Forum Home → Discussion → Universal credit migration → Thread
Is UC only option if ESA stops?
Even if it were for UC, I wouldn’t be confident that creating a credit on the rent account would fall under the ‘paying a debt’ protection. I don’t think next year’s council tax is even a contingent liability, is it? On one view it’s still your money, as all you have done is overpay in the current year, and could arguably demand that the council repay you rather than wait to carry it forward.
Back to HB, the guidance doesn’t get into the specifics of priority vs non-priority:
W1.732 When capital has been used to repay a debt give careful consideration as to whether the debt needed to be repaid at that time. If there was no legal obligation to do so then it may be that part of the claimant’s purpose was to obtain or increase the amount of benefit.
the customer / cliemt has been sectioned and has been in hospital, it is reasonable that he was not in a position to deal with his day to day financial affairs. As jhis capital has increased over £16k now, it is reasonable that he pay the rent and ctax since the date his capital went over £16k ( because either he has recovered suffieciently to deal with his affairs or he now has someone helping him with these things)
There is no dount that he will have to pay the rent and ctax from the date his capital went over £16k, so it is very difficult to see how doing this now he has able to/ has help in dealing with his his affairs could be justified as deprivation. It is the reasoning for spending the money which is important. There is no end to “wait” for an overpayment and pay that back.
Given the customer’s circumstances of being sectioned and in hospital for a long period of time, I think it would be highly difficult for a LA to prove the intention was deprivation, rather than the customer not realising hos capital had exceeded the limits ( becaise of his health and mental well being) and once he did, paying the rent and council tax he would have paid had everyone been notified at the time.
He will have to pay these at some point, either by way of repaying an overpayment or by making payment direct to the landlords/ Ctax
I’m not sure we want this discussion to veer off into one about artificially creating liabilities in a way which appears legitimate to get around the capital rules.
As others have said above:
“I’m not entirely comfortable with the idea of advising a client of how they might game the system ...”
“I think as welfare rights advisers we need to be very cautious about telling people what they can or should do with their capital (in other words, I don’t think we should be doing it at all) ...”
Cheers - Shawn