Paying Off Credit Card and Intentional Deprivation of Funds

RSISolutions

I have had a zero interest credit card for about a year. However the interest rate will go up to 18.3 percent on the 16/07/2018. I would like to pay this credit card off but don't want to be accused of Intentional Deprivation of Funds. But it seems stupid not to pay the credit card off and avoid the large interest rate when I have the funds to do this in the bank. At the moment I am also under the £6000 savings limit, but some payments (not income) might come through soon to put me over this limit. 

Additionally, at the moment, I am abroad and not getting ESA. It stopped on 4/7/18.  I will make a claim for Rapid Reclaim when I return at the end of this month. 

I am totally confused as to what to do. 

wilko

Pay your credit card off then you will be better off know what money you have to spend. It shouldn't affect you getting your rightful other benefits.

April2018mom

Pay off your credit card bills. That’s the first thing you have to do upon your return. 

April2018mom

Pay off your credit card bills. That’s the first thing you have to do upon your return. 

poppy123456

If your savings are above the minimum amount allowed before they affect your benefits, (£6,000) paying off your credit card bill and then claiming a means tested benefit shortly after this, could be classed as deprivation of capital in order to obtain a means tested benefit. I'd advise you get further advice before paying that bill, unless of course the credit card company are demanding full payment, then it's not classed as deprivation of capital.

RSISolutions

Hi @Poppy123456. Yes but who do I get 'further advice' from?

BenefitsTrainingCo

Hi RSISolutions,

If you want face-to-face advice you should contact your Local Authority's Welfare Rights Team, if it has one, or the CAB or any other local agency offering benefits assistance.
The burden of proof is on the DWP to prove that you have intentionally deprived yourself of capital in order to get benefits or additional benefits. They will go on about how long you've been on benefits for, and how you are likely to know about the capital limit, and it may be that they do stop your money if you went ahead with this because they often make poor decisions in this kind of instance. The burden of proof is on them to prove your intention, not on you to prove your intention.
It is very difficult for them to prove that your primary intention is to claim additional benefits or keep your current benefits. If you main intention is to save money in interest in the future then you should be ok, but it might take having to go to a tribunal to win it.

Thanks,
Lee

mikehughescq

Some confusion here. The capital limit for means-tested ESA IS £16,000 not £6,000. That is the lower limit above which there’s a tariff income. The first question then would be whether it’s means-tested ESA you’re claiming or contributory or both? If it’s contributory then there’s no issue. If, as you imply, you’ll be taking capital which would otherwise take you above £6,000 and spending it to get you below then you make a gain but a pretty small one. The key thing then is about intent. The problem with a credit card is that first of all they’re a non-priority creditor i.e. they shout loud because there’s not much they can do compared to other creditors so there’s no compulsion to pay them anything. An interest free card even less so. Even with the interest DWP could argue that all you really needed to do was pay the interest as there would be no pressure to pay the rest. 

That said, it really comes down to knowledge and intent. If you knew the capital limits on the date of claim then DWP are halfway there. You’ve made your intent clear on a forum, which is possibly not the best move. I’ve had a case where DWP saw the claimant posting similar to yourself on Facebook. Immediately able to prove intent. 

All that said, the burden of proof is initially on DWP but is not that clear cut at the appeal stage so it’s a case of suck it and see.

RSISolutions

I am on Income based ESA