Welfare Reform Bill

Clause 16 provides that the income and capital of a person claiming employment and support allowance shall be determined in such a manner as prescribed in regulations. Subsection 3(a) of the clause provides that a customer may be treated as possessing income or capital which he does not possess. The measure is designed to prevent abuse of the system. For example, a person could deliberately spend all their capital in order to qualify for benefit or they could get close friends or family to hold it for them. That would clearly be unfair on others and would undermine the principles of a means-tested scheme. It enables us to say that they still have that capital and thereby not award them benefit. Similar provisions already exist within income support and other social security benefits. There is nothing new about this concept. It is absolutely right that the protection is there and, as is usual, customers would have a right of appeal to an independent appeal tribunal where the power was used. That is the provision’s purpose; it does nothing different from what is already in the regulations for income support, housing benefit, council tax benefit and other parts of the system.