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Deprivation of Capital?

Caley

I'm new here and wondered if anyone had any idea about what is and isn't regarded as deprivation of capital for means tested benefits.

Me and hubby are both disabled, get PIP at standard rate daily living and mobility, plus income support which includes disability premiums, housing benefit, council tax reduction and child benefit/child tax credit for our 17 year old who's at 6th form college.

A relative recently passed away and I've been told that I am due to inherit about £40k once her affairs are sorted out, which could take a few months.

I'm familiar with capital limits for means tested benefits (I used to work in benefits advice but it was quite a few years ago now), so I know that will take us way over the £16k limit and we would lose all our means tested benefit. If that were to happen, I know once the capital had fallen below the limits, we'd have to go on UC which doesn't include the disability premiums IS does so we will end up massively worse off.

However, we are wanting to spend quite a big chunk of the money on items that we need to improve our quality of life related to our disabilities, and wondered if this may be seen as an acceptable use of the money by the DWP.

We live in a rural area, no public transport so to speak of, and hubby and I have always had a vehicle each (we have a teen at home who relies on us to take him everywhere plus 2 adult kids who live quite a distance away, one with mental health problems who has crises from time to time and another at uni who has autism/mental health issues who has had crises in the past), so having a vehicle each is a necessity rather than a luxury, as if one of us had to leave at short notice to support either of the kids during a crisis, it would leave the other stuck at home indefinitely with no means of going anywhere, which would also confine our 17 year old who wouldn't be able to go anywhere either.

At the moment we have a 14 year old Zafira which is gradually costing more to maintain and get through it's MOT, plus a wheelchair accessible van which is now 10 years old and is slightly too small to fit our 2 mobility scooters in without having to actually get in and manhandle one of them to rotate it enough to leave room to get the other one in, which for 2 people with arthritis and chronic pain is quite difficult as the scooters are big, heavy road scooters. The scooters were bought 2nd hand about 3 years ago and have cost us a fortune in replacement batteries and one has pretty worn tyres which we've discovered will also cost a fortune to replace. The car needs to be an MPV or similar because when I'm out and about on my own, I have a folding mobility scooter so any replacement car needs to be big enough to fit and for me to be able to get it in and out easily.

What we're thinking of doing is using about £30k if the money to replace the car for a much newer one of an equivalent size, upgrading the van for a bigger, newer wheelchair accessible van using our old one as a trade-in and getting 2 new mobility scooters with a decent warranty on them, so we can hopefully avoid expensive repair and maintenance costs for the foreseeable future and which should hopefully last us for a good few years. We could also do with a couple of new recliner chairs, as our existing ones are a few years old definitely past their best.

We're set to see a huge drop in income next year when the youngest leaves 6th form college and we lose his child tax credit/child benefit, so using this once-in-a-lifetime opportunity to buy the things we need to have some decent quality of life seems to be the obvious thing to do, as paying out to maintain old vehicles and scooters will become way more difficult once we're at least £85 a week worse off. We're not planning on expensive holidays, high-end gadgets or even high-end prestige vehicles, just something much newer, more reliable and better meets our needs, but I'm a bit concerned that the DWP might see this as deprivation of capital, even though we'd obviously have receipts for everything that we could show them to prove where it's gone.

Has anyone been through a similar experience or has any knowledge about this?
Thanks

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Caley

Thanks for your insight. The answer is that if we got this money and weren't on benefits we would still do the same, because without having the things we need to help with our mobility needs, we can't go anywhere or do anything we want to do anyway.
The only thing we might do differently if we weren't on benefits is maybe a more expensive holiday than our normal budget self-catering UK break, but that's not really a priority and is something we can easily live without. That money would be better kept safely on one side (even if it attracts a tariff income) for an emergency fund should we have any sudden expenses like appliance breakdowns or repairs which, on benefits, we might struggle to pay for.

Caley

Thanks, yes I plan to contact them nearer the time when I have more idea about when the estate will be sorted, just to ask if they can advise me on what might be acceptable or not acceptable, though I must say any time I've tried to ask for any advice before, I'd have got more straight answers from my dog!
If we were going from one car to two, I could understand them questioning it but because we've always had 2 vehicles and live rural where there's no public transport, I would hope that would be enough to satisfy them though I will try to ask them for clarification on that.

Caley

Thanks, and yes you're right, getting any sense or concrete advice out of the DWP will be very difficult as I know from past experience. I've looked at DWP Decision Makers Guide which is, as you would expect, pretty vague but does say if people let them know what they plan to spend the capital on and then spend it as they said they would, then that is looked at more favourably than, for example, saying you're buying essential items and then splurging on a world cruise or something extravagant. I'll obviously have to let them know nearer the time once I know when I might be receiving it as I know not telling them in advance will get me into serious trouble, but I've found a couple of solicitors who specialise in welfare benefits who I've emailed to see if they can help. I don't mind paying for an hour's consultation if they can give me a better idea if it avoids getting into trouble later.

Caley

Thanks for your input. You're spot on about DWP not knowing what they're talking about. I came across them giving incorrect information and advice and a shocking lack of knowledge from them quite regularly when I worked in advice in the voluntary sector years ago and I'm sure that won't have got any better. I also think there's a very good chance they would tell you something and then potentially go back on it because either it suits them or they gave you the wrong info in the first place.
With the capital issue, I'm kind of going on a similar experience I had a few years ago when I got a lump sum from a court settlement from my ex husband (which is how we managed to buy the van in the first place). At the time I had some very good advice from a specialist benefit advisor (in an organisation that no longer exists thanks to funding cuts), who suggested I tell them in advance I'd be getting a lump sum before I actually received it, telling them what I intended to spend it on, but said that as long as I informed them of the change of circumstances within a month of actually receiving it and kept proof of what it had been spent on (ie, that I'd used it for what I'd told them in advance I would be using it for) I should be ok as we were planning on buying something to meet our mobility needs rather than deliberately giving it away/trying to hide it/using it for extravagant stuff like expensive holidays and high-end electronic gadgets.
It actually worked out fine, I did ring them in advance as the advisor suggested, to say we'd be getting this money at some point in the near future, they were as expected absolutely useless at giving me an answer as to whether our spending on a wheelchair accessible vehicle would be acceptable, but I phoned them back once we'd got the money and bought the van, they did suspend our IS for a couple of weeks while they looked at our bank statements, the court order, receipts of what we'd bought etc and accepted it as a justifiable use of our money. We did have a tariff income for a bit because we were between the lower and upper limit which was fair enough till it went down below the £6k.
That's a few years ago now so I was just wondering if things had changed, presumably made stricter, since then, which was why I was thinking of just running it past a specialist welfare benefits solicitor seeing as though I've been able to find absolutely no advice organisations who can help with anything of that specialist level. I know our local CAB has lost pretty much all it's funding so presumably it's the same everywhere.
I see what you're saying about the significant operative purpose which I know plays a major role in their decision making, but I have no idea how you can actually prove that. There's no way we could claim we didn't know the capital limits as we've been in this situation before so I wouldn't even try to do that as I'd be lying. As I said before, these are things we'd be buying if we weren't on benefits as we'd still need them regardless of what our income was, but how do you go about proving that to them?

Caley

Thanks for your responses, you've given me some really useful info and makes me feel less worried knowing it's on them to prove SOP. I suppose we should prepare ourselves for a challenge and if it goes through no problem that's an added bonus.

BTH

Have you considered a D.P.T a disabled persons trust fund. As far as I'm aware the trust is not taken into account as capital. You can then ask the trustees for the cash for your vehicles or anything else you may require.

poppy123456

BTH said:

Have you considered a D.P.T a disabled persons trust fund. As far as I'm aware the trust is not taken into account as capital. You can then ask the trustees for the cash for your vehicles or anything else you may require.

You've commented on a thread that's 3 years old and the member hasn't been active for more than 2 years.

With regards to the Disabled persons trust. This would all need to be set up before someone passes away and information would need to be included in their Will. Setting this up after you've received any inheritance, will likely been treated as deprivation of capital and you'll still be treated as having that money.

BTH

Oh thanks! Yes wise words

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