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ovepaid IR ESA
my client has POA for her daughter, client gets HB which has been stopped as the Council has found client has over £16.000 in savings, these savings are however her daughter’s money held in trust, bank account is in clients name but money is from daughter’s ESA,
the problem now is daughter looks to have been paid a huge amount of ESA as cash in bank is £30.000
daughter doesn’t have capacity for decision making, so is there any chance of an appeal on grounds daughter was not aware of capital limits
and can the client appeal HB as cash is held in trust for daughter and is not her own cash
thanks
Has client’s HB been suspended or actually terminated? Either way, assuming the client can show the funds are held on trust for her daughter, that should not affect her HB entitlement.
I assume there is no formally impressed trust here? By which I mean a proper deed of trust, drawn up by a solicitor, which sets out how the funds are to be used and naming your client as the trustee and your daughter as the trust’s beneficiary? If there were a formal trust, that would make things straightforward.
If there isn’t, your client can still argue the funds are held on trust (and it’s common in family arrangements that things aren’t done formally) but it will require the evidence to properly stack up….
- It is easier where the only funds in the account are the daughter’s and your client has not co-mingled her daughter’s capital with her own.
- It is easier where you can show the source of the funds - i.e. regular payments of the daughter’s benefits into the account (and no other payments going in).
- It is a requirement you can show that the funds are solely being used for the daughter’s benefit - if your client is using/has used some of the funds for her own needs, in the absence of there being any formal trust, that casts real doubt on whether there is actually a trust (if there is a formally impressed trust and the trustee has used the funds for their own benefit, they’ve entered a whole other world of pain…..).
Bank statements going back over the period the funds accumulated are the evidence you will need.
As for the daughter, a discretionary trust would mean the capital was disregarded whilst in the trust (pay outs from the trust can sometimes be income, sometimes capital). A discretionary trust is one where the beneficiary (here, the daughter) has no absolute right or ability to draw on the funds but instead has to make any request to the trustee (here, your client) and it is at the trustee’s discretion as to whether or not to agree to pay out from the trust. But without there being a formally impressed trust it is going to be very difficult to argue that the trust is discretionary. Instead, I think, the capital is the daughter’s (if it is not your client’s and there’s no discretionary trust, whose else can it be?) and if it’s £30k she is over the capital limit. Her not having capacity/not knowing how much is in the account is irrelevant - that is precisely why your client has POA.
There could be an argument about whether DWP ever issued daughter/her appointee clear and unambiguous instructions as to what must be disclosed in terms of capital (if it did, that is an end of it) and if it did not then you could be into the territory of being able to argue what the client/appointee/mother understood about capital limits and obligations to disclose….but it seems to me you’ve a lot more digging to do before you’re at that stage.
[ Edited: 17 Apr 2024 at 10:08 am by past caring ]I’ll be honest, I’m struggling to understand exactly what you are asking here?
The client had a HB award that has been suspended as LA have found our your client has over £16,000 in her bank account. Your client says this money isn’t hers, it’s her daughter’s money that she holds as she has a Lasting Power of Attorney for her. Are you saying that your client says all of the £30,000 is her daughter’s money or it it a mixture of your client’s money and her daughter’s?
Because you have a thread title about overpaid ESA so if the daughter’s money in your client’s bank account exceeds £16,000, then obviously there is no entitlement to ESA from the date this threshold was exceeded. If that is the case, then the fact that the daughter doesn’t have capacity is neither here nor there, the client with the LPA has the duty to report all relevant changes etc so any ESA overpayment would be recoverable from her potentially.
Are there actually two problems in one here, the HB award suspension due to client having over £16,000 and nil entitlement to ESA due to the same? If so, then almost by default, one of these decisions must be wrong as two lots of £16,000 adds up to more than is actually in the bank account. Obviously there could be tariff income and residual overpayments in either case but this query is so jumbled, it’s impossible to understand what is being put forward.
It is for precisely these reasons that the OPG advise people with LPA’s for financial decisions to keep separate bank accounts for themselves and for the donor (i.e. the daughter) so that it is absolutely clear whose money is whose.
In fact, now I am doubting my own analysis here - to have a Lasting Power of Attorney, the daughter would have needed to have mental capacity to make the LPA in the first place which would be an unusual situation to have later lost it.
So when you say the client has “Power of Attorney”, is she in fact a Court-appointed Deputy or is she an appointee?
This may not be particularly relevant but if these are ‘legacy’ benefits and the cl only has POA then they are not the appointee and do not have any duty to disclose a change to the Sec of State ( see CSDLA/1282/2001)and it would appear that the duty to disclose would then fall on the actual claimant.
There is reference in the 19/20 Sweet and Maxwell regarding Regs 32 &33; of the 1987 Claims and Payments Regs - i dont have a later copy as they are in another office so it would be wise to check before launching something!
Many years ago I won an appeal on these grounds, the claimant did not know how much money they had and the POA didn’t tell her.
The POA didn’t have any duty to disclose and the claimant couldn’t disclose something she didn’t know about - by the time the overpayment was discovered the claimant had finally lost capacity so the Judge found that the overpayment was only recoverable from the date the claimant was assessed as having lost capacity
This may not be particularly relevant but if these are ‘legacy’ benefits and the cl only has POA then they are not the appointee and do not have any duty to disclose a change to the Sec of State ( see CSDLA/1282/2001)and it would appear that the duty to disclose would then fall on the actual claimant.
There is reference in the 19/20 Sweet and Maxwell regarding Regs 32 &33; of the 1987 Claims and Payments Regs - i dont have a later copy as they are in another office so it would be wise to check before launching something!
Many years ago I won an appeal on these grounds, the claimant did not know how much money they had and the POA didn’t tell her.
The POA didn’t have any duty to disclose and the claimant couldn’t disclose something she didn’t know about - by the time the overpayment was discovered the claimant had finally lost capacity so the Judge found that the overpayment was only recoverable from the date the claimant was assessed as having lost capacity
Thanks Pete, that’s a useful reminder.
What Pete says is quite right and as Paul says, a useful reminder.
However, what the op says…..
daughter doesn’t have capacity for decision making, so is there any chance of an appeal on grounds daughter was not aware of capital limits
is not quite the same thing. It doesn’t necessarily equate to the claimant/beneficiary not knowing how much is in the bank account. “Clear and unambiguous instructions” these days generally take the form of “you must tell us if your savings go up or down” without any specific reference to the capital limits. Of course, if you don’t tell the DWP your capital has increased from £3k to £5k there are no consequences. But that instruction is enough to catch you if your capital increases from £5k to £10k, regardless of whether you are aware of the capital limit. And as I say, not knowing what the capital limit is and not knowing you have £30k in the bank are entirely different things.
Even if there is an actual POA here (and I’m not certain the OP has necessarily used that term appropriately) that wouldn’t preclude the client also being a reg. 33 Claims & Payments Regs appointee, I think. In that situation, I don’t know the client could rely on CA/1014/1999 and CSDLA/1282/2001?
Do we not need to be concerned about mum’s conflict of interest here?
She has (we understand) caused the daughter’s ESA to be stockpiled and created an overpayment. The LA has gotten the wrong end of the stick and now, to escape her own liability for a HB overpayment, she needs to dob her daughter in for the ESA overpayment which she in fact caused to begin with.
Isn’t her position as appointee, attorney, deputy or whatever compromised?
Do we not need to be concerned about mum’s conflict of interest here?
She has (we understand) caused the daughter’s ESA to be stockpiled and created an overpayment. The LA has gotten the wrong end of the stick and now, to escape her own liability for a HB overpayment, she needs to dob her daughter in for the ESA overpayment which she in fact caused to begin with.
Isn’t her position as appointee, attorney, deputy or whatever compromised?
There is certainly a fiduciary duty on someone with an LPA for financial decisions to take appropriate actions in respect of the donor’s assets. But like I say, to create an LPA, the daughter would have needed capacity in the first instance and in our experience, for obvious reasons, it is usually the parent making an LPA and appointing their child as an attorney for if/when they lose capacity.
As such, it would be very helpful if the o/p could clarify precisely what is happening because, as I said, the whole thing as explained is very confused.
@ Elliot and Paul - we could do with like buttons. These things too, clearly…....