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Neutral Citation Number:	2011 UKUT 63 AAC
Reported Number:
File Number:	CJSA 3067 2009
Appellant:	JRL
Respondent:	Secretary of State for Work and Pensions
Judge/Commissioner:	Three-Judge Panel / Tribunal of Commissioners
Date Of Decision:	10/02/2011
Date Added:	07/03/2011
Main Category:	Capital
Main Subcategory:	Valuation
Secondary Category:
Secondary Subcategory:
Notes:	Reported as [2011] AACR 30. Capital – claimant with two bank accounts with same bank – whether overdraft to be deducted from credit balance in calculation of capital The claimant had two bank accounts with the same bank, a Bonus Saver account, which was in credit by £7,700.09 and a Student Additions account, which was overdrawn by £1,994.90. A decision-maker, acting on behalf of the Secretary of State, awarded the claimant income-based jobseeker’s allowance on the basis that he possessed capital of £7,700.09. As that figure was in excess of £6,000, he applied regulation 116(1) of the Jobseeker’s Allowance Regulations 1996, producing a tariff income of £7 per week in the calculation of the claimant’s entitlement to benefit. The claimant appealed, arguing that the sum produced by the deduction of his overdraft from his credit balance should have been used as the amount of his capital. The tribunal dismissed his appeal, holding that it was bound by R(SB) 2/83 to decide that the gross value of the claimant’s capital, without any deduction for the amount of his overdraft, fell to be applied in calculating the claimant’s entitlement to income-based jobseeker’s allowance. The claimant appealed to the Upper Tribunal. The Upper Tribunal directed the claimant to produce bank mandate agreements, and all applicable bank terms and conditions as at the relevant time. Held, allowing the appeal, that: 1. the tribunal had overlooked the crucial fact that the claimant’s capital consisted of bank accounts with the same bank and thus he was actually both a creditor and a debtor of the same body, unlike the situation which arose in R(SB) 2/83. In those circumstances, it should have sought production of the terms and conditions applicable to the relevant accounts and should have taken account of the meaning and effect of those terms and conditions in calculating “the current market … value” of the claimant’s capital consisting of the balances of those accounts for the purposes of regulation 111. In failing to proceed in that manner the tribunal had erred in law (paragraph 12); 2. the documents produced to the Upper Tribunal clearly showed that the agreement between the claimant and the bank conferred a contractual right on the bank as creditor to debit at any time without prior notice any of a customer’s accounts with it which were in credit with funds sufficient to reduce or repay any indebtedness which that customer might have to the bank (paragraph 15); 3. the “market value” of the balance in the Bonus Saver account was its net value after deduction of the amount of the claimant’s overdraft in his Student Additions account. Thus for the purposes of regulation 111, at the relevant time the market value of the claimant’s Bonus Saver account was £5,705.19 and no tariff income was applicable to the claimant in the calculation of his entitlement to income-based jobseeker’s allowance (paragraph 16).
Decision(s) to Download:	[2011] AACR 30ws.doc