Sorry in advance for the long winded explanation. It’s rather a mess this one.
We have a client who was in receipt of IRESA, who came into some capital well over £16k (money, not property) in February of this year from an inheritance. She got the SDP on her claim as she was a PIP recipient.
She intended to use the money to purchase a house, which she did. She told ESA as soon as she got the money in Feb. They told her that her claim would be suspended until she had disposed of the capital, but that when she had spent the money on the house, her ESA could be reinstated. As there was no entitlement to CBESA, this appears to us to be incorrect advice, as the receipt of the capital terminated the ESA entirely, rather than suspending it. The only way back onto ESA then would be if she spent the capital within a month, in which case she could benefit from the SDP gateway rules and reclaim ESA as she would have had the SDP in the last month.
She was issued with a decision in February 2020 terminating her IS, but suggesting that the question of ESA entitlement could be revisited if and when she has spent the capital. Due to Covid-19, the house purchase was delayed and finally went through in late May 2020, so she had been without ESA for around 3 months at that point. She contacted ESA in late May and told them that she had capital under £16k and they reinstated her IRESA. They then realised that perhaps they shouldn’t have and a couple of weeks later, they terminated ESA again.
The further complication in all of this is that she continued to receive HB throughout (including the SDP) and continues to do so.
She only came to us for very recently. We have informed her of her duty to inform HB of the change in circs – she seems to have been given some misleading advice about her duties in this regard by the DWP (I think someone got confused about the rules where capital from the sale of a previous property in which a claimant lived can be disregarded if it’s earmarked for the purchase of another property).
Our advice was to make a claim for UC, as she was not entitled to reclaim legacy benefits (because although she had been paid HB including the SDP in the last month, she was not in fact entitled to it since February). As far as we were concerned, being entitled to a benefit including the SDP means being entitled to a benefit including the SDP, not being ‘wrongly paid’ a benefit including the SDP.
She has now tried to claim UC, but the UC system isn’t allowing her to, because it’s saying ‘you get the SDP, or did get it in the last month’ (which she did, wrongly, in respect of both ESA and HB, so she got it but wasn’t ‘entitled’).
So, my question is this. If she now reclaims ESA and is awarded it, is the claim valid even though it should never have been made, because she should have never been gatewayed out of UC? In other words, can the whole ESA claim be invalidated by a subsequent conclusion that the client should have claimed UC, or can the question of entitlement to ESA be divorced from that (as she fits all the other criteria at present – incapable of work, no other income, no capital etc.), allowing her to remain on ESA?
Bit of a rock and a hard place.