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Benefits Compliance Investigation - Is this a case of fraud?
My client had his appointment with the DWP on Thursday 25 April. He is being investigated for fraud.
Somebody contacted the DWP with some allegations which he admitted that some are kind of true (that he had been abroad) and some allegations that are totally unfounded (that he had been working).
Following the investigation by the DWP, it transpired that he has a property abroad, but he said that he didn’t know about the property prior to the DWP investigation.
Apparently over 20 years ago, his Mum purchased a house in Spain in his name and the deed of the property shows his name but she never told him about the property. He said that his Mum kept this information from him to protect herself because at the time, he was a drug addict and his Mum was afraid that if he had access to the house he may sell it to fund his drug addiction.
My client said that his Mum got him to sign the deed as a witness which was written in Spanish and he didn’t speak any Spanish but he signed it anyway.
He is on ESA and he has never declared owning a property because he was not aware of the existence of the property.
He has been told by the DWP that he has to resolve this within 2 weeks and the 2 weeks is almost up.
My client said that he has been asked by the DWP to provide them with 6 months bank statements for himself and his mother. He said that he has tried to get bank account statements from his Mum but she is unwilling to let him give her statements and the deed of the house to the DWP because she said that it is none of the DWP’s business.
My client said that his Mum had “ triple-locked” the property in such a way that he cannot have access to the house or any benefits accruing from it until after she dies – which she put on it because of his drug addiction at the time of purchase. The house is fully paid for.
My client is on ESA support group and he has been waiting since 21 August 2018 to appeal the refusal of his ESA following reassessment. His appeal date is on Monday. He is also on DLA
Understandably, he is very distressed. I will appreciate suggestions on how to go about dealing with this case. Thanks everyone.
Barbara
[ Edited: 30 Apr 2019 at 01:25 pm by DDP ]I’m not an expert on this but capital is valued at its market or surrender value - reg 114 ESA regs. So if his mum has locked it somehow so that he cannot surrender it or realise any value from it then I think the value is zero. But I welcome other people’s views.
And I can’t see that it can be fraud if he didn’t know about it though I guess he has to demonstrate that…
I’m not an expert on this but capital is valued at its market or surrender value - reg 114 ESA regs. So if his mum has locked it somehow so that he cannot surrender it or realise any value from it then I think the value is zero. But I welcome other people’s views.
And I can’t see that it can be fraud if he didn’t know about it though I guess he has to demonstrate that…
For fraud they (the DWP) have to demonstrate that.
Spain has a property register…
Might come in handy; it looks very much like the UK version which can have title documents emailed within the hour.
Daphne’s spot on about reg 114 as well. I had similar in Turkey that was valued down to nil by a Judge.
[ Edited: 30 Apr 2019 at 02:25 pm by Dan_Manville ]I’m not an expert on this but capital is valued at its market or surrender value - reg 114 ESA regs. So if his mum has locked it somehow so that he cannot surrender it or realise any value from it then I think the value is zero. But I welcome other people’s views.
I ran broadly that argument successfully for a JSA appeal where my client had a share in a property that the other party was unwilling to sell (this was in the UK mind you). As my client couldn’t force a sale without the other parties consent, the other party couldn’t buy them out and my client couldn’t afford to take legal action to force a sale the Tribunal agreed that the value of the share was nil. I don’t think the DWP were happy with that as they got the statement of reasons but they didn’t appeal it further.
In this case I would think that, depending on the exact legal process behind this “triple lock”, if the son really cannot realise the asset until mum dies then it should have a nil value on the basis of Regulation 114. There is no market or surrender value until the lock is removed (which is presumably outside the sons control). Though I would think that they would need to provide more detail on the legal agreement to persuade the DWP and/or a Tribunal of that fact!
and presumably mother is willing to make a statement as to what she did, why she did it, and when she told son about it?(if, in fact, she ever did - the way this reads is DWP told him and then he asked mother)
Just a thought, is there any risk that the value of the future interest could be a problem? It would normally be disregarded, but not where “the claimant has granted a subsisting lease or tenancy, including sub-leases or sub-tenancies” (Sch 9 para 9). Might that be the case here?
Thanks everyone! Your answers have been very helpful.
He didn’t know about the property until he was told by the DWP - which his mum was not very happy about.
Also, he is not receiving, and is not expected to receive anything whatsoever on the property until his mother has died
My client said that he has been asked by the DWP to provide them with 6 months bank statements for himself and his mother. He said that he has tried to get bank account statements from his Mum but she is unwilling to let him give her statements and the deed of the house to the DWP because she said that it is none of the DWP’s business.
What use are [the previous?] 6 months of mum’s bank statements to the DWP in relation to a house bought 20 years ago? Do DWP suspect there is rental income from the house or she is giving him other money? Or son is renting the house to mum? I can’t see how they can force your client to provide someone else’s bank statements in any event.
What evidence of his ownership has DWP actually got? An impressive effort to track down ownership of a foreign property that he did not even know about, I have to say.
As CHAC intimates above, I would have thought that nailing down the details of this supposed ‘triple lock’ preventing him ‘accessing or benefiting from the property in any way’ is going to be key. I’m no Spanish property law expert but ordinarily to get the Escrutira publica (Spanish title deeds) you have to sign for them in person in front of the notary, or arrange a power of attorney for someone else to do it. At least that is my experience from a family member buying/selling houses in Spain. You also need a NIE number if you are a foreigner with legal or tax interests in Spain, which can only be obtained in person at a police station, or embassy, or through granting a power of attorney, more documents that he would had to have signed. It may be worth checking if mum has a Spanish PoA for son, that could have enabled her to do more things without his knowledge/participation.
It might have been different 20 years ago and as I understand it, procedures do vary in different regions of Spain. If the house ownership really is registered to the son then presumably it would attract non-resident taxes which mum would not have to pay if she is a resident owner, so it seems an odd way of going about things. If mum bought the house herself and then put it in trust for him the whole thing might make more sense. But who knows, you will need to get the full facts and take it from there. Buena suerte!
[ Edited: 30 Apr 2019 at 05:53 pm by BC Welfare Rights ]
Also, he is not receiving, and is not expected to receive anything whatsoever on the property until his mother has died
Just to be clear, my point was - and I don’t know if it’s actually a real point of concern in this particular case - that a future interest can have a current value. In theory, someone doesn’t have to wait for a property to revert to themselves; they can immediately sell their right to receive it to someone else. What the market is for buying such rights, I have no idea. And the value of most such future rights is specifically disregarded in the benefit system. If no one else picks up on this, I expect it’s a red herring.
He didn’t know about the property until he was told by the DWP - which his mum was not very happy about.
one has to wonder, what was it made the DWP go looking? i can’t believe their resources are so great that they do international property investigations on every benefit claimant .....
He didn’t know about the property until he was told by the DWP - which his mum was not very happy about.
one has to wonder, what was it made the DWP go looking? i can’t believe their resources are so great that they do international property investigations on every benefit claimant .....
Oh I dunno, if they’re focusing all their resources on that then it would help to explain why the rest of their services are so inadequate. Can’t employ enough call handlers or decision makers if you’re paying for your property investigation team to go off and check out properties in Spain, Jamaica or Tahiti.