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Capital accrued from benefits
A colleague has asked me to look into this for one of his clients.
She is 60 and has been sectioned a number of times over the years often for fairly lengthy periods of time.
She is on HB/CTR/ESA/PIP and has been for a long time (or the previous iterations of these benefits).
The Council has asked her to provide bank statements showing when she accrued more than £5,500 in her bank accounts. I understand she has a number of bank accounts and has requested statements going back about 9 years.
She currently has about £29,000 in the accounts
She explained that, until February 2023, she had about £22,000 in cash in her flat, she has now paid the cash into her bank account, hence the large amount of money in the accounts. She has been meaning to buy a car for a number of years but, because of her medication, she is unable to drive so has postponed the car purchase. She said she did not realise she had so much cash in the flat.
She said she has been saving the money to buy carpet/bed/funeral plan as well
She said all the money has come from her benefits, she just lives very frugally.
I am just wondering if there is any argument to make to say that these ‘savings’ are in fact ‘income’ and therefore she should not be treated as having capital. I appreciate it is a bit of a stretch but can’t see anything that differentiates between capital and benefit savings. I have seen the info about which benefit money can be ignored for up to 52 weeks, eg arrears of benefit and other benefits that are ignored but none of these seem to apply in her case.
If the worst comes to the worst and they treat her as having over £6K in capital, then I suppose it may be possible to argue that she did not knowingly fail to disclose because of her mental health.
At present the Council has not suggested there is a problem but I think my colleague wants to get his ducks in a row first.
Thanks for any advice.
Not an unusual scenario. Indeed I recall Tameside MBC producing a booklet on all the things people could spend on locally in order to not arrive in this exact scenario.
Not a chance re: the income argument unfortunately. It’s capital and always was. Essentially you’re waiting for a benefit stoppage and some overpayment decisions.
The argument against recoverability is slightly different and will not be straightforward. The question is really about what your claimant knew. If they knew they had the capital then the chances of a non-recoverability decision slim considerably.
For HB she’s surely stuffed on recoverability, regardless, Mike? I can’t see how she gets past official error…..
Yes absolutely.
The only caveat I would add here is that where you have someone with this kind of history it’s worth contemplating a SAR (subject access request) as to what was disclosed. I’ve certainly had cases where a claimant with no recall of disclosure actually had done so several times over a long period.
Thanks for the responses. I had a feeling there was probably not much hope but always worth checking it out. I suppose my colleague just waits for the inevitable overpayment decision and will have to deal with it when it happens.
I would phone up the AMHP team and have a chat with the AMHP who was responsible for her during her mental health crises. The AMHP makes the decision regarding a Mental Health Crisis Breathing Space which whilst it may not be a permanent solution to this issue gives an indication to the authorities of the vulnerability of the claimant.
“A mental health crisis ‘Breathing Space’ is available if an Approved Mental Health Professional (AMHP) certifies that a person is receiving mental health crisis treatment. A mental health crisis ‘Breathing Space’ lasts for as long as the person is receiving treatment, plus 30 days.
DWP will need to stop debt deductions from:
income-based Jobseeker’s Allowance
income-related Employment and Support Allowance
Income Support
Pension Credit
Deductions for ongoing fuel charges and water charges (Water Direct) will continue during the ‘Breathing Space’.
Thanks, could be useful when it comes to the crunch.
To be honest if where you end up is that the o/p’s are recoverable then a breathing space is going to be neither here nor there.
It’s more about making an argument that, whilst there is recoverability, the circumstances of the case should lead them to exercise their discretion to not recover.
I wouldn’t rule out an SAR though. I had a client who had years of alcohol abuse. Coming out of the other side of that they recognised that they really couldn’t say what they had or hadn’t done in the preceding decade but they were pretty confident that most of the time they were so out of it they would have been barely capable of holding a phone let alone making a disclosure. A SAR produced three separate instances which amounted to clear disclosures and the consequence was that around £20k of o/p’s ceased to be recoverable in an instant.
Thanks Mike. I certainly think arguing for them not to recover would be the way to go but will flag up the SAR suggestion to my colleague. I’m going to point him in the direction of referring his client to the local CAB with this one!