Universal Credit claimant £50,000 better off after successful ‘capital limits’ appeal

3 October 2024

Alexander McColl, instructed by Nick Molyneux of Farleys, has successfully appealed a decision by the Department of Work and Pensions (‘DWP’) to recover £29,000 worth of Universal Credit (‘UC’) which had been paid to a disabled claimant over a 3-year period and a judge of the First-Tier Tribunal (Social Entitlement Chamber) has ordered that her benefit be reinstated and a backdated payment likely to be in excess of £20,000 be paid to her.

The challenge was brought after the DWP concluded that the UC claimant was over the ‘capital limit’ threshold. Under the UC Regulations 2013, a claimant is not entitled to any UC at all if they have ‘capital’ of over £16,000[1] and any benefit that has been paid during a time when someone was over this limit can be recovered by the DWP.[2] ‘Capital’ includes ownership of property which is not used as a main home.

In this case, the DWP made its decision based on the claimant’s part share in her family home, which she had been forced to leave as a result of her disability. The department assessed the value of this share by looking at an online estimate of the property’s value and dividing that by the number of owners. However, it did not consider the surrounding circumstances as to the actual market value of the share.

Over the course of two oral hearings and in detailed written submissions, Alexander was successfully able to argue that the DWP’s valuation was defective, that it had failed to follow its own guidance on calculating the market value of the claimant’s beneficial interest in the property and that the claimant had not been overpaid.

There are currently around 6.4 million people claiming UC.[3] The DWP makes tens of thousands of decisions about error and overpayment in the administration of these claims every year. But the rules are complex and, as in this case, the DWP does not always follow those rules. This case highlights the absolute importance of seeking advice and bringing a challenge where you think the DWP has got it wrong.

[1] Reg 18

[2] See The Social Security (Overpayments and Recovery) Regulations 2013

[3]https://www.gov.uk/government/statistics/universal-credit-statistics-29-april-2013-to-11-january-2024/universal-credit-statistics-29-april-2013-to-11-january-2024