Scenario: disabled young woman gets £130,000 inheritance. Doesn't tell IS/HB straight away but someone does this for her. Visit from IS VO, who tells her the capital limit is £8,000 and says she's got to repay everything (only about 3 weeks' worth). She repays and decides to do high living for the next year.

Capital deprivation of between half and two thirds of amount above is accepted by her as having taken place. Unsurpisingly, IS/HB re-claim one year later (when capital is around £7,000) is rejected because of self-deprivation. Two questions:

1. Does anyone know if the deprivation rule as currently applied (high spending on yourself effectively not permitted) has been challenged under Human Rights legislation? Those of you with long memories will recall that under Supp Ben rules until the early 1980s deprivation was construed only as giving the loot to somebody else, not spending it on yourself. Then some bright spark decided to take a hard line and a Commissioner confirmed the interpretation. But this was before Human Rights came in - right to enjoy possessions, etc?

2. If para 1 is no good, is there a case for compensation from DWP for lack of advice? She had a VO tell her she wasn't entitled because capital exceeded £8,000. He didn't even tell her about the higher, £16,000 limit for HB/CTB. This is evidenced by the fact that she didn't re-claim these earlier than she did IS. He said nothing about the capital deprivation rule as it stands, so she came to the quite reasonable conclusion that the money was hers to spend as she wished, and set about spending it! She says that if the VO had warned her about the rules she'd have acted with moderation. Any views?

Jim

Surely deprivation is only such if one knows the rules - the trouble being that she did not receive written advice from the VO so the DWP will always say they must have advised her about it. There's no claim for maladministration until you've appealed the decision, I think, but am not sure.

Could be one for the Public Law Line 0808 808 4546

I doubt you have a case for maladministration (no advice to claim again when less than £16k), but the other replier is right when he says the DWP will not submit for compensation while there is any appeal under way; lE compensation will only follow when legal entitlement action ceases. In regard to deprivation, the criteria is that one purposely deprives oneself of assetts so as to gain advantage from the benefits system. It is up to the DWP decision maker to show why they believe there has been unreasonable deprivation; put the onus in them to do so and argue the case at a Tribunal. Overzealous spending is not in itself deprivation.

Check what was saiad to client about capital rules at the time. Was she told about deprevation at the time? someone can only be deemed to have knowledge if they knowR (sb)12/91, the fact they could have found out is irrelevant. The yellow pages of payment book, or notes sent out with bank payments do not explain deprivation. They only tell the claimant tha they may be able to claim if capital drops below X amount. We have successfully argued that the literature encourages the spending.This obviously depends on the individuals personal circ'sLe.education, learning difficulties etc. But the bottom line is what was the 'significant operative purpose'{R(sB)9j91} which is the crunch. Again look at the background.Many Chairman have often applied 'moral' interpretations of this and we have successfully challenged at commissioners.I.E. Aclaimant had to know, a claimant should know.They should only deal in facts. Lots of good text in Bonner and Mesher Vol 2 (2003) pgs.369-381. If client is deemed to have deprived herself ensure the Deminishing notional capital rule is applied correctly. Goodluck

Many thanks for helpful comments. I've only just got to them after two weeks' summer leave.

I'm interested to hear that knowing nothing of the deprivation rule might be a factor. Incidentally, there's a golden piece of evidence that the VO didn't tell her about it, as she steadfastly claims. He made her sign a statement along the lines of:

"I understand that I am not entitled to IS because I have over £8,000 in savings. I am returning my IS book accordingly."

Nothing else. Inference - he said nothing about capital deprivation rules. If he had, a man of his calibre would have added to the statement:

"I understand that I must not deliberately deprive myself of these savings in order to obtain IS again", or the like.

Certainly, my client deprived herself of the capital (in various imaginative ways!) thinking she could get back on IS as soon as she dipped below £8,000 again. She freely admits this now. Are we sure, technically speaking, that she might be extracted from the clutches of the deprivation rule by the VO's failure to give relevant info? My thoughts had been that she was stuck with it but that she might get compo (after all appeals, etc, are exhausted) giving her enough to live on (ie equivalent to IS entitlement).

PS - any thoughts on a challenge to deprivation under the HRA?

Jim

I think it is the intention that is key. If the claimant knew that their capital had to be under 8000 and set about spending it so as to claim IS does that show that their intention in spending the money was to increase entitelement? Did she know at the time she spent the money that she would increase her entitlement?
If client has admitted that she spent the money so that she could re-claim it may make her case weaker.