For every additional £500 worth of capital over £6000 (£10000 after November 2009), the DWP will add £1 to your income. The DWP lists what
should be counted as capital-
- all money held in either cash or bank account or savings scheme;
- lump sums or one-off payments;
- investments such as businesses, life insurance policies, stocks and shares;
- a beneficial interest in the capital of a trust;
- property (except the dwelling occupied as the claimant's home which is disregarded).
If you are a member of a couple then your partner's capital will be taken into account when working out entitlement.
When valuing capital the DWP will deduct 10% from current market value if there are costs of sale.
Capital that will be disregarded.
Capital that is disregarded indefinitiely;
- annuities which are defined as fixed sums "payable at specified intervals for a premium paid either by instalments or in a single payment and normally
taken out to provide an income in retirement". Annuities are only ignored when determining deemed weekly income;
- One-off age-related payments;
- The assetts of a business if the claimant owns some or all of the assetts and works in the business as a self-employed earner. Business assetts will
be disregaded for a reasonable period to allow them to be sold if the claimant owns some or all of the assetts and has stopped working in the business as
a self-employed earner;
- Bank charges or commission that a claimant has to pay when changing foreign capital into sterling;
- lump sums that are payable when a claimant has deferred his or her entitlement to the state retirement pension;
- the value of the house that you live in. This can still be disregarded even though the property is not occupied for a time provided that you intend to
return to live there. In some circumstances the value of a second home can also be disregarded but the value of a property bought as an investment
opportunity, a weekend retreat or a country cottage will not be disregarded;
- the value of a funeral plan contract;
- any future interest in capital;
- the surrender value of any life insurance policy which is still in force;
- any investments which include some life insurance so long as the agreement states how payment on death is worked out;
- the value of the right to receive income under a life interest or from a life rent;
- the amount of any payment made to you or you partner as a result of any personal injury. Any amount awarded for personal injury which is administered
by the courts or by a trust is also indefinitely disregarded;
- any payment made by the Secretary of State after 1.2.2001 for the internment or imrpisonment of
- you; or
- your partner; or
- your deceased spouse or deceased civil partner; or
- your partner's deceased spouse or deceased civil partner;
by the Japanese during the Second World War;
- any trust payments made to persons diagnosed with variant Creutzfeld Jakob disease. This disregard only applies during the lifetime of the person with
variant Creutzfel Jakob disease;
- the value of the right to receive income from an occupational pension scheme or a personal pension or under a retirement annuity contract;
- all personal possessions such as clothing, jewellery and cars;
- the value of any premises which are lived in by a close relative who is over 60 and incapacitated. A close relative is defined as a parent,
parent-in-law, son, son-in-law, daughter, daughter-in-law, stepparent, stepson, stepson-in-law, stepdaughter, stepdaughter-in-law, brother,
brother-in-law, sister, sister-in-law, grand parent, grandchild, uncle, aunt, nephew or niece. The term "incapacitated" is not defined- the DWP suggests that
those in receipt of (or who qualify for) any of the disability benefits should indicate incapacity;
- the value of any right to receive rent except where you or your partner have a reversionary interest in the property for which the rent is due;
- any payment to compensate for the fact that you or your partner or your deceased spouse or deceased civil partner or your partner's deceased spouse or
deceased civil partner:
- was a slave labourer; or
- was a forced labourer; or
- had suffered property loss; or
- had suffered personal injury; or
- was a parent of a child who had died.
during the Second World War. This disregard does not apply to payments of War Disablement Pension or War Widow's Pension;
- any one-off payments made from the Independent Living Funds;
- any one off payment made from the Macfarlane Trusts, the Fund, the Eileen Trust, the Skipton Fund or the London Bombings Relief Charitable Fund;
- the value of property held on trust provided that payments can be made from the trust to you or your partner (or both of you).
Capital that is disregarded for up to two years.
Any trust payment with regard to variant Creutzfeld-Jakob disease made to you or your partner if either of you are;
- a parent of a person diagnosed with Creutzfeldt-Jakob disease; or
- a person acting in place of a diagnosed person's parent; or
- a person who was acting in place of the diagnosed person's parent at the date of the diagnosed person's death.
Is disregarded for two years after the payment was made.
Any payment from the Macfarlane Trusts, the Fund, the Eileen Trust, the Skipton Fund or the London Bombings Relief Charitable Fund is disregarded from
the date of payment until two years after the death of the person concerned if you can show that the person is a qualifying person and has no partner or
child. In order to get this disregard you must show that you or your partner are the qualifying person's parent or step-parent or the person standing in
place of the parent and that the qualifying person is a child or young person under the age of 19.
Capital that is disregarded for a year.
The following payments are disregarded as capital for a year from when the payment was made:
- payments of arrears in benefits;
- payments of compensation for the late payment of benefit;
- payments in lieu of payment of benefit;
- payments made by a local authority in England and Wales out of money provided for by the
Supporting People Scheme;
- payments made in Scotland under housing support legislation.
- payments made under an insurance policy to compensate you for loss of personal possessions or damage to your home;
- payments made to for the sole purpose of buying somewhere to live or carrying out essential repairs or alterations to your home.
Capital that may be disregarded for up to 26 weeks.
The value of the following is disregarded for up to 26 weeks:
- The value of your home is disregarded if you have left it due to estrangement, divorce or the dissolution of a civil partnership from your former
partner. The period of disregard is either:
- 26 weeks from when you stopped living there; or
- for as long as it is occupied by your former partner and he or she is a lone parent.
- the value of your home if you have bought it but have not yet moved in. This may be due to the fact that an existing tenant or lessee is currently
occupying your home and you need to wait for the lease or tenancy to end before taking posession. This disregard lasts for either the 26 weeks after
you bought your home or for longer if the DWP considers it reasonable to extend the period.;
- the value of your home if you are taking reasonable steps to dispose of it, this is disregarded for a period of 26 weeks from the time you started to
try and sell it or for longer if the DWP considers this to be "resonable";
Capital that is disregarded for the duration of an award for Pension Credit.
Any payment over £5000 that you have received as arrears or concessionary payment as a result of official error in respect of:
- Attendance Allowance; or
- Constant Attendance Allowance; or
- Child Benefit; or
- Child Tax Credit under tax credit law; or
- Council Tax Benefit; or
- Disability Living Allowance; or
- Exceptionally Severe Disablement Allowance; or
- Housing Benefit; or
- Income Support; or
- Income-based Jobseeker's Allowance; or
- State Pension Credit; or
- the Social Fund; or
- any payment made with War Disablement Pension or War Widows Pension for exceptionally severe disablement or constant attendance.
