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Thread: Unintentionally Deprived myself of Capital

  1. #1

    Unintentionally Deprived myself of Capital

    Please bear with me, I'm in a dreadful state of anxiety, after discovering I made a mistake about some money I received as a gift. So this is what's happened, I am on contribution based ESA and have been for a while. Back in February this year I received out of the blue a gift of a large sum of money. I immediately checked where I stood with regards to benefits, I knew I was on contribution based ESA when I first stopped work, and read that I don't have to disclose any savings if on cb ESA, I also then discovered it ran out after a certain time, but because I'm in the support group I still get CB ESA. I stupidly then deducted from everything that i had read, that I didn't need to disclose the money. I used some to pay of my small mortgage and some to buy the field where my pony lives, because of my anxiety I don't do well around people and I don't have much money and the cheapest and best way for me to still have my pony was to secure the field. I have also moved house to a house closer to the field and £5000 dearer than my sold property. When I rang to inform DWP of change of address they asked about equity evidence from sale and then advised me that I was on income based top up so they needed to know about this and savings. I have now disclosed the gift to them. I have done a lot of research and my deduction is that I will now live on the money left until it runs out, and then I will have to try to claim income based benefits again,but this is the things I am so concerned about, I think they will expect me to still have left the money spent on the mortgage and field and class it as notional capital, in which case I could end up losing the field and even my house, because once the money that I have left currently has gone I couldn't afford to live without the income based topup. My further research is leading me to believe it's all about my intent when I paid off the house and bought the field, i.e. did I do it with the intent of claiming benefits sooner, is this right? If it is right, I know I didn't, because I didn't think I had to declare it because of my stupid mistake of not knowing i was on income support topup, but I can't prove that (maybe the phone call to the dwp re change of address if they recorded it?) maybe two good friends who I discussed it with, how can I prove that was the case? I would not have spent it if I had known I had to use it to live off of, I still have enough to live for 6 years spending what I would have got in income based benefit top up and if my intent was to spend the money so I could live off benefits asap I would have spent all of it. I am petrified that I am going to lose my pony and my home (my home is modest 2 bed semi), if my home had enough equity to lose it and still live somewhere decent that wouldn't be too bad but it doesn't. I don't know what to do and what the outcome will be. Will they start investigating me know or will declaring the money simply stop benefits and they won't investigate until I try to claim, my assumption would be this? And, if so, that means I won't know what they will do for years, until I try to claim again. Anybody with experience of this or knowledge of how to handle this or how it may go, please I would be really grateful if you could advise. I'm currently on the phone to CAB as everywhere I call for help on this just signpost me there! One hour now!!

  2. #2
    Senior Member nukecad's Avatar
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    To start with and maybe put your mind a bit easier.
    The CB part of your ESA is not affected by savings/capital, it's only the IR top up that may be affected.

    So the first £111 of your ESA would still have been paid anyway.

    You don't say which premiums you get, if you can tell us how much ESA you have been getting we can work that out.


    The issue of deprivation is often a tricky one.
    It is supposed to be deliberate to be against the rules.
    But it's hard to show whether or not you knew the rule when you spent the money.

    Moving house is usually OK, as long as it's a similar sized property.
    The field would be another question.

    In the worst case if they decide that you did it deliberately (which you could appeal) then you may have to pay some back.

    But that would only be the IR part not all of the ESA, you would still be paid the CB part.
    They usually take back any repayment over time by taking it from the ESA you will still be getting.
    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.

  3. #3
    Senior Member nukecad's Avatar
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    Just a bit more

    In your favour is the fact that you still seem to have asubstantial part of the money left.

    That would tend to rule out tgat you deliberately deprived yoyrself in order to increase benefits.

    But it still leaves the issue that you should have declared it when you got it so have almost certainly been overpaid.
    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. #4
    What I can say is the DWP did tell me that when I paid off my high interest rate CC, they did "not" consider it deprivation of capital and accepted my argument in the long term it saves me money on interest.

    So that gives some hope the DWP will accept spending of money if it makes longer term financial sense "and" you wasnt aware of the impact on benefits "and" it doesnt cause you short term financial problems. How much of this applies to your case I have absolutely no idea tho, just reporting what the DWP told me.

  5. #5
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    I would stop panicking. Look the positives: you own your own home. You own a horse and a field. A wise thing to do is put some of the money into a 5 year fixed bond. It means its earning interest and you cannot touch it for 5 yrs. Live off your savings: (I'm doing the same) But live WISELY. Don't go mad, budget carefully, take advice on finance from some one you trust. Don't stick it all on CC. Thats just a debt that needs paying.
    We none of us know what the future holds with Brexit etc so take it one day at a time.

  6. #6
    Quote Originally Posted by nukecad View Post
    To start with and maybe put your mind a bit easier.
    The CB part of your ESA is not affected by savings/capital, it's only the IR top up that may be affected.


    Hi Nukecad, thank you for your reply - I will reply below
    So the first £111 of your ESA would still have been paid anyway.

    You don't say which premiums you get, if you can tell us how much ESA you have been getting we can work that out.

    Yes, that's what I had understand I used to get about 840 per month and I did get a severe disability premium I think...


    The issue of deprivation is often a tricky one.
    It is supposed to be deliberate to be against the rules.
    But it's hard to show whether or not you knew the rule when you spent the money.

    Yes, that's my understanding. I've got a friend trying to find text I sent her as if I get that back I can prove I didn't do it deliberately....

    Moving house is usually OK, as long as it's a similar sized property.

    I think it's the paying off the mortgage when it didn't have to be that's the problem?
    The field would be another question.
    Yes, if they get nasty I think they could make it difficult for me to keep the field.

    In the worst case if they decide that you did it deliberately (which you could appeal) then you may have to pay some back.

    I was thinking they will want it all back and won't pay any income based benefits until it has gone, as it's notional capital. And, that I will have to pay back now the overpayment since the money hit my account?

    But that would only be the IR part not all of the ESA, you would still be paid the CB part.
    They usually take back any repayment over time by taking it from the ESA you will still be getting.


    Hi Nukecad, thank you for your reply - I will reply below
    So the first £111 of your ESA would still have been paid anyway.

    You don't say which premiums you get, if you can tell us how much ESA you have been getting we can work that out.

    Yes, that's what I had understand I used to get about 840 per month and I did get a severe disability premium I think...


    The issue of deprivation is often a tricky one.
    It is supposed to be deliberate to be against the rules.
    But it's hard to show whether or not you knew the rule when you spent the money.

    Yes, that's my understanding. I've got a friend trying to find text I sent her as if I get that back I can prove I didn't do it deliberately....

    Moving house is usually OK, as long as it's a similar sized property.

    I think it's the paying off the mortgage when it didn't have to be that's the problem?
    The field would be another question.
    Yes, if they get nasty I think they could make it difficult for me to keep the field.

    In the worst case if they decide that you did it deliberately (which you could appeal) then you may have to pay some back.

    I was thinking they will want it all back and won't pay any income based benefits until it has gone, as it's notional capital. And, that I will have to pay back now the overpayment since the money hit my account?

  7. #7
    Quote Originally Posted by nukecad View Post
    Just a bit more

    In your favour is the fact that you still seem to have asubstantial part of the money left.

    That would tend to rule out tgat you deliberately deprived yoyrself in order to increase benefits.

    But it still leaves the issue that you should have declared it when you got it so have almost certainly been overpaid.
    Thank you again!

    I was hoping that having a lot would show that I haven't spent it deliberately for deprivation of capital reason. Reassuring to hear you think that would be the case.

    Yes, I've got about £3500 to pay back from my calculations and that's fine, I've still got the money left which can cover that.

  8. #8
    Quote Originally Posted by worried33 View Post
    What I can say is the DWP did tell me that when I paid off my high interest rate CC, they did "not" consider it deprivation of capital and accepted my argument in the long term it saves me money on interest.

    So that gives some hope the DWP will accept spending of money if it makes longer term financial sense "and" you wasnt aware of the impact on benefits "and" it doesnt cause you short term financial problems. How much of this applies to your case I have absolutely no idea tho, just reporting what the DWP told me.
    Hi, thank you for replying with you experience, it sounds reassuring. All of the above apply. Gosh I hope that's how they decide for me, I don't think I will know for while though....

  9. #9
    Quote Originally Posted by reddivine View Post
    I would stop panicking. Look the positives: you own your own home. You own a horse and a field. A wise thing to do is put some of the money into a 5 year fixed bond. It means its earning interest and you cannot touch it for 5 yrs. Live off your savings: (I'm doing the same) But live WISELY. Don't go mad, budget carefully, take advice on finance from some one you trust. Don't stick it all on CC. Thats just a debt that needs paying.
    We none of us know what the future holds with Brexit etc so take it one day at a time.
    Thanks for you reply. I will be living off the remainder of the money and it will last 5 years, but after that I won't have enough to live without income based benefit and it's that that's worrying me. I do get what you're saying though and I'm trying to not think ahead, but it's such a big worry. I do know how lucky I am too and most of that has been worked and paid for by myself until I got ill.

  10. #10
    Quote Originally Posted by Muddly View Post
    Hi, thank you for replying with you experience, it sounds reassuring. All of the above apply. Gosh I hope that's how they decide for me, I don't think I will know for while though....
    Be aware tho they were probably lenient with me given I was just £300 over 6k, they probably were looking for ways to avoid the paper work.

    My CC was 29% APR, if it was a 0% CC or low interest e.g. 6%, then it wouldnt have made financial sense to use the money to pay it off. So it depends on the terms of the debt.

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