The capital rule is a British rule for determining eligibility for social security benefits. The means tested social security system in the United Kingdom has always operated an eligibility test for savings. The Poor law required claimants to be destitute but there does not appear to be any documentation about how the test of destitution was applied. The great increase in home-ownership during the twentieth century in the UK necessitated detailed rules about how a claimant's capital should be treated. Since at least 1948 the value of a claimant's home has been disregarded in assessing their resources.
Capital has always been assessed on a household basis, that is jointly for a couple, whether or not married. The capital of any dependent children is normally disregarded.[1]
The National Assistance Act 1948 (11 & 12 Geo. 6. c. 29) established that the value of the claimant's home should be disregarded, as were war savings and up to £375 in savings. Capital in excess of £50 but below £375 was treated as generating an income of six pence per week for each £25.[2]
Under the Supplementary Benefit scheme, introduced in 1966, the detailed rules were not published, but in 1980 it was put on a statutory footing with the publishing of detailed regulations. The capital cut off was originally established as £2000.[3]