Notional capital

Client last worked March 2011, and at the time had £30,000 savings. She was aware of the capital limits and the notional capital rule. She claimed JSA, contribution based, for six months but stopped signing on when it stopped. She then spent her capital, having £2500 when she claimed ESA in July 2013.

She says that she did not want to claim means-tested benefits, because she was ashamed, and if she had spent money with the intention of claiming benefit she would have claimed when her capital dropped below £16,000. Therefore she did not intend to become entitled to benefit.

Any thoughts on this?

She spent about £14,000 a year, which is more than she would have got on benefits. She had no expenditure single item over £300. She has bank statements so there is no question of her squirreling cash away and being thought to have actual capital. But she could have moved to a cheaper house, and eked out her capital a bit longer.

She has a customer compliance interview coming up. Is there a risk she could have notional capital because she spent her savings a bit too quickly?

She will have to explain what she has spent the money on and if she had no other income then the £14k per year is not excessive. Normal expenditure will be accepted so all bills, rent and council tax will be accepted and no-one is expected to move house to eke out money. I have successfully assisted in several cases where capital has reduced, only one had to be formally appealed and was successful. As she did not claim as soon as her capital dropped below the £16k this will help in the conversation around the reduction and worst case scenario as long the accepted spend is just over £14k, her notional capital would be £15,999 and would only impact on the rate of ESA paid to her allowing her to access help with rent and council tax.

Hi Abigail,

was any of the capital contractual redundancy pay?  If so it would have been ignored for JSA anyway. 

I can’t see how they can argue that she spent her capital in 2011 or 2012 in order to qualify for a different benefit in 2013.  Did she have a crystal ball telling her her health would deteriorate?

I don’t have much experience of compliance interviews, but I can’t see what they can criticise her for in this case.

All the best,

Cordelia

There is a commissioners decision (HB I think) which states that there is “no statute of limitations” in deprivation cases, so the length of time passed is no defence in itself.  But, yes, It would be a very devious mind that though that far ahead just to get a low level benefit.  Unfortunately, I can’t remember the citation.  However, on the bare facts of this case I’d be amazed if the DWP could make a notional capital decision stick.  Given the level of possible housing costs, council tax, fuel and food, clothes, toiletries, etc, not to mention a reasonable level of social life, her expenditure seems entirely reasonable.

Thank you. They may just assess actual capital, and notional capital may not come up. But it is lovely to be in at the start, rather than when the appeal goes in to try to save the situation.