Please help - my brain is going into overload!!

Client receives Income Support. She has obtained a County Court Judgement against a debtor and wishes to apply for an attachment of earnings to ensure the return of her money. However, we are concerned that this will class as `income` and as such be taken £1 for £1 off her IS - in effect this would mean that she recovered nothing. Have rang the Social Security regarding this but they dont know the answer! also cant find anything in any of our books.

Any assistance gratefully received.

Only thing I can think of is a possible disregard depending on the nature of the debt. If the CCJ has been obtained to force payment of a sum that is owed for something that might have been ignored then there might be some hope.

May help if you could state exactly what the debt was (what it is owed for)?

Martin

As Martin says, what is the debt for? For example, if it is for something which the client sold to the debtor then, if it had been paid for correctly - i.e. as a lump sum - the receipt of the money by the client would presumably be capital and not income. In that case, is there any mileage in arguing that the paymnets under the CCJ are each a part of the capital which is owed? The same argument might perhaps work with anything else of a one-off nature unless it was clear that the payment of the debt was part of the client's income stream - e.g. if it was for work the client had done on a self-employed basis for the debtor.

You haven't said how much the debt is. IS Gen Reg 41(1) says that capital payable by instalments (as in an attachment of earnings order) is only treated as income if the total debt outstanding to the claimant, when added to any other capital they possess, takes them over the upper capital limit - presumably £8,000 in this case.

So, it follows that if the debt outstanding plus any other capital amounts to less than £8,000, it's 'no worries'. Otherwise, it's tough going.

Jim