IS overpayment for failing to disclose

I have a case where a client has an IS overpayment for failing to disclose.
Basiclly she claimed IS as a lone parent but had power of attorny for her brother and cared for her father, so their monies/benefits were paid in to her account and she paid all their bills. Although the monies were paid in to her account by brother/father they are saying that my client used some of the money for herself..and has ended up with an £8k overpayment. Was looking for any decisions relating to this area.

regards

Is the DWP’s decision that the monies are/were capital, or is the decision that the monies are/were income?

Taking in to account expences incurred by father/brother, the DWP are assessing my client has an income of £350 pw over a 16 month period. i.e over £2k was deposited in my clients account on average every month yet only a percentage of this appears to have been used for father/brother

Income Support is not my main area of knowledge and so others may be able to offer more and/or correct anything I’ve overlooked.

Unless there is more to this than meets the eye, I’m struggling to see how the DWP could possibly have come to the decision that the monies should be taken into account.

1)  It seems to be open to argument that the monies are, and never were, those of your client, whether as capital or income.

2)  Even if “1” is wrong, it would seem to be arguable that the monies constitute “voluntary payments” and are therefore disregardable in their entirety - see para 15 of Sch 9 to the Income Support (General) Regulations 1987.

3)  If the monies are considered not to have been payable at regular intervals, the monies count as capital, not income - see reg 48(9) of the same regulations.  If capital, it is still open to argument your client is not the beneficial owner of that capital.

In short, at least on the face of it, an appeal should be successful.

-Edited to add-  If the monies did/do not affect entitlement to benefit, the clmt was under no legal obligation to notify the DWP of any related changes in circumstances.

It would have made sense to keep the ‘other’ money in a seperate accounts, to state the obvious.

In the circumstances described it will depend on the facts of the case.

If the money was not being used in its entirety for the two claimants and three income streams allowed to pool together in the one account on the balance of probabilities it may be very difficult to show that the appointee can say what amounts of money belongs to whom.

The longer the situation has gone on the more difficult it would be to show who is the beneficiary of what.

The spending habits would also be a matter for concern.

A forensic accountant would have the expertise I should imagine.

Surely the approach should be that all the money relating to the father & brother was theirs & not the client’s.  The client has a duty to them under the power of attorney to use their money for them & in their interests.

If she is failing to do so then the correct action would presumably be for the father or brother or any other interested party to raise an issue with the Public Guardianship Office, which should then investigate the client’s dealings with the money.

Until/unless that has been done I do not see how DWP can determine that any of the money is the client’s unless the client has admitted using it for her own purposes or there is crystal clear evidence that she has done so.

Just a thought but does the same office pay the client’s benefit and the father/brother’s? If so then DWP were already aware of the fact and client cannot have failed to disclose something they already knew. This may be an argument to challenge recoverability of the overpayment.
As noted above client should open separate accounts for the brother and father’s money - and quickly.

Did she actually use any of the money for herself? Can she account for all money coming in and going out?

As a matter of law any money held by her as an attorney can only be used by her for her own benefit with the full agreement of the principal - the person whose attorney she is.  It is exactly analogous with her holding it as a trustee and she is subject to the same fiduciary duty not to exploit her position as a trustee is. If she is acting in breach of that duty - taking it without authority - it no more makes it hers than stolen property belongs to the thief.

Appointees are expected to open separate accounts for the claimant’s money, and she should have done so here - one for each person for whom she is an attorney or there are further horrendous complications. She needs to be aware that she has to repay any money that is not hers.

I once was involved in a tribunal where two people used a common bank account (mother and daughter) and part of the issue was about whose money was which. The case turned on the equitable doctrine of “tracing”, a system of working out how payments in and out of a mixed fund are to be atrributed. There are different rules for tracing where there is and isn’t a fiduciary relationship between the people concerned. The concept of a fiduciary mixing her own money with that of two different people to whom she stands in a fiduciary relationship makes me come over all faint, and would make the sort of question in an equity exam for law students that they would carefully avoid.