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Neutral Citation Number:	2015 UKUT 51 AAC
Reported Number:
File Number:	CIS 4315 2012
Appellant:	VW
Respondent:	Secretary of State for Work and Pensions (IS)
Judge/Commissioner:	Judge M. Rowland
Date Of Decision:	30/01/2015
Date Added:	12/02/2015
Main Category:	Capital
Main Subcategory:	Notional Capital: deprivation
Secondary Category:
Secondary Subcategory:
Notes:	Reported as [2015] AACR 39 Notional capital – capital used to pay debt – whether claimant deprived herself of capital for the purpose of increasing amount of income support In 2009 the claimant had been awarded income support (IS) and on 25 July 2011 a customer compliance officer visited to review her entitlement. The claimant later provided bank statements which showed that on 25 July 2011 she had withdrawn £7,000 from an ISA account. When asked about that withdrawal she explained that the money was used to repay a loan from her ex-partner and she produced some evidence that there had been a loan and that her ex-partner had asked that it be repaid. The Secretary of State understood that the customer compliance officer had explained to the claimant the effect of income and capital on entitlement to IS and the effect of depriving herself of capital or income. He decided that, while the claimant’s predominant purpose might have been to repay the debt, the timing of the withdrawal showed that a significant operative purpose was to reduce the effect that her total capital would have on her entitlement to IS and so she was to be treated as still possessing the £7,000 under regulation 51(1) of the Income Support (General) Regulations 1987. The claimant appealed against that decision and stated that the officer had not explained the rules regarding capital and that her withdrawal of the money on the day of the visit had been a coincidence. The First-tier Tribunal (F-tT) dismissed her appeal, accepting the Secretary of State’s view of the facts and finding that she had deliberately deprived herself of capital for the purpose of increasing her entitlement to IS. The claimant appealed to the Upper Tribunal, which considered the case in the light of R(SB) 12/91, in which it was held that “any divesting of capital resources in pursuance of the reduction or discharge of [an immediately repayable debt] cannot be for the purpose of securing … benefit or any increase thereof”, and Jones v Secretary of State for Work and Pensions [2003] EWCA Civ 964, in which the Court of Appeal considered R(SB) 12/91.
Decision(s) to Download:	[2015] AACR 39ws.doc