I am I correct in thinking that there is a £20 disregard of income if the person is in receipt of incapacity benefit (76.50 per week)?

So if someone was applying for pension credit - aged 64 - has no other income apart from the incapacity benefit and capital of 14,000, would their income be assessed as being £76.50 plus £28 assumed income from capital less £20 disregarded - making it 84.50?

With regard to deprivation of capital, is it allowed for someone to purchase a small car or would that be considered an extravagance!

Your £20 Disregard question - Its only a disregard of £20 if the person is doing paid work - benefits like incapacity benefit do not have the £20 disregard I'm afraid

Your Capital question - The key word is always "deprivation". If someone was intending to buy a small car the Pension service would need to show the person was doing it deliberatly just to reduce their savings.

The pension credit saving rule ignores the first £6,000 (£10,000 for people in residential care homes) so it would only be £8,000 of the £14,000 that would be counted and so would be £16 assumed income not £28

Hope that helps

Penny

Thanks, Penny.