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Capital
Hi my client’s mother has just passed away and he has found out that he will come into about £30,000. His question was: if I us this money to pay my mortgage arrears off which is about £32,000 (he has been on ESA for a few years) will I still be entitled to claim ESA or will they see it as he got rid of his money.
thanks
Are the arrears on the mortgage £32k or is £32k the total amount outstanding?
Hi
His mortgage should have been paid off 18 mths ago but the bank have been good with him and DWP have been paying the interest and he has paid £50 per mth So I guess the total arrears is the total owed. He is worried as the bank are getting a bit twitchy and they don’t even know about the money coming to him
Do you have access to the CPAG handbook? P.367 may be of some help. In essence, it doesn’t give a definitive yes/no on the subject of repaying debts, but it seems to come down to whether your client has a legal obligation to repay the sum immediately. From the sound of it, he was supposed to pay more, but the mortgage lender has varied the repayment terms (temporarily?) to ease the financial pressure. The question here is whether the lender has extended the mortgage (so your client is not in arrears) or has kept the terms the same, but treating the unpaid sums as mortgage arrears (so he is in arrears).
It could be worth contacting the lender to see what they think about it. I’m unsure whether varying the repayment terms (albeit with the lender’s consent) would mean your client is or is not liable for the normal payments.
Remember, the DM has to prove an intention to get benefit as a result of getting rid of the capital. If your client genuinely believes that his home is at risk if he does not pay off these “arrears”, this ought not to be judged to be deprivation of capital. However, I can see a DM/tribunal potentially taking a sceptical view of this, especially if there was the consent of the lender to make lower payments and there was no risk of losing his home, so I’d be inclined to get something to back up the assertion that your client is not spending the money in order to get benefit.
Hi
Thank you I will speak to my client and advise him to speak to his lender.