CCM8430 - Closing the Examination: Review of Means position

If a claimant tells you he or she cannot meet a contract settlement you should review their financial position with some care. You should use the Income and Expenditure form available on SEEs to obtain these details.

Where both parties of a couple are being asked to meet a settlement you need to obtain details of the income/means for both of them and this will cover:

• the family’s current income and out-goings
• all assets and liabilities in the name of the family
• details of any likely alterations in the next 12-24 months, for example the maturing of an endowment policy or a child leaving school.

If, however, only one of them is liable to meet the settlement or if only one person made the claim, then ideally you should still obtain the household details and from this you should be able to ascertain how much they can afford to pay. However, if the person who is required to meet the settlement is only prepared to give their own income details, then we can only take into account their share of the out-goings.

For example, Tina Brown has been found to have made an incorrect claim because she did not disclose that she was living with Darren Grey. The over-paid credits will be repayable in-year as Tina was never entitled to make the claim as a single person and there will also be a penalty payable. Darren and Tina each bring home £1,000 and £500 per month respectively. Their expenses are £900 of which Darren meets £650 and Tina £250. On looking at the means to meet Tina’s settlement you should either look at:

£1,500 - £900 = £600, or

£500 - £250 = £250.

In this example there will obviously be a better result by looking at the total household income but it depends on how they wish to handle this. You can look at the total household income if they are willing to meet the debt between them. If Tina states that she cannot or will not provide all of the household details then you will only be able to take into account her share of the income and expenses. However, the greater her partner’s income is, the larger we will expect his contribution to the expenses to be (although this might not actually happen in practice) and this means that Tina will be left making a lesser contribution.