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Deprivation of capital
Good morning,
I have a client who states that the DWP have determined he has deprived himself of capital and have applied notional capital to his UC award. He owed his mother money and gave her £8k. She was not in danger of destitution herself and the DWP have stated in his MRN that it was unreasonable to give her that amount amount and a monthly payment plan should have been entered into. Client wants to know if there are any chances of success if he were to go to appeal. I am of the opinion that he will not be successful and it would have been more reasonable to pay her back monthly. I wanted to get a feel for other people’s opinions, despite it sounding a bit cut and dry to me. Does anyone think he has a chance of success?! And if so what could he possibly provide to show it was reasonable to give his mother this amount.
Thanks in advance for any information/advice in advance.
Maybe start by having a read of this?
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Maybe start by having a read of this?
This is very useful, thank you!
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Could the courts not also come to the same conclusion that it was not “reasonable” though?
The information I have seen says ’ the deprivation rule does not apply if the claimant reduces or pays a debt which they owe or if they purchase goods/services which are ‘reasonable’ in their circumstances
The DWP interpret ‘reasonable’ in each individual circumstance, so a judge could also come to the same conclusion?
Thank you for responding.
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Could the courts not also come to the same conclusion that it was not “reasonable” though?
The information I have seen says ’ the deprivation rule does not apply if the claimant reduces or pays a debt which they owe or if they purchase goods/services which are ‘reasonable’ in their circumstances
The DWP interpret ‘reasonable’ in each individual circumstance, so a judge could also come to the same conclusion?
Thank you for responding.
‘Reasonable’ only applies to purchases. Paying off a debt is always fine, whether reasonable or not. (For UC at least.)
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Could the courts not also come to the same conclusion that it was not “reasonable” though?
The information I have seen says ’ the deprivation rule does not apply if the claimant reduces or pays a debt which they owe or if they purchase goods/services which are ‘reasonable’ in their circumstances
The DWP interpret ‘reasonable’ in each individual circumstance, so a judge could also come to the same conclusion?
Thank you for responding.
As Charles says that only applies to purchases. If you look at Reg 50(2) in its entirety you’ll see the subtle difference:
(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a)reducing or paying a debt owed by the person; or
(b)purchasing goods or services if the expenditure was reasonable in the circumstances of the person’s case.
It’s quite clear the legal position is that if you are reducing or paying a debt owed then you cannot be depriving yourself of your capital. “Reasonableness” only enters into it if you’re talking about purchasing a good or service. Therefore all the client needs to do is show the DWP (or Tribunal) that they owed the money that they were repaying. Whether they could do so via installments is not relevant.
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Could the courts not also come to the same conclusion that it was not “reasonable” though?
The information I have seen says ’ the deprivation rule does not apply if the claimant reduces or pays a debt which they owe or if they purchase goods/services which are ‘reasonable’ in their circumstances
The DWP interpret ‘reasonable’ in each individual circumstance, so a judge could also come to the same conclusion?
Thank you for responding.
As Charles says that only applies to purchases. If you look at Reg 50(2) in its entirety you’ll see the subtle difference:
(2) A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a)reducing or paying a debt owed by the person; or
(b)purchasing goods or services if the expenditure was reasonable in the circumstances of the person’s case.
It’s quite clear the legal position is that if you are reducing or paying a debt owed then you cannot be depriving yourself of your capital. “Reasonableness” only enters into it if you’re talking about purchasing a good or service. Therefore all the client needs to do is show the DWP (or Tribunal) that they owed the money that they were repaying. Whether they could do so via installments is not relevant.
Brilliant thank you!
All he has to do is satisfy DWP (or a Tribunal) that the debt existed. UC Reg 50(2) says:
A person is not to be treated as depriving themselves of capital if the person disposes of it for the purposes of—
(a) reducing or paying a debt owed by the person;
It doesn’t matter whether he could have repaid by instalments over a longer period, if he was paying a debt it is not deprivation of capital.
The only way the appeal could not succeed would be if the Tribunal does not believe that he really owed the money.
Could the courts not also come to the same conclusion that it was not “reasonable” though?
The information I have seen says ’ the deprivation rule does not apply if the claimant reduces or pays a debt which they owe or if they purchase goods/services which are ‘reasonable’ in their circumstances
The DWP interpret ‘reasonable’ in each individual circumstance, so a judge could also come to the same conclusion?
Thank you for responding.
‘Reasonable’ only applies to purchases. Paying off a debt is always fine, whether reasonable or not. (For UC at least.)
Great thank you so much