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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

UC and Notional Capital

DM128
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Our client is in receipt of UC. He has his UC payment reduced due to the DWP treating him as having capital of over £13,000. (he does not have this amount, he has no capital). He has £126.15 stopped each month and this has been the figure for 15 months.
It states that notional capital does not stay the same. It will reduce by an assumed amount in each assessment period.

So should the £126.15 not be being reduced each month as the notional capital is reduced.

Elliot Kent
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Yes, this is called the Diminishing Notional Capital rule. The idea of notional capital is that it is money which you could have spent meeting your living costs, so you are treated as having it available to spend, but if you had it available to spend it would reduce over time so the notional capital also reduces over time. See Reg 50 UC Regs and ADM H1900 on.

If he has had notional capital at the same level on his claim for 15 months then either they have it down as actual rather than notional capital or something has gone wrong.

DM128
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Thanks Elliot, as always.
He took this to Tribunal with regard to NC and it was refused because they did not accept that he paid for his daughters wedding as acceptable.

The UC award states -£126.15 deduction because he has savings, investments or capital over £6000.
He has no capital.

Elliot Kent
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It’s fair enough that the award says there should be a deduction because he has capital - whilst that isn’t strictly correct, the legislation treats him as though he did.

However the calculation is wrong and needs to be challenged. If is NC, it should have reduced over time.

Paul_Treloar_AgeUK
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Notional capital
50.—(1) A person is to be treated as possessing capital of which the person has deprived themselves for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.

(3) Where a person is treated as possessing capital in accordance with this regulation, then for each subsequent assessment period (or, in a case where the award has terminated, each subsequent month) the amount of capital the person is treated as possessing (“the notional capital”) reduces—

(b)in a case where the notional capital exceeds £6,000 but not £16,000 by the amount of unearned income that the notional capital is treated as yielding under regulation 72.

As Elliot says, they’re using the wrong amounts. The amount of notional capital (which I make as being £13,250) should decrease by the amount of unearned income ascribed to it, so initially is should have gone down by £126.15 a month . So after two months, that means the amount of notional capital should have reduced to £12,997.70 so the unearned income figure should have reduced to £121.80 a month.

This continues as the notional capital falls in £250 increments which in turn reduces the unearned income by £4.35 a month each time.