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Deprivation of capital and IR ESA
Client who is being treated as having notional capital of £20000, actual capital accepted as zero. No income whatsoever. ESA(SG). DWP are not even attempting to justify how they have arrived at the conclusion this was a deliberate deprivation. The case has been escalated but this only brought the reply that they don’t have to justify it “because it is obvious”. Genuine client who had no idea of the capital rules and happy to attend an interview or anything else they want to explain herself face-to-face (the two 3 page letters I have sent aren’t enough apparently) but they are just not entertaining it. When they refuse to follow the law, what recourse do we have when all I can get is an escalation number that puts me through to someone as ignorant to the law as the last. I need something that can be done quickly not a long drawn out complaint or anything like that as the client is without funds completely and they are at breaking point - it’s been going on since October last year and I really don’t know how much longer they can go on like this. Telling the DWP this also had no effect. Any help gratefully received.
Your client is entitled to request mandatory reconsideration of either (or both) the decision to terminate his award or refuse his new claim. Or have you already done that and the problem is delay in dealing with an MR? In which case you would be looking at a complaint, MP involvement or a threat of JR.
Another option would be to claim UC - the UC Regulations are very specific that a claimant can only be treated as having deprived himself of capital if he has done so “for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.”
Even on the DWP hypothesis that your client has deprived himself of capital, he hasn’t done so to secure an entitlement to UC (which he was probably entirely unaware existed when the alleged deprivation took place).
Thank you for that. I had considered the UC option but dismissed it as there I think a PIP award is likely if I can convince the client to claim - so much for wanting to take advantage of the benefit system. She would get an SDP so i discounted claiming UC for now. I have done the MR, they have come back with a reply which is not an MRN just a request for further information - namely receipts for cash spends which have been provided a month ago, they are saying they do not have these and asking for them to be sent again recorded delivery which is absolutely fine but still means the client won’t get any resolution in the near future, even if it is a MRN and we can submit the appeal. I feel that they are simply not following the law - they have made no comment on the deliberate deprivation other than the brief one about it being obvious during a phone call.
Hard to comment without knowing the circumstances of the disposal but a few things which may assist albeit maybe not in this instance and at this stage.
1) As regards guaranteeing things get where they ought and rapidly I still find using the .(JavaScript must be enabled to view this email address) is 100% effective. Absolutely not acceptable to ask for something to be sent recorded. Recorded post in this context is meaningless. Who would be signing and what would it prove?
2) Heard of someone the other day taking a standard line with DWP where you have a record of postage. Asking them in every case as to whether they have reported their loss of important data to the ICO. Weirdly seems to encourage a scramble which more often than not either produces the missing documentation or a decision that it might be easier to back down. I’ve never used recorded or special delivery as in the context of mail delivery centres being run by private companies then signing can be done by a privately employed security guard and you still have no proof it’s been received by DWP as that’s a process further down the line.
3) No legal requirement to provide receipts and often nothing to the point when the only point is the significant operative purpose of the disposal.
Thank you for your reply, that is useful to know regarding the mail - when I said there wasn’t DWP staff at Wolverhampton to sign for mail so what would be the point I was told that there are people who can sign for things. Doesn’t help much if they are not DWP staff though. Surely the details of the disposal, although provided to DWP, is not important unless they show it was with the intent to claim or gain more benefits? My understanding is that it is not what you do with your money, it’s the intention behind it that is important.
I had considered the UC option but dismissed it as there I think a PIP award is likely if I can convince the client to claim - so much for wanting to take advantage of the benefit system. She would get an SDP so i discounted claiming UC for now.
I mean I think it is a rather risky strategy to hold out for the SDP when your client has no income at all, ESA has been refused and PIP has not even been claimed yet. I think you may want to have a discussion with her about the pros and cons of claiming UC.
Your client is entitled to request mandatory reconsideration of either (or both) the decision to terminate his award or refuse his new claim. Or have you already done that and the problem is delay in dealing with an MR? In which case you would be looking at a complaint, MP involvement or a threat of JR.
Another option would be to claim UC - the UC Regulations are very specific that a claimant can only be treated as having deprived himself of capital if he has done so “for the purpose of securing entitlement to universal credit or to an increased amount of universal credit.”
Even on the DWP hypothesis that your client has deprived himself of capital, he hasn’t done so to secure an entitlement to UC (which he was probably entirely unaware existed when the alleged deprivation took place).
I’d be cautious about this.
It is exactly what the regs state and the Sweet and Maxwell commentary does say ‘it may be arguable…’ (though more accurately, ‘it may be arguable depending on the exact circumstances…’).
Potential problems? Knowledge of Universal Credit, its introduction and the fact that it will replace all means-tested benefits has been in the public domain for some considerable time. Awareness of that last factor - that UC will replace IS/ESA/JSA/WTC/CTC/HB - could potentially mean that an act of deliberate deprivation was simultaneously for the purposes of increasing or securing current entitlement to ESA and future entitlement to UC. At least, were I the DM, it’s what I’d be trying to argue.
Of course, it would be necessary to fix the claimant with the knowledge, at the time of the deprivation, that ESA would be replaced by UC, in the same way it would be necessary to fix them with knowledge of the capital limits. - something which might be difficult, but not necessarily impossible, for someone who knows what they are about(IOC: “do you watch the news/read the papers Mr Smith…..).
Not saying Elliot’s wrong - it may well be the best way to proceed, but I’d want all my ducks in a line before going down that route…...
I think ducks in a line is the issue here.
For what it’s worth I have come across a high number of people who have no knowledge of UC at all though. I don’t find this especially surprising or lacking in credibility. If we start from the position of knowing that a significant number of people of working age have limited digital knowledge and then look at those who have struggled with all aspect of the UC process it shouldn’t really be a surprise. Add in those who are digitally excluded and you’ve a relatively straightforward argument. That said, I agree with past caring. You can almost hear them having the UC thought so you may as well be prepared for it.
Thank you for all replies. I’m not holding out for SDP, I was also concerned that a UC claim would fail on the same basis - after all what we are talking about is UC making a decision based on the law and the available evidence, something I can’t convince ESA to do so what would be the chances of successfully arguing no deliberate deprivation under UC? There is also the issue that HB are paying the rent just now and if UC take the view that ESA are taking then it’s not just her living costs she is missing out on but housing costs as well and the consequences of that are clear.
I think we’d need to know the circs. of the disposal in order to add anything to the discussion.
There’s nothing more to it than they spent the money, household and personal items mostly, no large purchases, no gifts, nothing more than someone who has never had any money having a windfall and spending it on whatever they fancied.
Yes, but we (and you if the clients haven’t yet told you) need more information to properly assess the case.
1. When exactly did they receive the money?
2. Over what length of time did they dispose of it?
3. As this is a notional capital decision, as opposed to an actual capital decision or overpayment decision, it’s presumably the case that they were not in receipt of benefit at the time of receiving the capital or in the period that they disposed of it - is that correct?
4. If that is correct then it would be useful to know what other sources of income there were during the relevant period.
There’ll doubtless be more, but that’s enough to be going on with….
The money was received in Sept/Oct 2017, spent over a year, they were getting ESA when they received the money, it was reported immediately so no ESA throughout the period, there were no other sources of income during the relevant period. The difficulty I am having is specifically around the motive argument in that the DWP are not making one, maybe I am misunderstanding something but I didn’t think the details are important if I am just asking about tactics to get the DWP to follow the law. The rule of diminishing notional capital has been applied.
Despite not having full facts and background I’d venture that…
It does sound on the face of it that DWP have a case. “because it is obvious” works as it follows the scenario that the required disclosure was made at the relevant time.
“The money was received in Sept/Oct 2017, spent over a year, they were getting ESA when they received the money, it was reported immediately so no ESA throughout the period..”
If the case is as described then you wouldn’t want to rely on a statement of having ‘...no idea of the capital rules.’
There seems to be either ‘some idea’ or ‘no idea of the implications of spending the money.’
The motive argument.
As there was a claim before and after the capital then I’m not so sure that it’s a reasonable stance to say the DWP must provide a ‘motive’ for spending the money. There’s a further claim for financial assistance..
Maybe the circumstances indicate that it was ‘wanton and reckless’ to dispose of the money but was it deliberate? Did someone other than the claimant spend the money? If it was the claimant were health conditions a factor?
8. The tribunal was correct that the legal test was whether the claimant had a significant operative purpose to secure entitlement to housing benefit. In order to have that purpose, she needed to know something about the significance of the amount of her capital to an award of housing benefit. The extent of the knowledge that is necessary will depend on the circumstances of the case. In deciding what level of knowledge is necessary, it is necessary to understand why knowledge is important. The reason is this. The only direct evidence will be the claimant’s own evidence of the purpose for which the capital was expended. And that evidence will usually be that the purpose was unrelated to entitlement to benefit. If the tribunal does not accept the claimant’s evidence, it can only find that that the claimant had the necessary purpose by inference. The fact that it does not believe the explanation put forward is some, although not necessarily conclusive, support for the purpose being related to the securing of entitlement to benefit. But it is impossible to infer that a claimant disposed of capital for a particular purpose if the claimant did not know that the amount of capital could affect entitlement to benefit. they want to explain herself face-to-face
CH/0264/2006
see para 7….. CIS/124/90 shows clearly that while the appellant is saying that she did not know the rules she did not make any enquiry although given her background in care and the length of time she had been claiming benefit the tribunal found as on the balance of probabilities it was unlikely the appellant would not know the benefit rules and it follows she would know the effect of her capital on her benefits.
CE/729/2018
The face to face you’re asking for is really the FTT
The money was received in Sept/Oct 2017, spent over a year, they were getting ESA when they received the money, it was reported immediately so no ESA throughout the period, there were no other sources of income during the relevant period. The difficulty I am having is specifically around the motive argument in that the DWP are not making one, maybe I am misunderstanding something but I didn’t think the details are important if I am just asking about tactics to get the DWP to follow the law. The rule of diminishing notional capital has been applied.
You started off by saying that the client had no idea of the capital rules. This is going to be difficult to sustain;
1. They are getting ESA when they receive the capital.
2. They report receipt of the capital and ESA stops - because of actual capital.
3. Even assuming that up to this point they are entirely unaware of the capital rules, it is completely reasonable to assume they would have sought advice as to why their benefit had stopped - and been told the answer. Even if that were just in a phone call to the DWP.
Are you really saying that benefit stopped after they reported receipt of the capital and that they made no enquiries whatsoever as to why? And if that is the position, I think you’re going to need to be able to offer a credible explanation as to why not.
I’m also struggling a little bit to reconcile the sum of notional capital the DWP is saying is possessed (£20,000) with the fact that you say the diminishing notional capital rules have been applied. If that is the case, then weekly ESA would have been (I think) £174.15 - which is ESA couple rate, plus the support component and EDP. Multiplied by 52 = £9061. So notional capital should have been reduced by that amount (or whatever the correct weekly figure was, plus any HB they did not receive in consequence of the capital) But perhaps the problem is that I wrongly assumed that they had received £20,000 in capital, when in fact the figure was greater?
So - how much capital did they actually receive? What the capital figure after they received it (i.e. did they have some capital already?). And what was weekly their benefit entitlement before it stopped?
And as John says - the way to get the DWP to apply the law is MR and appeal.
The money was received in Sept/Oct 2017, spent over a year, they were getting ESA when they received the money, it was reported immediately so no ESA throughout the period, there were no other sources of income during the relevant period. The difficulty I am having is specifically around the motive argument in that the DWP are not making one, maybe I am misunderstanding something but I didn’t think the details are important if I am just asking about tactics to get the DWP to follow the law. The rule of diminishing notional capital has been applied.
so if i understand this correctly:
1. pre September 2017, client on ESA income based
2. September ish 2017 client came into £20K
3. client reported that fact to ESA
3. ESA therefore stopped because £20K took her over the capital limit
4. client therefore used the £20K to live on
5. she’s entitled to use it to live on - at ESA rate at least - until she goes below the capital limit
So the question then becomes
a. at what point did she dip below the capital limit
b. at what point then did she reapply for ESA /ask for it to be put back into payment
and, therefore, why do ESA think she’s spent money to get benefits, rather than to live on?
are they saying she should have lived on fresh air and still have the money?
or what?
and is it, in fact, the case, that if you spend your money at slightly more than the rate you would have been able to otherwise, they’ll hold that against you? surely not.