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UC, notional capital and experience of success when paying back debts to relatives

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Welfare benefits - Disability Law Service, London

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Joined: 29 July 2019


I was wondering if anyone has examples of where their clients told Universal Credit they had spent their capital (over £16k) on repaying debts to their relatives and UC accepted this, paid them Universal Credit and didn’t say they had notional capital?

My client has borrowed a lot of money from family over the years to pay for care, but often this was cash only so there is a limited paper trail and no official debt agreement written down etc. He is going to sell his house and move in with his mum, and use the money received from the sale of the house to pay for disability adaptations and repaying his debts to his family. He then potentially wants to claim UC to top up his PIP and cbESA.

If anyone has seen their clients claim UC successfully in a similar scenario, what evidence did your client provide?


[ Edited: 19 Jul 2022 at 10:16 am by Darren ]
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Debt Advice + Community Money Advice Launceston

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Hi Bez,
Firstly a verbal agreement is legally binding.
Secondly your client will probably have an interview with the Compliance Team as opposed to Fraud ( CFIS ). The parameters they use for deprivation of capital are here.

Deprivation of capital
The law
H1796 People are not treated as having capital of which they have deprived themselves if
1.  it reduces or pays a debt owed by the person

Have people deprived themselves of capital for the
purpose of getting UC or more UC
Onus of proof
H1825 DMs have to show the claimant’s or partner’s purpose was to get UC or more
benefit if they decide claimants or partners have deprived themselves of capital. the onus of proof is on the DWP. Hopefully the relatives will confirm his statement.

Peter Turville
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Welfare rights worker - Oxford Community Work Agency

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on a practical note - if your client was paying for care to a care provider presumably there is a potential paper trail for those payments even if none for the payments received from family to make them? What income did your client have while paying for care? If there is a paper trail of care charges and of receipt of benefits / other low income then it might add some credibility to an argument that care was paid for as described. Equally, can the relatives show regular withdrawals from their own accounts that equate to the care charge? The absence of a paper trail of your clients prior income, care charges, capital etc is likely to reduce the credibility of your clients case against a future deprivation of capital etc decision.