capital limits and overpayment

Hello, I have a client who is a very low spender and, it seems, a hoarder of cash.  She has quite profound mental health problems, which explains the low spending habits. She has just received a decision that she is no longer entitled to JSA due to having capital. (She should be on ESA but does not accept she cannot work so is always looking for work). She has also been told that she is not entitled to JSA from 2018 to the present. We are waiting for the linked overpayment decision letter for this same period. HB has also just stopped and we are waiting to hear from them. She receives PIP. The only income she has had for many years has been JSA, HB and PIP but as a low spender she has accumulated capital from these benefits. She withdraws large amounts of cash regularly which has kept her bank account below £16,000 and often below £6,000. She is going to be facing very large OP’s. However there doesn’t appear to be any dishonesty or intention to stay below the thresholds to remain entitled. There is no other income which would explain the low spending.
I am trying to find grounds to submit an MRR, but struggling. The DWP appear to have made a blanket decision to cover the whole period following the first large cash withdrawal of £5000, despite her account clearly going up and down since. She hasn’t been able to provide any rational reasons for withdrawing large sums of cash and she hasn’t been able to provide receipts for large expenses. Apart from asking them to use their discretion not to recover any overpayments, which I consider is very unlikely to be successful, does anyone have any other suggestions on options please?  Is there any case law on this type of situation? Can I submit an MRR on the basis that they have made a blanket decision for the whole period without doing a thorough financial investigation to show that the savings would have subsequently often fell below the thresholds taking into account notional spending levels?

Hi Laurel.

You say she is a low spender and a hoarder of cash.  Does that mean that she has the actual cash rather than money in the bank as it all counts not just whatever her bank statements show?  Is there any reasoning behind her taking money from the bank and storing it elsewhere if you think it’s not to do with appearing to meet the capital limit rules?

I think a lot depends on how much capital she has had throughout the period of the alleged overpayment, in whatever form it has been held.  Certainly if she has been withdrawing large amounts of cash, spending it but has no records of what it’s been spent on it’s an arguable case that there should be no / limited overpayments to be recovered, but if she’s been taking it out of the bank and stashing it around the house the overpayments would stand if this and the bank accounts add up to £6000 or more.

Mairi

It would help to know the precise terms of the decision(s).

It appears there is an entitlement decision that terminates benefit - and if that is the case, it must either be on the basis that client’s capital at some point exceeded the £16k limit or that the tariff income from said capital when added together with other income took her over entitlement levels.

In terms of the overpayment decision, I’d not necessarily get exercised about whether the DWP were procedurally correct in making a ‘blanket’ decision for the whole period - the primary issue is what is the correct overpayment figure and whether you can come up with the evidence and argument to win on this at tribunal.

My starting point would be this: the client is a low spender and therefore accumulates capital, but nevertheless periodically withdraws large capital sums in cash. That would suggest she is aware of the capital limits and also suggest the withdrawals are made for the purpose of keeping the (traceable by the DWP) funds in her bank account below £16k. Unless she can give a credible account of what those large cash withdrawals were spent on, it would not be unreasonable to suppose they have been tucked under the mattress and that she has capital well in excess of £16k. That would be the route I would be going down if I were arguing the case for the DWP and I think it’s something a tribunal would likely accept without an explanation to the contrary.

So I would not be worrying about evidence at this stage; at this point what I would want is a credible explanation from the client as to where the withdrawn cash went/what it was spent on. Depending on her answer to that it may or may not be reasonable to expect evidence of the expenditure - e.g. Curry’s will give you a receipt for a new 55” flat screen TV and even if you’ve lost it, the model number might help show it has been purchased within the last 2 years but at the same time your local crack dealer is unlikely to hand out a chit for the 20g bag you’ve purchased…...

Thank you to both of you; it is useful to have second opinions. I am probably clutching at straws trying to find grounds of appeal when there isn’t any…  She hasn’t got any receipts for large purchases and says that she just withdraws large sums as she likes to use cash instead of bank card as she forgets her pin number. She isn’t well so it is very difficult.

Well that isn’t an unsustainable position. With the right evidence, I’d certainly be prepared to argue it. What would that right evidence look like?

- her bank statements going back and covering the overpayment period*

- those bank statements then tending to confirm what she says - i.e. large cash withdrawals and very few debit card transactions over the relevant period; not on food, not on clothing, not on bill payments. Certainly, you’d be looking for a pattern of transactions suggestive of someone paying by cash rather than debit card.

- large withdrawals of cash should show on her statements as ‘counter withdrawals’ - i.e. they show she has gone to the bank in person to withdraw the cash (that would be consistent with the fact that cash machine withdrawals are limited to £300 and require a person to use their pin -  she says she cannot remember it).

*In the not unlikely event she’s not kept them, they can be obtained from her bank - her preparedness to consent to providing them may also allow you to better assess her credibility.

I don’t have any ready answers or anything to add to the above, Apart from the following on the basis of trying to bounce ideas.

My experience of these case scenario’s of hoarding benefits monies have involved clients with psychotic conditions almost exclusively clients with Paranoid Schizophrenia with negative symptoms - https://www.nhs.uk/mental-health/conditions/schizophrenia/symptoms/

Those clients self-neglected to the extent that it may include malnutrition and much more and ‘unfounded beliefs’ i.e. delusions underpinning the hoarding of monies.

Apart from the other issues wouldn’t there be a reduction of notional capital in working out how much she actually owes, if it is considered to have started in 2018.  The actual ESA or HB overpayment might not be as much as it initially seems, plus if the calculation on ESA reduces to the point where she has entitlement again, then she automatically has entitlement to HB without any calculation being needed.

Sorry, JSA not ESA, but the same principle applies.