Treatment of unexplained deposits.

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  • #40006
    richardhealey
    Participant

    We have a claim that has been investigated. During the investigation bank statements were obtained that show a substantial number of unexplained cash deposits over a period of years.

    The claimant was asked to explain the deposits but declined to do so. A decision was then made to treat the amounts as ‘other income’. The total amount of deposits was divided over the number of weeks during which the transactions took place to get a weekly income figure.

    This income was then used to re-calculate the claim and an overpayment was created. The claimant still had an entitlement to some benefit.

    The claimant has now requested a hearing at a Tribunal on the grounds that they dispute the figure used.

    I’m preparing the submission but I’m having trouble finding anything in the regs that says the authority is correct to assume unexplained cash deposits can be treated as income. Should the decision have been that the claimant has not provided sufficient evidence of their income and the claim should really have been cancelled?

    Also does anyone think it’s worth asking the Tribunal to issue a direction to the claimant to explain what the deposits are?

    Thanks for any help you can offer.

    #114186
    John Boxall
    Participant

    Reg 86(1)

    (1) Subject to paragraphs (1A) and (2) and to paragraph 5 of Schedule A1 (treatment of claims for housing benefit by refugees), a person who makes a claim, or a person to whom housing benefit has been awarded, shall furnish such certificates, documents, information and evidence in connection with the claim or the award, or any question arising out of the claim or the award, as may reasonably be required by the relevant authority in order to determine that person´s entitlement to, or continuing entitlement to, housing benefit ………….

    It would seem to me that you may have a case to simply end his entitlement in the light of his refusal to provide any explanation of where the money came from.

    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

    #114189
    Kevin D
    Participant

    There isn’t a reg that explicity says “unexplained deposits shall be treated as income”. In effect, you are drawing an inference that the clmt has “X income, nature unknown” from “Y date” based on the evidence available. There is plenty of case law supporting the approach of drawing inference – so long as they are reasonable.

    The deposits could have been capital or income. You have decided to take the income route. Now it’s upto the Tribunal to look at the case.

    One note of caution. It’s unlikely, but be aware it is at least possible the payments fall within para 4 of HBR 86. In such cases, clmts are under no obligation to provide info.

    #114198
    richardhealey
    Participant

    Thank you both for your comments. I will go with the original decision that the deposits are income and that this will have resulted in an overpayment for the periods concerned. I will need to re-caclulate the income over separate 52 week periods though (currently worked out over approx 250 weeks).

    Had I been the one to make the original decision I think for the sake of clarity I would have gone with ending the entitlement.

    #114199
    Anonymous
    Guest

    You could have done that as well, but ending entitlement under the Decisions and Appeals regs would not have taken retrospective effect. To achieve an overpayment you needed to make the inference that the payments were income.

    Personally I would give the claimant another chance to explain the payments before preparing a submission, since the tribunal will be asking similar questions. What are his gounds of appeal: ‘It wasn’t income, but I’m not telling you what it was’?

    #114209
    richardhealey
    Participant

    What are his gounds of appeal: ‘It wasn’t income, but I’m not telling you what it was’? – More or less.

    The situation is quite perplexing. He has had several oppportunities to explain the deposits but, via his solicitor, is insisting the case is put before a tribunal. I assume there will be an explanation which accounts for the deposits but unless he is prepared to give me that at this stage then I can only make a decision on what he has been prepared to say.

    This is what I was getting at when I asked if it would be worthwile asking the tribunal to direct him to submit his explanation before I perpare the submission. It seems enitrely pointless to let the whole thing get as far a hearing only for new information to emerge which would require the decisions be amended.

    #114210
    John Boxall
    Participant

    I would definatley make a request for directions. Point out to TTS that holding a hearing may well be a waste of public funds as it may be possible to revise the decision without a hearing being held.

    I had a case recently involving the valuation of a property, the apellant would not provide an alternative valuation and – after a bit of prodding, TTS threw the case out

    It may be worth writing to The Solicitor saying that you will be doing this.

    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

    #114213
    alison132
    Participant

    I had a similar case that went to tribunal. The claimant was very vague at the hearing and the judge was not satified with his explanations and upheld the Council’s decision.

    #116589
    mmathers
    Participant

    Just come across this thread and the case i have is also similar.

    Claimant would not explain or was very vague as to the nature of a large number of deposits into his bank account and also his wifes account on a few occasions. Between jan 2010 and 2011, the number of credits came to £12,000.00. We decided to treat this as other income.

    Case was heard at tribunal last November. Appellant stated that at the time he was a company Director (which we were aware of, he carried out separate financial transactions whereby he would buy equipment for potential clients i)n order to potentially secure a business deal. The ‘client’ would then credit him with the same amount he had paid out. The appellant states that this is completely a separate entity to his own company and doesnt go through the books.

    The appellant provided a spreadsheet detailing where that for most of the credits there is an accompanying debit. The Judge issued Directions and requested that we reconsider the decision bsed on this spreadsheet and kind of left the ball in our court to make a decision.

    I would be grateful for any words of wisdom in this instance. I am not happy to accept that each credit is cancelled out by a debit… to me it seems that this is a separate business enterprise and so attracts the rules relating to self-employed claimants.

    What do you think?

    #116707
    mmathers
    Participant

    Just come across this thread and the case i have is also similar.

    Claimant would not explain or was very vague as to the nature of a large number of deposits into his bank account and also his wifes account on a few occasions. Between jan 2010 and 2011, the number of credits came to £12,000.00. We decided to treat this as other income.

    Case was heard at tribunal last November. Appellant stated that at the time he was a company Director (which we were aware of, he carried out separate financial transactions whereby he would buy equipment for potential clients i)n order to potentially secure a business deal. The ‘client’ would then credit him with the same amount he had paid out. The appellant states that this is completely a separate entity to his own company and doesnt go through the books.

    The appellant provided a spreadsheet detailing where that for most of the credits there is an accompanying debit. The Judge issued Directions and requested that we reconsider the decision bsed on this spreadsheet and kind of left the ball in our court to make a decision.

    I would be grateful for any words of wisdom in this instance. I am not happy to accept that each credit is cancelled out by a debit… to me it seems that this is a separate business enterprise and so attracts the rules relating to self-employed claimants.

    What do you think?

    🙂

    #116726
    Chris Robbins
    Participant

    So, are you saying that the original Tribunal was adjourned with directions that you consider the additional evidence provided at the hearing?
    If so, that gives you an opportunity to either revise/supersede the decision under appeal or to decline to do so if you are not satisfied that the evidence provides grounds on which to do so. I assume you then either tell HMCTS that decision has been revised or provide an additional submission explaining why you do not accept the explanations/evidence provided by the appellant.
    Did you Presenting Officer get to ask any questions at the original hearing? I.e. why has this information only been provided now instead of when we first asked? Why was it necesary for business activity to go through your personal as opposed to business account? What was the sort of equipment bought for clients and why was this arrangement deemed beneficial?
    Really you are looking at issues of credibility. Do you believe him is the bottom line. If you want more evidence to reach a decision you should ask him for it. If you don’t believe him you are entitled to stick to your original decision and explain to the Tribunal why you have reached that conclusion.

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