Diminishing capital rule, for more than one benefit overpayment

Client had excess capital for several years, received o/p decisions for HB, CTB, and IS.

When applying the diminishing capital rules to the overpaid amount, is each of the 3 benefits treated seperately, using the full starting capital amount each time? This isn’t anything to do with notional capital, it’s about the interaction of HB reg 103, CTB reg 88, and SI 664/1988, reg 14.

So for e.g.:

- I have £26K throughout an o/p period. If I had not been getting my £100pw HB, then paying my rent would have dropped me to £16K after 100 weeks, so they should cease to count excess capital against me after that point in the HB o/p period.

- Same time period, I should have been paying £20pw C Tax. This would have taken 500 weeks to deplete my excess £10K capital, so it’s only 500 weeks into the o/p period that I no longer count as having £16K+ for CTB purposes.

- And similar for IS ...

Is this right, or do we add up the amounts in some way?

logic suggests that the capital should diminish by the total amount of benefits (of all types) the person would have claimed but for the capital, as otherwise the capital is double counted and the person remains unable to qualify for benefits for a longer period than would otherwise have been the case.

work it through on that basis and see what happens, and you should see that that is right.

whether the relevant authorities will see it that way is another matter (logic not being their strong suit) and you should, i would have thought, be ensuring that as and when any appeal gets to tribunal all are taken together.

Reducing an O/P by diminishing capital is very different to diminishing notional capital.  See CH/0314/2007 each O/P has its own calculations and you cannot reduce the capital by both the CTB and HB overpayments at the same time.

Thank you. (I had suspected logic and fairness might not be the way to go ..)

For future ref, the decision is at http://www.rightsnet.org.uk/pdfs/CH_0314_2007.doc
The crux is para 12:

Although I have some sympathy with the claimant in his view that the result is otherwise unfair, it seems to me that the regulations simply do not permit the HB and CTB calculations to be combined in the way he seeks.  The steps in the recoverable overpayment calculation are set out in each of regulations 103 and 89 and each concludes with the words:
‘Capital shall not be treated as reduced … in any circumstances other than those for which paragraph (1) provides.’

Incidentally, when seacrhing for the above decision, google came up with a spreadsheet on Neil Bateman’s site which looks to calculate diminishing capital, which could be handy. I haven’t played around with it, but I don’t see why it would be out of date:
http://www.neilbateman.co.uk/letters.html (7th from bottom in the list)