Forum Home  →  Discussion  →  Income support & JSA  →  Thread

Diminishing Capital Calculation

 

 

Victor
forum member

Welfare Rights Officer, Stockport Council

Send message

Total Posts: 118

Joined: 17 June 2010

C had undeclared capital of over £16K. 

IS calculated overpayment and used the Diminishing Capital rule in SS(PAOR) Reg 14.  Each 13 weeks the actual capital was reduced by the amount of the IS overpayment to give an notional capital figure.  As a result the overpayment is less than it would otherwise be. 

HB have done the same thing under HB Reg 103. 

However if they had declared their capital at the time their capital would have diminished at the rate of (the amount of IS) + (the amount of HB) and thus diminished even faster. 

I cannot see any argument for the capital to be treated as diminishing more quickly.  Have I missed anything?

As a result of all this the total overpayment is more than the capital he had in the first place. 
Seems unfair somehow.

     
HB Anorak
forum member

benefits consultant/trainer, hbanorak.co.uk, east london

Send message

Total Posts: 1087

Joined: 12 March 2013

This was addressed by Deputy Commssioner Humphrey in CH/0314/2007:

12.  Does the diminishing capital rule apply to each of HB and CTB separately? The tribunal rejected the claimant’s argument that the diminishing capital rule should not be applied separately to HB and CTB on the grounds that each benefit had its own regulations.  Although I have some sympathy with the claimant in his view that the result is otherwise unfair, it seems to me that the regulations simply do not permit the HB and CTB calculations to be combined in the way he seeks.

In that case it was CTB rather than IS, but exactly the same principle will apply.  This contrasts with diminishing notional capital where all the different benefits are combined to achieve a more rapid diminution.

     
Victor
forum member

Welfare Rights Officer, Stockport Council

Send message

Total Posts: 118

Joined: 17 June 2010

Thanks for this.  It was what I expected but it’s good that the UT have already looked at it.