Affect of charges refunds on benefit claims.

[zootscoot]

Thanks to Joa for the following information:

Refunds of bank charges are apparently being treated in line with regulations about capital. That is: less then £6000- disregarded, between £6000 and £16000- treated as having an income from this capital equivalent to £1 a week for each multiple of £250. This income is known as tariff income. For example: A claimant with capital totalling £6,290 is treated as having a tariff income of £2 a week. The table of tariff income can be found at http://www.dwp.gov.uk/housingbenefit...x/bw1annxb.pdf

Therefore people who are in receipt of income assessed benefits like HB, CTB, IS, JSA should declare any bank charges refunds over £6000 to avoid overpayment problems or fraud allegations.

There is a legal requirement to declare this capital so please take it seriously as when asked for bank statements during the next claim review, questions will be asked.

[redsonja]

Zootscoot.
I just want to point out that if you are a pensioner the tariff income is £1 for every £500. The £250 tariff applies to everyone below 60.
Hope this clarifies things.

[stephen81]

Therefore people who are in receipt of income assessed benefits like HB, CTB, IS, JSA should declare any bank charges refunds over £6000 to avoid overpayment problems or fraud allegations.

I would actually advise people to declare any refunds even if they are below £6k. The £6k threshold is total capital so a £3k refund on top of £4k someone already has in savings would put them over the threshold and that could potentially reduce their entitlement. It's always better to declare it even if it won't necessarily affect the claim. That way at least you've covered your own back.

[JunkiMunki]

I myself do not think this is fair, as the money claimed is rightfully the claimants, as like myself the charges that have been applied and debited from my account over the last 6 years was legally mine, and it was me and me only that had to survive on less than the minimum amount required to live on. Just because we have now decided to claim these back should not make a difference, to the benefits we claim now, anyone else agree with me on this .

[stephen81]

Originally Posted by JunkiMunki

I myself do not think this is fair, as the money claimed is rightfully the claimants, as like myself the charges that have been applied and debited from my account over the last 6 years was legally mine, and it was me and me only that had to survive on less than the minimum amount required to live on. Just because we have now decided to claim these back should not make a difference, to the benefits we claim now, anyone else agree with me on this .

I don't know whether it's fair or not really. But another way of looking at it is that if the charges over the last 6 years are legally your's, then any benefit claims over the last 6 years have ignored the money that you should have had. i.e. if the banks hadn't taken the charges, your capital would have been higher over the past 6 years and therefore you might not have been entitled to as much benefit. Claiming your charges back now simply means that your benefit should be adjusted to what it should have been already if the bank hadn't taken any charges from you. If anything you've maybe ended up with more benefit overall because your benefit has been assessed on a lower amount for the past 6 years? Hope that makes sense? In any case, I'm not saying what's right or wrong. I'm sure it's not the only thing that isn't fair about our benefits system, but then no system is perfect.

[Kurt_Hamster]

Ah but the monies owed (and being claimed) previously weren't available as a lump sum and as such more than likely would have had no effect on one's benefit. Now as they are in a lump sum it could indeed affect the benefits.

As to it being unfair, well all I can say is rules are rules and they no longer suddenly become unfair just because they now effect you.

[bluewater babe]

In reply to post 5.

The money was ours, we received it as wages. We paid it out as if a bill, to the bank, or credit card company or whomever.

We are now getting a refund of the bill, so we have already told HMRC that we have received the money - in our P60 (?) for the year that we DID receive it.

The only bit we could be receiving that we haven't already had is CI or Stat Int, or any other compensation, for time, photocopying etc THIS is the amount that i THINK we should be telling HMRC about.

You only have to pay CGT on that extra part you have earned - not the original amount that you have invested.

Any thoughts?

bbx

[bluewater babe]

However thinking again, some benefits are paid on a level of income - which is what i was talking about in post 7.

But the money may also affect your level of 'savings'! Which is what stephen may be talking about.

[stephen81]

Originally Posted by bluewater babe

However thinking again, some benefits are paid on a level of income - which is what i was talking about in post 7.

But the money may also affect your level of 'savings'! Which is what stephen may be talking about.

Yes, I am talking about your level of savings/capital. i.e. the balance of your bank account. The £6k threshold is not for income, it is for capital. I don't think a refund in bank charges would be classed as income (for benefits or tax purposes - although interest on it might?). The refund would only count as an increase in capital.

[neonron]

Originally Posted by stephen81

Yes, I am talking about your level of savings/capital. i.e. the balance of your bank account. The £6k threshold is not for income, it is for capital. I don't think a refund in bank charges would be classed as income (for benefits or tax purposes - although interest on it might?). The refund would only count as an increase in capital.

hi im just startijng a claim for my daughter who is on benefits,
lloyds have charged her over the last 3 yrs for returning dd and chq,s these charges they applied made it that when her benefits were paid into the account those charges came off the benefits which some months left her without money for shopping etc... and had to come to us for help.

so basically the way i see it if she claims these charges bk it is only money she should have had in the 1st place as it was taken off her benefits . am i right\?

[alibobsy]

Unfortunately the capital rules for benefits are quite clear, it doesn't matter where the money comes from it is classed as capital for benefit purposes. Interest on the capital is not taken into account as income this is seen as being covered in the tariff income calculation. People who have worked for say 20 years for a company and are made redundant could argue they are legally owed their redundancy payment and they have worked all that time for it, but it is still classed as capital. However You are allowed to spend the cash, but there are laws relating to deprivation of capital. They would look at what was a reasonable expense and what isn't. Spending a certain amount on living expenses might be allowed, but someone arguing they had spent £2k a week on food and living wouldn't. They look at is the spending non-essential ie a new car/tv etc. Or is it essential ie new mattress for bed wetting child, new oven when old one broke down. Or replacement carpet when previous one was worn out. Even paying off debt is defined, this is classed as non-essential, and yet this is exactly what a lot of people do with a windfall. The decision maker would ask for as much info and proof as poss for the spending so receipts backing up your purchases may well be requested. Mind you even if they made a dec you don't agree with you can appeal and have your case looked at again.
ali x

[JunkiMunki]

hiya ste 81,
I am just stating that the charges taken from my benefit was money that had already been given to me by the state for my living expenses, these legal living expenses have been reduced by the amount the bank has levvied from my account for the years in question, therefore as I SAID it was me and me only that has been penalised not the DWP, not the Government , but me and only me , and I have not claimed anything that I was not entitled to, and if it is my good fortune to have this refunded then surely it is only what I should have received during this period, afterall I must have been living below the governments allowance during the period.
junkimunki

[JunkiMunki]

hiya neonron,
Glad someone knows where I am coming from when I say that the money the banks have taken was legally mine and was given to me by the DWP, for living requirements , but unfortunately the banks have helped themselves to a sizeable portion of this before I could get my hands on it and it was us the benefit claimants that have lost out not the DWP, as it was our legal right to claim this money.
junkimunki x

[alibobsy]

I'm not saying there isn't a moral argument over the money and its unfair , but unfortunately the law is black and white. I personnally also disagree with inheritance tax as that money is left to you by relatives usually and morally it seems cheeky of the government to want a share. Depends on the amount being reclaimed as to whether it would actually effect the benefit being claimed. But a few claims against different banks over a fairly short period could easily push up the amount.
good luck
ali x

[JunkiMunki]

alibobsy , sorry to go on but it still does not matter as we were entitled to ALL that money legally and morally, but it was taken from us so therefore we were living UNDER THE REQUIRED AMOUNT, i AM CLAIMING MONEY that was taken illegally from the required amount the LAW SAYS i NEEDED TO LIVE ON. JUNKIMUNKI XX

[alibobsy]

Junkimunki I am not disagreeing with you, I just know how the DWP will treat the income. You would then have a right to appeal against the decision, but whether the tribunal would accept the arguement is unknown might be worth a shot though. The problem is the banks shouldn't have taken any charges at all so I suspect the government would argue that the banks were at fault and that legislation is in place to protect your benefit payments, mind you the government never advertise this fact nor do they ever seem to tell the banks off for ignoring it.
Just cos I point out what the law says and how benefit legislation applies doesn't mean I agree with it or that I am defending it and I am certainly not having a go at you or saying you are wrong.
You might well win at tribunal I don't know, after all this is sometimes how legislation gets changed which then sets a precedence for future benefit claims, but initially it will be looked as capital sorry.
ali x

[stephen81]

Don't forget as well that although you need to tell them about your capital, it will only affect your claim if your capital exceeds the threshold (currently £6k if you are working age). Even if you do exceed the capital threshold, if I understand correctly (and I may well be wrong) the tariff income is only £1 for each £250 over the threshold. So for example, if your capital is currently £0, you could get a bank charges refund of £6500 and only have £2 less on your benefit. Like I say though, I could easily be wrong there. I do work in that area of a local authority but I'm not directly involved with Benefits so I'm certainly not an expert.

[alibobsy]

Stephen you are right with that, so it would take having over 16k to wipe out the benefit.
ali x

[JunkiMunki]

hiya all, no have not taken offence by what anyone has said, after all everyone is entitled to their own opinion, which is how and why this forum exists, I myself am on "SDA" + "DLA" and my husband is on LT Incap once again, [dont ask why you would not want to know or would reach for the VALIUM BOTTLE] bit we receive no Income support, or housing benefit, or qualify for free prescriptions, as the 20p Income support we used to receive once a fortnight [YES !!!!!!!!!!!!!!!!!!!! I did say 20p per fortnight ] has now stopped because of the increase in my allowance of 45p, so this has now taken the right to free prescriptions away from us, we do not get Housing benefit, as we have to pay a mortgage which we do not qualify for any help with at all, and we have just been declined a Interest free loan off the DWP , that was for a deposit on changing my existing obsolete 25 year old fire and backboiler, for a combination boiler as the parts required for old one are obsolete, I had a visit from the Warm front team[ cavity wall insulation thru GOVERNMENT, certain benefits entitle you to 100% cavity wall and to other help, after an assessor came I was suprised to be told that the Government would allow me a grant for this work due to my DLA only this was a qualifying benefit, Incap + sda not entitled, so went ahead, pleased to read Government gave me a grant of £2,700 towards the work, which left a deficit of £650, sent all paperwork to DWP in connection with a loan and was told the benefits we are on do not give us this entitlement, so rang warm front told them I could get a proper Corgi REG plumber to do the work for £2,200 max Quote their reply" Sorry but you have to use the contractors we supply", so I was granted this huge amount of £2,700, but cannot use this as I have not got the deposit of £650. give in one hand and take back in the other !!!!!!!!!!!!!!!!

[chocolatte]

This is just wrong, did the benefits agency take into consideration that the clamant was being fleeced at the time of their application and reflect their low income because of bank charges every month?