HB tribunal capital issue

it’s Monday morning and i’m sorry to give everybody a headache.
Got a client who has been to an HB tribunal but it was adjourned as no presenting officer from the council and the judge felt the client should get further advice as well.
Client sold her house back in 2010 and received £68,000.
She started renting a bungalow privately and has spent various amounts on things such as new internal doors, kitchen cupboard doors, new garage door and putting in a fireplace.  Client has also been on a few holidays and spent money on Christmas and birthday presents. The rent is £400 per month and she’s paid full council tax etc but she now only has about £3000 left.
Council are saying she has £20000 left.
Client has also been receiving her State Pension and a private Pension, approx £190 per week.
I’m struggling to come up with a valid argument as to how she has spent the money.
Any suggestions gratefully accepted.

What’s the basis of the LA calculation?

Hi Gareth, the LA requested receipts for purchases from client and she has given them all she had as well as bank statements. They have based it all on that info

Do the bank statements show the reduction to £3,000?
Are they saying that any expenditure was unreasonable?

Was increasing her benefit entitlement a significant motive in spending the money? Was she aware of the capital limit?

You will need to review the submissions of the LA.
LA have alot of criteria to prove ‘notional capital’

Although £68,000 may sound like a scary figure, you will have to factor clients circumstances, lifestyle, general expenses, bills etc. 

Running some hypothetical calculations, based on her having £3k left, the figures do not seem so far fetched.

Hypothetically, if since 2010, you equate that to 42 months (3 1/2 yrs) than the following figures MAY be relevant:-

Rent = 42x400 = £16,800
CTAX = 42x100 = £4,200
      = £21,000

£68,000 - £21,000 = £47,000

***client claims to have £3,000

£47,000 - £3,000 = £44,000

*** weekly income £190

£190 x 42 = £7,980

£44,000 + £7980 = £51,980

£51,980 / 42 = £1237 per month

£1,237 to run a household per month (excluding rent and ctax) is not wholly unreasonable factoring utilities, foods, maintenance, travel, family life etc

**Points to consider***

1. Doing decorating, going on trips and spending is not banned unless done with the intent to secure benefit;

2. Obviously you will have to look at her actual expenses and bank accounts to determine intention;

3. She receives private and state pension and owned a property - was she aware of capital limits, has she ever claimed benefits, if not than the she may not be entirely familiar with all the benefit rules;

4. Look at her pre-sale lifestyle - her reasonable expenses pre-sale and post sale.  Has she intentionally been lavish?

Potentially a lot of work - good luck

looks from your post that LA are not claiming Notional Capital but that your client actually has £20,000 in capital.

If this is correct then issues such as motivation in spending the money is not really relevant it is a simple (as much as these things ever are) finding of fact.

if the client was fully aware of the capital limit rules, then why has she waited until she only has £3000 left? this doesnt suggest the action of someone trying to take advantage of the system, if they were they would more likely of made a claim for HB when their capital dipped below £16000

also, watch out for councils insisting on receipts to accept that a client has spent money. not keeping receipts doesnt prove anything and for many purchase particularly for redecorating and small purchases, even larger ones like carpets, why would they? (i dont) although maybe debits from their bank a/c might prove the purchases were made

as already stated, councils sometimes get bogged down on what the money was spent on and the client proving purchases. the real point is the intention behind the money being spent / used. did they do so with the purpose of gaining entitlement of HB? were they aware of the rues regarding capital limits etc?