Some quick advice needed please

I have a client who has £22,500 in capital. This has just been declared to DWP and LA. She was receiving ESA-IR including EDP & SDP and HB. There is an overpayment of £10K for the HB. We’re waiting to hear about the ESA O/P. Assuming she uses her capital to repay the O/P, am I right in thinking she could get ESA-IR put back into payment, including SDP and then reclaim HB from the following week? I assume she would be prevented from claiming UC as she would have an entitlement to SDP?

Depends whether this can be dealt with as a closed period supersession without disturbing a continuing award of at least one of ESA(ir) and HB.  There is clearly going to a period in which she was entitled to neither, and if today in real time she has more than £16,000 she is currently not entitled to either benefit.  If a decision to that effect has already been made on the HB side, the only hope for a closed period supersession is ESA.  That would mean the capital needs to get down below £16,000 again before any ESA decision is made.  Otherwise no new claim will be possible as there will be no current/recent SDP entitlement.

By the way, I haven’t seen dates/figures but it is extremely unlikely that the HB overpayment has been calculated correctly.  In the mandatory diminishing capital calculation, once the first £6500 has been accounted for tariff income will reduce HB by a maximum of £26 a week - reducing each time the diminished capital drops down a TI level.  The overpayment period would need to be quite long to bring the total o/p up over £10,000.  Penny to a quid the Council hasn’t done the diminishing capital calculation and you should be able to get a couple of thousand shaved off the debt.

Thank you for the quick reply.

Wouldn’t diminishing capital only apply if she had deprived herself of the capital? She still has it.

The O/P period is 20/05/19 to 26/01/20 when she was entitled to neither.

There are two kinds of diminishing capital calculations - one for deprivation and one for overpayments.

In an overpayment case, the idea is to work out how much capital the claimant would have had to spend on rent if they had not been receiving benefit.  For overpayment calculation purposes only, the capital might reduce to below £16,000 (as it would in this case) before the end of the overpayment period which means the overpayment isn’t as much in subsequent weeks beyond the point where it dips below £16,000.  This doesn’t allow the claimant to remain entitled to benefit going forward - in real life they still have more than £16k - it’s just a way of mitigating the overpayment.

If that method is correctly applied, it is mathematically impossible for an HB claimant to be overpaid £10,000 in eight months on £22.5k capital.  They’ve done it wrong - 100% certain.

Excellent.Thank you.