Housing Benefit and Deprivation of Capital

Morning

I have a case of an elderly gentleman who has been turned down for HB.  He previously had capital of approx £30k but has spent this in the last 2 years.  He has been very generous with his family, helping them out financially and taking them on holiday.  He gets HRAA and has lots of problems with his memory so so struggles to even remember what he spent it on.

He made a claim for HB recently and was refused, reason given, ‘he should have spent his capital on paying his rent’.

We appealed and argued that there was no intention to deprive himself of capital in order to claim benefits.  Appeal was refused at LA and sub has been issued for Tribunal.  In it they have made no reference to his intention only the fact that he should have spent the money on his rent. 

My question is, am I missing something here?  Surely they have made mention of the his intention since that is the relevant point.  It seems too obvious for them to have not considered?

Thanks for any help

Sounds like another LA trying it on here . I believe that the onus of proof is on them with regard to him disposing of such capital with the sole intent of claiming housing benefit as a result of reducing the capital.

This is partly what I am unsure about, is the onus on them or claimant?

Generally, as a matter of law, the burden of proof always falls on he who makes the allegation.  However, more caution needs to be taken in inquisitorial proceedings that in adversarial ones, as more than one commissioner has warned.  This is largely because the test is the balance of probabilities rather than beyond reasonable doubt. This makes it easier to shift the burden of proof back to the claimant once the LA produces some evidence to back up its allegation.  In other words, the claimant has to be more active.  It is not enough for him to just sit on his hands as it were and say “go on then, prove it”, while simply issuing blanket denials.

benefitsadviser - 21 March 2012 12:00 PM

I believe that the onus of proof is on them with regard to him disposing of such capital with the sole intent of claiming housing benefit as a result of reducing the capital.

I respectfully disagree on that specific point.  In R(SB) 38/85, it was found that if the the evidence in the first instance showed a clmt has, or had, capital, the onus then fell on the clmt to show firstly s/he was no longer in possession of the capital and, if spent, how it was spent and the motives behind the expenditure.  In broad terms, this principle has been followed ever since.

However, on a more optimistic note, the LA can’t simply refuse on the basis that monies should have been used for a particular purpose.  What matters is whether the expenditure was with “a significant operative purpose” to obtain or increase benefit.  That test has also been around for years.  If the LA hasn’t addressed that principle, that leaves open a slam-dunk ground of appeal.

What about expenditure without regard to the future?  There is conflicting case law on the principle of whether a “forseeable consequence” of spending money would lead to reliance on social security benefits.  In CIS/0030/1993 (starred as 81/94), Cmmr Mesher found that a foreseeable consequence was NOT sufficient to amount to deprivation - para 38.  However, in all other case law that I am aware of, the opposite has been found:

CH/1822/2006 (heard with CIS/1757/2006) - upheld in “Hook”.
CIS/0816/1995
CH/1261/2007
CJSA/1425/2004

I have a potentially controversial view on the tests Cmmrs and UTJs have been applying over the years and it essentially means arguing that the majority of authorities are wrongly decided.  It goes something like this:

1)  The correct test for deprivation should be that expenditure is with the DOMINANT purpose of obtaining / increasing benefit; the test of “a significant operative purpose” being wrongly imported into the law.  Contrast the wording of HBR 9(1)(l) for “contrivance” cases where case law has made the test for this as being “the dominant purpose”.  There is no logical reason why one should be subject to a test of being the “DOMINANT purpose” and the other being subject to meerely “a significant operative purpose.  The wording of HBR 49(1) refers to “THE purpose” and to import further arbitrary tests is unlawful.

2)  The case law supporting a “foreseeable consequence” as being in itself a sufficient basis for a finding of deprivation is fundamentally flawed and is hence also wrongly decided.  If at the time of expenditure, the clmt (or partner) did not deprive themselves of capital for the purpose of securing benefit entitlement, any “foreseeable consequence” is an imported test not supported by the wording of the legislation and, therefore, CIS/0030/1993 should be followed on this point.

3)  If the government had wanted such imported tests, it would have been easy for the legislation to have been worded accordingly.

References to HB regs are for the “working age” version.

Whether you choose to argue it is obvously your call.

If the local authority are assuming notional capital, it’s always worthwhile checking that they have applied the Diminishing notional capital rule when they’ve done their calculations and made their decisions, particularly if the money has been spent over several years. From experience in the past, LA’s can sometimes be very keen to treat as depreviation of capital and apply notional capital in the calculation but often don’t apply the diminishing notional capital rule.

The HB reg in question is Regulation 50 for working age, think it’s HB regulation 48 for those over pension credit qualifying age.