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Thread: Unintentionally Deprived myself of Capital

  1. #11
    Senior Member nukecad's Avatar
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    I wouldn't worry too much about having paid off the mortgage on one property then buying another without a mortgage.
    You have to pay off the mortgage when you move house, you don't have any choice in the matter so it's not (usually) deliberate deprivation.

    If there is an overpayment of ESA to pay back then they will want to take it week by week from the CB ESA that you will still be entitled to.

    It may seem odd, but they won't want you to pay it back all at once if that would mean reducing your savings.
    It's complicated, but it's to do with the deprivation rules again.
    If you pay a bill/debt all at once when you could pay it over time instead then that could be/is 'deprivation of capital with a view to increasing benefits'.
    It doesn't matter that the debt is actually due to the DWP themselves.

    If you pay an overpayment back all at once, and so reduce your savings, then that could mean that they would have to pay you more in benefits.
    Which means that the DWP/government/taxpayer would loose out overall. (Which is why that's then deprivation).

    So you should still get some CB ESA, at a reduced amount to pay back the overpayment over time.
    And as the others have said you will have to live sensibly off your remaining savings, until they drop below £16k at which time you can get some IR benefit again.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

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  2. #12
    Quote Originally Posted by nukecad View Post
    I wouldn't worry too much about having paid off the mortgage on one property then buying another without a mortgage.
    You have to pay off the mortgage when you move house, you don't have any choice in the matter so it's not (usually) deliberate deprivation.

    If there is an overpayment of ESA to pay back then they will want to take it week by week from the CB ESA that you will still be entitled to.

    It may seem odd, but they won't want you to pay it back all at once if that would mean reducing your savings.
    It's complicated, but it's to do with the deprivation rules again.
    If you pay a bill/debt all at once when you could pay it over time instead then that could be/is 'deprivation of capital with a view to increasing benefits'.
    It doesn't matter that the debt is actually due to the DWP themselves.

    If you pay an overpayment back all at once, and so reduce your savings, then that could mean that they would have to pay you more in benefits.
    Which means that the DWP/government/taxpayer would loose out overall. (Which is why that's then deprivation).

    So you should still get some CB ESA, at a reduced amount to pay back the overpayment over time.
    And as the others have said you will have to live sensibly off your remaining savings, until they drop below £16k at which time you can get some IR benefit again.
    Hi thank you so much again for your reply. I hadn't considered the need to pay off my mortgage when I move with regards to benefits obviously I knew I needed to pay it off and couldn't get another mortgage because I'm on benefits, so thank you for pointing that out.
    Also, I didn't realise that they would take it in installments, I guess that's better for me, it makes me feel safe that I've got the money in the bank, even if I can't use it, daft, I know!
    Would it be the same for notional capital, do you think, for example, if I come to claim again when my savings drop below the threshold, will they simply say you can't claim because you have notional capital i.e. the field, or will they say you can claim income based ESA but we will take back in installments the notional capital? this would be so good to know what you think on this? Thank you very much in advance

  3. #13
    Senior Member nukecad's Avatar
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    A field isn't notional capital, it exists so it's real capital.

    'Notional capital' or more usually 'Notional savings' means savings/capital that no longer exist because you disposed of them, but because of the way and the reason you disposed of them then the DWP are going to treat it as if they did still exist.

    For example if you gave your savings away (or spent them rashly) so that you would then come under the savings limits for IR benefit.
    The DWP will say that you didn't have to do that and treat it as if you still had the money; that's 'Notional Savings' (Savings you no longer have).

    Similarly if you have more than one house and gave one away to a relative, the DWP can say that you didn't have to do that and treat it as if you still had the property, that's 'Notional capital'. (Property you no longer have).

    Thinking more about your particular case:

    By buying the field, some property, all you have done is transfered some of your savings into capital.
    If you later sold it again you would be transfering the capital back to savings.
    So you still have it, just in a different form. (It's now the value of the field rather than money in the bank).

    As the values of both savings and capital count when assessing IR benefits then it doesn't really matter which form it is in.

    You still have the value, and it still affects IR benefits no matter which form it is in.
    So you have not deprived yourself of it in order to increase your benefits.
    You can't have deprived yourself of something when you still have the value of it.

    It will still be counted as capital when calculating if you are entitled to IR benefits, but they can't charge you with diliberate deprivation because you haven't deprived yourself.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

  4. #14
    Quote Originally Posted by nukecad View Post
    A field isn't notional capital, it exists so it's real capital.

    'Notional capital' or more usually 'Notional savings' means savings/capital that no longer exist because you disposed of them, but because of the way and the reason you disposed of them then the DWP are going to treat it as if they did still exist.

    For example if you gave your savings away (or spent them rashly) so that you would then come under the savings limits for IR benefit.
    The DWP will say that you didn't have to do that and treat it as if you still had the money; that's 'Notional Savings' (Savings you no longer have).

    Similarly if you have more than one house and gave one away to a relative, the DWP can say that you didn't have to do that and treat it as if you still had the property, that's 'Notional capital'. (Property you no longer have).

    Thinking more about your particular case:

    By buying the field, some property, all you have done is transfered some of your savings into capital.
    If you later sold it again you would be transfering the capital back to savings.
    So you still have it, just in a different form. (It's now the value of the field rather than money in the bank).

    As the values of both savings and capital count when assessing IR benefits then it doesn't really matter which form it is in.

    You still have the value, and it still affects IR benefits no matter which form it is in.
    So you have not deprived yourself of it in order to increase your benefits.
    You can't have deprived yourself of something when you still have the value of it.

    It will still be counted as capital when calculating if you are entitled to IR benefits, but they can't charge you with diliberate deprivation because you haven't deprived yourself.
    Sorry it's taken me so long to reply. Thank you so much for your clear and detailed reply. I used the wrong term with notional capital, I can see now the field is actual capital.

    I am trying to work out how if at all I can keep the field and claim income based benefits again when I need to. I paid £20,000 for the field, when my savings drop down to zero, after living off of them for the next x amount of years at a reasonable rate, if I hold off claiming and live off of fresh air for another few months (but supposedly at the rate of income based benefits I would have been entitled to), then if the field was capital in the form of cash that would have reduced to below the £16,000 threshold, does that make sense? So then I could claim benefits again. Do you think that could work with the field? Or does this situation mean that as a long as I have the field no matter how long I wait before claiming, I will not have reduced my capital because it's not in the form of cash and therefore can never claim as long as I have the field?

  5. #15
    Just a small point to consider, what would be the cost of livery for your pony? Would it not cost you more than your loss of weekly income related part of your ESA?
    I dread to think what livery costs now, especially if farm hand does morning feed and turning out/bringing in.
    Last edited by Priffy; 09-09-2019 at 12:48 AM.

  6. #16
    Senior Member nukecad's Avatar
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    Quote Originally Posted by Muddly View Post
    ..does this situation mean that as a long as I have the field no matter how long I wait before claiming, I will not have reduced my capital because it's not in the form of cash and therefore can never claim as long as I have the field?
    I believe so, depending on the valuation of the land of course.

    It will be regarded as an asset that you could sell in order to live off the proceeds of the sale.
    Otherwise everyone with savings would be buying land in order to reduce savings and claim IR benefits.

    It's only your main home and existing personal property that are not regarded as assets that you could reasonably sell.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

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  7. #17
    I seem to remember something and I'm not sure what it was so you need to check it out. I have a vague recollection that if you have land then you are deducted the amount of agricultural rent from your benefits. That's rent that you would receive if you rented it out.

  8. #18
    Quote Originally Posted by Priffy View Post
    Just a small point to consider, what would be the cost of livery for your pony? Would it not cost you more than your loss of weekly income related part of your ESA?
    I dread to think what livery costs now, especially if farm hand does morning feed and turning out/bringing in.
    It would probably cost me slightly less, that's one of the reasons I moved to a rented field which cost me £90 a month. Had I have known the problems it would cause I would have just carried on renting it :-( If I had to go back onto a livery yard I would have to give the ponies up, I just couldn't do it, have had very very bad experiences on yards and will never go there again.

  9. #19
    Quote Originally Posted by nukecad View Post
    I believe so, depending on the valuation of the land of course.

    It will be regarded as an asset that you could sell in order to live off the proceeds of the sale.
    Otherwise everyone with savings would be buying land in order to reduce savings and claim IR benefits.

    It's only your main home and existing personal property that are not regarded as assets that you could reasonably sell.
    Thanks for your reply, you've confirmed my worst thoughts. It's crazy though, because I could sell the field, live off the proceeds until I was under £16,000 start claiming some income based benefit again and borrow the money to buy another field! Pay it off gradually from my small amount of income benefit and a bit from my savings. But then, maybe that wouldn't work because they are going to now be watching my bank accounts forever and a day and will want to know what the money is that i've borrowed to buy another field. It does seem unfair! My house I already all but owned with a very small mortgage, out of all the money my father left me all I want is my field and my home and I can't even have that. I;m talking about 1/3rd of the money. Sorry I feel angry, I've always lived within the law and can't believe I've ended up in this situation and am going to lose everything that I could have had if I had not received his money. Even before the money I was looking at moving somewhere cheaper and trying to buy the field instead of paying rent and wasting money and I could have just about done it. And, I would have had more to live off.

  10. #20
    Quote Originally Posted by Cornwall View Post
    I seem to remember something and I'm not sure what it was so you need to check it out. I have a vague recollection that if you have land then you are deducted the amount of agricultural rent from your benefits. That's rent that you would receive if you rented it out.
    Thank you for your reply. That sounds interesting, I will look into it now. If that were the case then it would be a much better scenario, if instead of forcing me to sell it they just deducted the value of rent from my benefits, as if it was rented out. Yes it would reduce my benefits, but as long as i could still manage which I'm sure I could, I used to rent it for £90 month and that's value for horses, for sheep or other agricultural use it would be more like a few hundred pounds a year, I believe. I really hope this could be a possibility!

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