Editor's Blog4 mins ago
Unusual Income Support Problem
6 years ago my brother recieved back dated state benefits which were due. This process took 2 years but finally recived the money through. I opened a savings account under his name to put this �14,000 in. 6 months ago his income support was stopped which was c�140.00 per week, leaving him only �300 per month from DLA , his monthly outgoings exceed this. It was assed that his savings / captial exceeded �16,000. As these were backdated benefits that went into the savings this doesn't seem right and effectively this is the government claiming back the money that he went without previously. Can someone please advise if he has a case that his income support should not be stopped? Or if there is a way around the savings investment he has so he drops below the limit.
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In addition to this specifically here is the information on captial savings. : 1.2 Must not have capital over �16,000
Income Support is not payable to a person if s/he and/or partner have capital over �16,000. Those who are permanently in residential care, nursing homes or other types of residential accommodation also lose entitlement if they have over �16,000 in savings and/or capital. The legislation sets out what counts as capital and what can be ignored.
Personal possessions (other than those which would be considered an investment, eg an art collection) and the person's home will not normally be included as savings or capital. Any payment made to a person as the holder of a Victoria or George Cross medal will also be ignored. The surrender value of any insurance policies and certain other savings can be ignored in specific circumstances. For the full list of what is ignored as capital, see Schedule 10 of the Income Support (General) Regulations (NI) 1987 as amended.
A person will still be treated as possessing capital where s/he has deprived her/himself of this capital in order to secure or increase entitlement to Income Support.
Income Support is not payable to a person if s/he and/or partner have capital over �16,000. Those who are permanently in residential care, nursing homes or other types of residential accommodation also lose entitlement if they have over �16,000 in savings and/or capital. The legislation sets out what counts as capital and what can be ignored.
Personal possessions (other than those which would be considered an investment, eg an art collection) and the person's home will not normally be included as savings or capital. Any payment made to a person as the holder of a Victoria or George Cross medal will also be ignored. The surrender value of any insurance policies and certain other savings can be ignored in specific circumstances. For the full list of what is ignored as capital, see Schedule 10 of the Income Support (General) Regulations (NI) 1987 as amended.
A person will still be treated as possessing capital where s/he has deprived her/himself of this capital in order to secure or increase entitlement to Income Support.
As I uncover more paragraph 10 shows can be ignored, Not sure if this covers it but at first reading appears to.
SCHEDULE 10
Regulation 46(2)
CAPITAL TO BE DISREGARDED
1. The dwelling occupied as the home but, notwithstanding regulation 23 (calculation of income and capital of members of claimant's family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.
2. Any premises acquired for occupation by the claimant which he intends to occupy within26 weeks of the date of acquisition or such longer period as is reasonable in the circumstances to enable the claimant to obtain possession and commence occupation of the premises.
3. Any sum directly attributable to the proceeds of sale of any premises formerly occupied by the claimant as his home which is to be used for the purchase of other premises intended for such occupation within 26 weeks of the date of sale or such longer period as is reasonable in the circumstances to enable the claimant to complete the purchase.
4. Any premises occupied in whole or in part by�
(a) a partner or relative of any member of the family where that person is aged 60 or over or is incapacitated;
(b) the former partner of a claimant where the claimant is not to be treated as occupying a dwelling as his home; but this provision shall not apply where the former partner is a person from whom the claimant is estranged or divorced.
5. Any reversionary interest.
6. The assets of any business owned in whole or in part by the claimant and for the purposes of which he is engaged as a self-employed earner or, if he has ceased to be so engaged, for such period as may be reasonable in the circumstances to allow for disposal of any such asset.
SCHEDULE 10
Regulation 46(2)
CAPITAL TO BE DISREGARDED
1. The dwelling occupied as the home but, notwithstanding regulation 23 (calculation of income and capital of members of claimant's family and of a polygamous marriage), only one dwelling shall be disregarded under this paragraph.
2. Any premises acquired for occupation by the claimant which he intends to occupy within26 weeks of the date of acquisition or such longer period as is reasonable in the circumstances to enable the claimant to obtain possession and commence occupation of the premises.
3. Any sum directly attributable to the proceeds of sale of any premises formerly occupied by the claimant as his home which is to be used for the purchase of other premises intended for such occupation within 26 weeks of the date of sale or such longer period as is reasonable in the circumstances to enable the claimant to complete the purchase.
4. Any premises occupied in whole or in part by�
(a) a partner or relative of any member of the family where that person is aged 60 or over or is incapacitated;
(b) the former partner of a claimant where the claimant is not to be treated as occupying a dwelling as his home; but this provision shall not apply where the former partner is a person from whom the claimant is estranged or divorced.
5. Any reversionary interest.
6. The assets of any business owned in whole or in part by the claimant and for the purposes of which he is engaged as a self-employed earner or, if he has ceased to be so engaged, for such period as may be reasonable in the circumstances to allow for disposal of any such asset.
7. Any arrears of, or any concessionary payment made to compensate for arrears due to the non-payment of�
(a) any payment specified in paragraph 6, 8 or 9 of Schedule 9 (other income to be disregarded);
(b) an income-related benefit or supplementary benefit, family income supplement under the Family Income Supplements Act 1970[160] or housing benefit under Part II of the Social Security and Housing Benefits Act 1982;
but only for a period of 52 weeks from the date of the receipt of the arrears or of the concessionary payment.
8. Any sum�
(a) paid to the claimant in consequence of damage to, or loss of the home or any personal possession and intended for its repair or replacement; or
(b) acquired by the claimant (whether as a loan or otherwise) on the express condition that it is to be used for effecting essential repairs or improvements to the home,and which is to be used for the intended purpose, for a period of 26 weeks from the date on which it was so paid or acquired or such longer period as is reasonable in the circumstances to enable the claimant to effect the repairs, replacement or improvements.
9. Any sum�
(a) deposited with a housing association as defined in section 1(1) of the Housing Associations Act 1985[161] or section 338(1) of the Housing (Scotland) Act 1987[162] as a condition of occupying the home;
(b) which was so deposited and which is to be used for the purchase of another home, for the period of 26 weeks or such longer period as is reasonable in the circumstances to complete the purchase.
10. Any personal possessions except those which had or have been acquired by the claimant with the intention of reducing his capital in order to secure entitlement to supplementary benefit or income support or to increase the amount of that benefit.
11. The value of the right to receive any income under an annuity and the surrender value (if any)
(a) any payment specified in paragraph 6, 8 or 9 of Schedule 9 (other income to be disregarded);
(b) an income-related benefit or supplementary benefit, family income supplement under the Family Income Supplements Act 1970[160] or housing benefit under Part II of the Social Security and Housing Benefits Act 1982;
but only for a period of 52 weeks from the date of the receipt of the arrears or of the concessionary payment.
8. Any sum�
(a) paid to the claimant in consequence of damage to, or loss of the home or any personal possession and intended for its repair or replacement; or
(b) acquired by the claimant (whether as a loan or otherwise) on the express condition that it is to be used for effecting essential repairs or improvements to the home,and which is to be used for the intended purpose, for a period of 26 weeks from the date on which it was so paid or acquired or such longer period as is reasonable in the circumstances to enable the claimant to effect the repairs, replacement or improvements.
9. Any sum�
(a) deposited with a housing association as defined in section 1(1) of the Housing Associations Act 1985[161] or section 338(1) of the Housing (Scotland) Act 1987[162] as a condition of occupying the home;
(b) which was so deposited and which is to be used for the purchase of another home, for the period of 26 weeks or such longer period as is reasonable in the circumstances to complete the purchase.
10. Any personal possessions except those which had or have been acquired by the claimant with the intention of reducing his capital in order to secure entitlement to supplementary benefit or income support or to increase the amount of that benefit.
11. The value of the right to receive any income under an annuity and the surrender value (if any)
12.�(1) Where the funds of a trust are derived from a payment made in consequence of any personal injury to the claimant the value of the trust fund and the value of the right to receive any payment under that trust, for a period of two years or such longer period as is reasonable in the circumstances beginning�
(a) if, at the date of the payment the claimant or his partner is in receipt of an income-related benefit, on that date;
(b) in any other case, on the date on which an income-related benefit is first payable to the claimant or his partner after the date of that payment,
but, for the purposes of regulation 17, 18, 21, 44(5) and 71 and Schedules 4 and 5 (applicable amounts and modifications in respect of children and young persons) in calculating the capital of a child or young person there shall be no limit as to the period of disregard under this paragraph.
(2) For the purposes of sub-paragraph (1) any reference to an income-related benefit shall be construed as if it included a reference to supplementary benefit.
13. The value of the right to receive any income under a life interest or from a liferent.
14. The value of the right to receive any income which is disregarded under paragraph 11 of Schedule 8 or paragraph 23 of Schedule 9 (earnings or other income to be disregarded).
15. The surrender value of any policy of life insurance.
(a) if, at the date of the payment the claimant or his partner is in receipt of an income-related benefit, on that date;
(b) in any other case, on the date on which an income-related benefit is first payable to the claimant or his partner after the date of that payment,
but, for the purposes of regulation 17, 18, 21, 44(5) and 71 and Schedules 4 and 5 (applicable amounts and modifications in respect of children and young persons) in calculating the capital of a child or young person there shall be no limit as to the period of disregard under this paragraph.
(2) For the purposes of sub-paragraph (1) any reference to an income-related benefit shall be construed as if it included a reference to supplementary benefit.
13. The value of the right to receive any income under a life interest or from a liferent.
14. The value of the right to receive any income which is disregarded under paragraph 11 of Schedule 8 or paragraph 23 of Schedule 9 (earnings or other income to be disregarded).
15. The surrender value of any policy of life insurance.
16. Where any payment of capital falls to be made by instalments, the value of the right to receive any outstanding instalments.
17. Except in the case of a person to whom section 23 of the Act (trade disputes) applies and for so long as it applies, any payment made under section 1 of the Child Care Act 1980 (duty of local authorities to promote welfare of children) or, as the case may be, section 12 of the Social Work (Scotland) Act 1968 (general welfare).
18. Any social fund payment.
19. Any refund of tax which falls to be deducted under section 26 of the Finance Act 1982[163] (deductions of tax from certain loan interest) on a payment of relevant loan interest for the purpose of acquiring an interest in the home or carrying out repairs or improvements in the home.
20. Any capital which under regulations 41 and 44(1) (capital treated as income and modifications in respect of children and young persons) is to be treated as income.
21. Where a payment of capital is made in a currency other than sterling, any banking charge or commission payable in converting that payment into sterling.
17. Except in the case of a person to whom section 23 of the Act (trade disputes) applies and for so long as it applies, any payment made under section 1 of the Child Care Act 1980 (duty of local authorities to promote welfare of children) or, as the case may be, section 12 of the Social Work (Scotland) Act 1968 (general welfare).
18. Any social fund payment.
19. Any refund of tax which falls to be deducted under section 26 of the Finance Act 1982[163] (deductions of tax from certain loan interest) on a payment of relevant loan interest for the purpose of acquiring an interest in the home or carrying out repairs or improvements in the home.
20. Any capital which under regulations 41 and 44(1) (capital treated as income and modifications in respect of children and young persons) is to be treated as income.
21. Where a payment of capital is made in a currency other than sterling, any banking charge or commission payable in converting that payment into sterling.
talk about answering your own question!
Look at point 7 and you have your answer.
this is right. you say he only has 300 pounds to live on a month, but what about his savings? he can live on those!
i cant believe that someone who has 14000 pounds in savings is moaning about beinfg poorly off, or even contemplating "getting round" the system to get more money. If you are not happy with his 14 Grand, i'll have it
Look at point 7 and you have your answer.
this is right. you say he only has 300 pounds to live on a month, but what about his savings? he can live on those!
i cant believe that someone who has 14000 pounds in savings is moaning about beinfg poorly off, or even contemplating "getting round" the system to get more money. If you are not happy with his 14 Grand, i'll have it
Ok, Ok,. New to this site as of yesterday. Point noted its a bit too much information. However I posted the original question then did some further research and pasted it accross. Putting in a link and point 7 would have covered it but I felt it was good to get opinion from others. I would be interested to know bednobs background and whether he understands the question, this isn;t getting round the system or some asbo who's robbing of the state. The savings don't come as a luxury they are back dated for being disabled for a number of years and not being paid the right amount of benefit. The money he went without was paid back and once paid back was then living on the proper income support and payments that he was entitled to. Whats he supposed to do get the back dated money and spend it all straight away. You ignorant fool
hey, thanks for your kind words!!!
I'm sorry but income support is for people who are on the breadline and literally cannot afford things. I can hardly see that someone with OVER 16 thousand pounds of savings come into this category. i understand that this isbackdated benefits, but as the rules you have posted clearly state, it can only take it over the limit for 12 months, not six years. If your brother has not had to touch these savings for six years, or use them to pay for things he had to get when he should have been getting the benefit originally, then the benfits he is getting is quite clearly enough for him to live on
i wasn't suggesting he was trying to cheat the benefit system, just using your words when you asked if he could "get around" the savings limit so he could get more money (i.e. thie income support)
All he needs to do is use the savings to live on till it falls below the threshold then he should get all his money again. There is no way round this, it is not unfair.
it is really hard for someone that works full time and has around �100 quid in a savings account to see people getting upset because their savings of sixteen thousand pounds have taken the above the threshold to get more benefits. Sixteen thou in savings is more than most people would ever expect to have in savings in a life time really
I'm sorry but income support is for people who are on the breadline and literally cannot afford things. I can hardly see that someone with OVER 16 thousand pounds of savings come into this category. i understand that this isbackdated benefits, but as the rules you have posted clearly state, it can only take it over the limit for 12 months, not six years. If your brother has not had to touch these savings for six years, or use them to pay for things he had to get when he should have been getting the benefit originally, then the benfits he is getting is quite clearly enough for him to live on
i wasn't suggesting he was trying to cheat the benefit system, just using your words when you asked if he could "get around" the savings limit so he could get more money (i.e. thie income support)
All he needs to do is use the savings to live on till it falls below the threshold then he should get all his money again. There is no way round this, it is not unfair.
it is really hard for someone that works full time and has around �100 quid in a savings account to see people getting upset because their savings of sixteen thousand pounds have taken the above the threshold to get more benefits. Sixteen thou in savings is more than most people would ever expect to have in savings in a life time really
Calm down, lolpeters, calm down. Savings arising from the backpayment are disregarded for 12 months under the rules. Personallly, I think that encourages people to waste the money or 'hide' it. I suggest the backpayment should be disregarded for something like 2 years- but in this case I think SIX years have passed. If he hasn't dipped into these savings now then when was he going to do so and it begs the question whether he needs the money.
The whole idea of a savings cap is wrong in my view though- honest hard working savers are penalised and dishonest well-off people who 'hide' the money or who have just frittered it away get rewarded. The means testing culture backfires on the government because it discourages people from saving.
Finally lolpeters: you would be better posting a question under 1 heading only- you've posted this under Business and under Law. You get different threads and each thread doesn't get the full range of responses.
And as I said on your other posting: a brief question and an analysis of key points plus a link to relevant website makes it so much easier for AB contributors to follow. Pages and pages of information, mostly irrelevant, doesn't help: in such cases 'more is less' and 'less is more'.
The whole idea of a savings cap is wrong in my view though- honest hard working savers are penalised and dishonest well-off people who 'hide' the money or who have just frittered it away get rewarded. The means testing culture backfires on the government because it discourages people from saving.
Finally lolpeters: you would be better posting a question under 1 heading only- you've posted this under Business and under Law. You get different threads and each thread doesn't get the full range of responses.
And as I said on your other posting: a brief question and an analysis of key points plus a link to relevant website makes it so much easier for AB contributors to follow. Pages and pages of information, mostly irrelevant, doesn't help: in such cases 'more is less' and 'less is more'.
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