Arrears of Contributory Benefits - treated as Capital?

I have a client who after Appeal was placed in Support Group and received just over £4,000 arrears of Contributory ESA.
Due to being placed in Support Group, this entitled her to a top up of of ESA(IR).

The issue now is that she is due to receive an inheritance of approx. 5k, and still has majority of ESA(C) arrears in her account (Arrears paid Sept ‘14).

I initially thought the arrears would be disregarded for 52 weeks, however on reading this more closely it appears this disregard only applies to Income Related benefits, and not Contribution based.

Does anyone know therefore if this is correct and her total capital of approx 9k will now be taken into account, and tariff income etc. applied to her HB and IRESA?

Thanks in advance.
Greg

See. p.355/6 of WBH 2014/15 which confirms what you thought insofar as it is only arrears of income-related ESA that are ignored. Thus I think that your client will be facing tariff income of the amount over £6,000. If they are any debts outstanding, etc, then it might be an idea to pay these off but see p.360 for how to approach this issue.

If she’s on income-related ESA and retains some entitlement after the tariff income, then HB payments should be unaffected.

Watch too for an HB overpayment. I’ve seen a couple of LAs which have tried to rake back the HB due to retrospective income which now falls to be taken into account.

Thanks Paul, Dan,

I’ll keep an eye out for any HBOP - there shouldn’t be as her IR ESA top up has now been awarded back to Aug ‘13 the date of the (C) award.

It just seemed a bit unfair that the arrears are treated as retrospective income but can also be counted as Capital.
This client has Mental Health problems and survived on WRA component only for 9 months until it was eventually sorted.