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Deprivation of Capital?

CaleyCaley Member Posts: 21 Listener
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?  


  • mikehughescqmikehughescq Member Posts: 5,998 Disability Gamechanger
    There is a very simple question to ask. Is a significant operative purpose of the disposal on order to get or retain benefit? It doesn’t have to be the main reason. Just one of them. Translated into English... if you were nowhere near the benefit system and received this money, would you spend it in exactly the same way? 

    The fact you know the benefit system and have just says publicly you are aware of the capital limits is unhelpful but ultimately the first paragraph question is all that matters.
  • CaleyCaley Member Posts: 21 Listener
    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.
  • mikehughescqmikehughescq Member Posts: 5,998 Disability Gamechanger
    There you go. You’ve answered your own question. Be prepared for DWP to challenge you once they know of the disposal. There is nothing you can do about that except be prepared for the counter argument.
  • woodbinewoodbine Community Co-Production Group Posts: 3,785 Disability Gamechanger
    I'm not sure a DM would go with the two car option, one car yes, of course just my opinion, you could always get advice from the DWP DM at the time?
    my advice is given freely and is correct to the best of my knowledge.
  • woodbinewoodbine Community Co-Production Group Posts: 3,785 Disability Gamechanger
    I'm not sure a DM would go with the two car option, one car yes, of course just my opinion, you could always get advice from the DWP DM at the time?
    my advice is given freely and is correct to the best of my knowledge.
  • CaleyCaley Member Posts: 21 Listener
    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.
  • mikehughescqmikehughescq Member Posts: 5,998 Disability Gamechanger
    edited April 16
    The one or two car question is irrelevant. DWP DMs can be very judgemental and will try and make it about such stuff but it isn’t and never has been. There is no set of reasonable or unreasonable expenditure. People ask the question in those terms as has happened here but the only issue is that of “significant operative purpose”. 

    There is literally no point in asking DWP the question. Much of their telephony is outsourced so you’re looking for expertise where there is none but, even if there was, there is not, as I’ve already stated, a list. That is not how this legislation works. If you can show someone would have acted the same way regardless or did the know the capital limits etc. then you’re home and dry.

    Also worth noting is that even if they offered such advice the principles of estoppel does not apply here. Anything said on the phone cannot bind them later i.e. they can tell you that you’re okay to spend on items x, y and z but that doesn’t stop a decision maker from deciding the exact opposite. 

    So, “significant operative purpose”. That’s the only thing at issue here.
  • CaleyCaley Member Posts: 21 Listener
    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.
  • mikehughescqmikehughescq Member Posts: 5,998 Disability Gamechanger
    edited April 16
    1 - it’s not difficult to get advice out of DWP. I’m sure they’ll happily volunteer whatever it is they think you want to hear. The point is that they lack the technical expertise to do so and anything they do say would not bind a decision maker.

    2 - the guidance is not for you and will not help you. It is guidance. They are bound to do no more than take it into account. They don’t have to follow it at all. Nowadays it is often wrong and just as often politicised. 

    3 - the guidance does no more than suggest that if you spend your money on a car than a yacht they would be more likely to believe you didn’t do it to gain or keep benefit. That’s simplistic nonsense. If you bought a yacht but had no clue what the capital limits were then how could they show you had disposed of it to gain benefit? The answer of course is that they couldn’t. Perceived extravagance is irrelevant. The only relevant issue is ‘significant operative purpose’. 

    4 - there is no legal obligation to tell DWP anything in advance. Disclosures only need to be made when changes occur which impact entitlement i.e. when you get the money and once it’s come down below the relevant capital limit.

    5 - there is no “serious trouble” here. You disclose. IS is suspended whilst they investigate but if you disclose in full and reference SOP then you can avoid even the suspension. 

    6 - what makes you think you need a solicitor? Few would have knowledge on this area and you have everything you need in this thread. There is no “better idea” to be advised on. If you would have spent the money the same way regardless then you explain the full circumstances around that and away you go. What else are you going to do? There is no choice but to disclose. It then comes down to making a full, detailed disclosure explaining the circumstances.

    Feel free to use https://advicelocal.uk/ to find welfare rights advice but they will simply tell you what you’ve read here i.e. there is no point in contacting DWP for advice. Spend your money as you need. Disclose the full details.

    Oh, you’ll also get told by someone eventually that you must keep receipts. That is utter nonsense. It helps if you can. It would be stupid not to if you could but there’s no obligation and it’s not fatal if you don’t. On the other hand the evidence trail with a car should be very clear cut.
  • CaleyCaley Member Posts: 21 Listener
    edited April 16
    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?
  • mikehughescqmikehughescq Member Posts: 5,998 Disability Gamechanger
    Nothing has changed at all on decades with this particular legislation. Nothing has got stricter.

    The point is that you don’t have to prove it. As stated earlier the onus is on them. The burden of proof to show that it was a SOP always falls on the party seeking to change a decision. 

    You have been talking to a “specialist welfare rights adviser” and I’ve literally said all that needs to be said. You make a detailed declaration explaining every aspect and let them get on with it. There is no second guessing to be done. You declare. They decide. You challenge if necessary.
  • CaleyCaley Member Posts: 21 Listener
    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.
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