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Notes:
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Capital - deprivation - acquisition of a possession with the intention of obtaining income support - inter-relation between the valuation of actual capital under paragraph 10 of Schedule 10 to the Income Support Regulations and notional capital under regulation 51(1).
The claimant was in receipt of income support until he received £17,935.46 from the sale of the family home. This brought his capital to £24,769.28, and from 20 November 2001 his income support came to an end. On 4 April 2002, he made a new claim for income support, declaring savings of £7,026.54. Part of the reason for the reduction in his capital was the purchase of a Vauxhall Zafira car for £12,125.25. A decision-maker decided, pursuant to regulation 51(1) of the Income Support (General) Regulations 1987, that the claimant had intentionally deprived himself of £12,125.25 for the purposes of securing entitlement to income support and should be treated as having capital of that amount. That decision was upheld by an appeal tribunal ("the first tribunal"). From 22 October 2002, the claimant made a further claim for income support. He declared savings of £2,699.60. A decision-maker found that the claimant still possessed notional capital from the purchase of the car, but that the amount should be treated as reduced to £7,897.25, pursuant to the diminishing notional capital rule in regulation 51A. A tribunal ("the second tribunal") upheld this decision. The claimant's total notional and actual capital disentitled him from income support.
The claimant appealed on the grounds that the second tribunal erred by failing to take into account the effect of paragraph 10 of Schedule 10 to the Income Support (General) Regulations 1987.
Held, allowing the appeal,
1. where a claimant acquires a personal possession with the intention of reducing his capital to obtain income support, the value of that possession forms part of his actual capital (pursuant to paragraph 10 of Schedule 10 to the Income Support (General) Regulations 1987), which is valued under regulation 49(a) of those Regulations before the question of whether he has notional capital is considered (paragraphs 14-17);
2. the difference in value, at the date of deprivation, between the market or surrender value of the possession (as calculated under regulation 49(a)) and the cost of its acquisition is then treated as notional capital: CIS/494/1990 followed (paragraph 18);
3. that notional capital figure does not increase when the value of the personal possession depreciates further: CIS/494/1990 not followed (paragraph 19);
4. the finding of the first tribunal that the claimant possessed notional capital does not bind future decision-makers and tribunals, as the effect of section 17(2) of the Social Security Act 1998 is that no finding of fact or other determination which forms part of a decision on entitlement to benefit is conclusive for any other purpose (paragraph 11);
5. had the first tribunal applied the law correctly, it would have found that the claimant was disentitled from income support because he had actual capital of at least £8,000, being the market value of the Vauxhall Zafira (paragraph 22);
6. the diminishing notional capital rule in regulation 51(1A) of the Income Support (General) Regulations 1987 could not therefore be applied to the further claim from 22 October 2002, because it was the claimant's actual (not notional) capital which had disentitled him to income support on the 4 April 2002 claim (paragraph 23);
7. where regulation 51A cannot be applied, notional capital might in some circumstances be treated as reduced by the expenditure which a claimant would reasonably incur because of not being entitled to income support, although the claimant here could not benefit from this principle as this expenditure was already reflected in the reduction of his actual savings: CIS/3268/2002 followed (paragraph 24).
The Commissioner remitted the appeal to a new tribunal for a re-hearing. |
