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Gifting V Notional/deprivation rules
I have an 80 year old client who has adult children
Last November his son became too ill to work, and was struggling with mortgage etc
Our client gave his son £12,000 as an early inheritance, so to speak, to help him out.
In April 2017 clients sister told him she doesnt pay council tax, and suggested he look into it, so he claimed it.
Claim refused. I was verbally told initially he had intentionally deprived etc etc etc.
I argued he wouldnt have waited 5 months if this was so, and they had to prove intent anyway.
LA came back saying they couldnt prove intent, but as he had admitted it was a gift then they could put the 12k down as notional capital.
Been reading CPAG about notional for people over PC age and no mention of how Gifting money equates to notional : its all about intentional deprivation.
Thoughts please?
Sounds like they are confusing it with inheritance tax, where gifts within a few years of death are still included in the estate. Has no relevance to benefits/CTR.
For CTR purposes, assuming this is a pensioner and we are dealing with the national SPC-age rules, capital should be considered under the traditional two-step process:
- first, does the claimant retain beneficial ownership of it? Not if it was a gift with no strings
- second, was future CTR entitlement a significant operative purpose behind the gift? Not if, as is apparently the case, the client was unaware of the very existence of CTR at the time of the gift or at least had no plans to apply for it.
It’s also possible they have been confused by the drafting of para 34(2) of the CTR scheme which provides two non-exhaustive examples of cases where notional capital should not be taken into account. That doesn’t mean these are the only cases where notional capital is not taken into account: in all deprivation cases you have to get past the threshold requirement in para 34(1) that the deprivation was for the purpose of securing entitlement to CTR. Para 34(2) is saying that you can repay debts and incur reasonable expenditure even if you did have CTR in mind as a significant operative purpose. If CTR wasn’t a significant operative purpose in the first para Reg 34 just isn’t engaged at all.
It’s also possible they have been confused by the drafting of para 34(2) of the CTR scheme which provides two non-exhaustive examples of cases where notional capital should not be taken into account. That doesn’t mean these are the only cases where notional capital is not taken into account: in all deprivation cases you have to get past the threshold requirement in para 34(1) that the deprivation was for the purpose of securing entitlement to CTR. Para 34(2) is saying that you can repay debts and incur reasonable expenditure even if you did have CTR in mind as a significant operative purpose. If CTR wasn’t a significant operative purpose in the first para Reg 34 just isn’t engaged at all.
A direct copy from the “old” CTB regs (For capital), off the top of my head, but apparently some LAs are not seeing, or maybe not willing, to see the difference?
Well I guess everything is complicated enough as it is, shouldn’t really though.
I think your misdirecting yourself on the burden of proof to be honest. The standard would be on the balance of probability, and the requirement to prove ‘intent’ is not a level they would have to rise to; notwithstanding the fact that ‘intent’ is not a word that is used in any event. The word ‘purpose’ which is used, is open to a much broader interpretation.
RB v Secretary of State for Work and Pensions (ESA) [2016] UKUT 0384 (AAC) Para’s 11 & 12 gets to the nub of the issue IMHO on the similar wording in respect of deprivation for the purpose of entitlement to ESA.
[ Edited: 11 Jul 2017 at 02:28 pm by Brian Fletcher ]I seem to remember reading that a funeral plan can be treated as capital or classed as deprivation if purchased to bring savings below £16k
is this correct or am I having a Monday brain freeze
I seem to remember reading that a funeral plan can be treated as capital or classed as deprivation if purchased to bring savings below £16k
is this correct or am I having a Monday brain freeze
Might depend on age of the client? Funeral plans ignored as capital for PC/HB for people over PC qualifying age but not for people under that age (except with UC potentially?)
This thread touches on the issue, so maybe it’s this you were thinking of? Capital and Trusts