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Neutral Citation Number:
Reported Number:	R(H)1/06
File Number:	CH 3169 2004
Appellant:
Respondent:
Judge/Commissioner:	Judge P. L. Howell Q.C.
Date Of Decision:	03/03/2005
Date Added:	15/03/2005
Main Category:	Capital
Main Subcategory:	Notional Capital: deprivation
Secondary Category:	Housing and council tax benefits
Secondary Subcategory:	other
Notes:	Capital – deprivation – significant operative purpose The claimant had suffered from schizophrenia for many years and had difficulty in coping on his own. Towards the end of 2001 he inherited a sum of money that substantially exceeded the capital limit for housing benefit. He informed the local authority and his award of housing benefit was terminated. In May 2002 he made a further claim for housing benefit, stating that his capital had decreased to below the capital limit. Housing benefit was paid for five months, but then the local authority made enquiries and decided that he had deprived himself of capital totalling £68,845 for the purpose of securing entitlement to housing benefit. He therefore had to be treated as possessing capital in excess of £16,000 under regulation 43 Housing Benefit (General) Regulations 1987 for the purposes of his claim from May 2002, with the result that there was no entitlement and he was legally liable to repay the amount already paid to him for that period. He appealed and his representative produced evidence of his psychiatric condition to the tribunal indicating that he was unlikely to have fully appreciated the potential implications of his behaviour. The tribunal dismissed his appeal, finding that he was capable of managing his own affairs and of realising he was spending his money imprudently, and that a significant operative purpose of his expenditure was to secure entitlement to housing benefit. Held, allowing the appeal, that: 1. the correct test to be applied in determining whether the claimant is shown to have deprived himself of capital for the purpose of securing entitlement to housing benefit is the well-established one applied on similar wording in the main social security legislation, namely whether the securing of such entitlement is shown to have been a “significant operative purpose” of the claimant’s relevant actions in disposing of his capital (paragraphs 20 to 23); 2. the test of a claimant’s purpose in depriving himself of capital is a subjective one, depending on the evidence about the particular claimant in question and the tribunal had erred in concluding that because a person is not completely incapable of managing his affairs or of realising he was spending his money imprudently, it follows as a matter of course and without further analysis that all such spending is done for the purpose of securing entitlement to benefit (paragraph 13); 3. the tribunal had also erred in failing to provide any breakdown or analysis of the actual amounts or occasions in respect of which the claimant was being found as a fact to have (a) deprived himself of capital and (b) done so for the purpose of obtaining benefit (paragraphs 15 to 18). The Commissioner remitted the case to a differently constituted tribunal for determination.
Decision(s) to Download:	R(H) 1_06 bv.doc