. You have not stated if they were already on HB/CTB. You are only bound by the PS figures if the capital is £16K or less.[/quote]

    Hi Kay. Just to clarify a couple of points. All that is required for deprivations is for disposal to have been with “…a significant operative purpose…”. It doesn’t need to be the main or sole purpose at all. So long as there was “a” “purpose” and it was “significant”, that’s sufficient.

    Also, in savings credit cases, I’m not convinced that a LA is only bound by TPS if TPS states cap exceeds £16,000 from the outset. If TPS is/was aware of all the facts and says a clmt starts with less than £16,000, the LA is bound by that unless or until the clmt’s cap moves above £16,000 (er, or has there been a change I’ve not kept upto date with?).

    #109654
    Kay_Tade
    Participant

    Hi Kevin, I agree about the deprivation bit, I should have clarified a bit more I was focused on the purpose bit.

    AS far as I read HBR 60+ 27(8), as long as an AIP and capital value has been set by the DWP, the cap is under £16K, and it increases above £16K during the AIP then the LA MUST recalculate, or am I the one missing something here?

    #109655
    cheryl b
    Participant

    The customer was in receipt of CTB at the previous address and have applied for HB as well now they have moved. The Pension Service hold capital of less than £7k so what I was wondering is are we bound to use the level of capital held by the Pension Service or can we decide they have deprived themselves and use notional capital? Their actual capital hasn’t changed/increased due to them gifting the property to their son.

    If we are bound by the Pension Service figures there’s no point me making enquiries about deprivation

    #109660
    Kevin D
    Participant

    [quote=Kay_Tade]AS far as I read HBR 60+ 27(8), as long as an AIP and capital value has been set by the DWP, the cap is under £16K, and it increases above £16K during the AIP then the LA MUST recalculate, or am I the one missing something here?[/quote]

    Yes, I agree that is the correct interpretation – I read your original post differently :).

    [quote=cheryl b]The customer was in receipt of CTB at the previous address and have applied for HB as well now they have moved. The Pension Service hold capital of less than £7k so what I was wondering is are we bound to use the level of capital held by the Pension Service or can we decide they have deprived themselves and use notional capital? Their actual capital hasn’t changed/increased due to them gifting the property to their son.

    If we are bound by the Pension Service figures there’s no point me making enquiries about deprivation[/quote]

    ——————(quote box not working properly)

    This could be read either way. If TPS were fully aware of the cap / gift and have taken it into account, it may look odd for the LA to take a differing view. However, that doesn’t necessarily mean the LA is wrong.

    For me, it’s the timetable in HB(PC)R 27(7)&(8 ) which is key.

    1) has the SoS notified the LA that cap has been determined as being £16,000 or less (PCS cases only)?

    2) AFTER that determination, has the clmt’s cap risen above £16,000?

    3) has the cap increase occurred during an AIP?

    Only if answer to all 3 is “yes” can the LA intervene – with one exception. The exception relies on case law and would effectively mean the LA would have to demonstrate that the SoS has wrongly assessed the clmt’s cap in accordance with the Pension Credit legislation (not HB/CTB legislation). That is a relatively high bar to clear and will need clear and focussed arguments in the event of any appeal by the clmt.

    In my opinion, a difference in opinion between staff at TPS and LA staff on whether there was deprivation would not be sufficient to pass that bar, unless the TPS decision manifestly flew in the face of the facts (an even harder bar).

    #109663
    Anonymous
    Guest

    The value of the dwelling occupied as the home was disregarded as capital for both SPC and CTB purposes. When they moved out, the value of that dwelling would have ceased to be disregarded, but if that happened during an AIP it would not affect the Pension Credit award.

    So in principle the threshold conditions for making your own assessment of capital are satisfied: there has been an increase in the amount of capital that is taken into account, as opposed to disregarded, during the AIP. However, as John says, you first need to establish that the claimant was beneficially entitled to the capital – if there was a declared or implied trust in favour of their son, it was not their capital. If there was no such trust, then by giving away the capital they could have deprived themselves of it and so you would be in a position to decide whether you think that is the case.

    #109682
    cheryl b
    Participant

    Thanks for all your help, think I know where I’m going with this now 🙂

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