The Embassy would not have issued me with entry clearance until they had a copy of a letter from Benefits Agency confirming she stopped claiming benefits.
That is certainly not the case now ... and I suspect was not legal when you where applying either.
Immigrants on temporary leave cannot claim any benefit either in their own right or through their spouses.
For a start "any benefits" is clearly not correct, if only because not all benefits are within the definition of Public Funds as in para 6 of the Immigration Rules.
And even for a benefit that is within the scope of that definition there is absolutely nothing to stop the settled sponsor of the visa applicant claiming benefits. But there are some caveats to take into account and for some type of benefits, as covered by para 6A of the Immigration Rules, it is not possible for the sponsor to claim
more benefit if the visa applicant actually makes it to the UK.
But for other benefit types, as covered by para 6B of the Immigration Rules, in detailed circumstances covered by underlying regulations, it is even OK for the holder of the visa with the "No recourse to Public Funds" restriction, to be the joint claimant.
For example, British spouse and non-EEA spouse with a time-limited visa .... OK to claim Tax Credits ... as detailed in reg 3(2), Tax Credits (Immigration) Regulations 2003 ... regulations laid under section 42 of the Tax Credits Act 2002 ... as specifically mentioned in para 6B of the Immigration Rules.
Jeff, if there was an illegal requirement for benefits legitimately claimable by a British Citizen to be relinquished ... maybe time to consider taking legal action to recoup the amount given up unnecessarily.
Finally Jeff, there is a lot of misinformation about this matter and it is sometimes even wrongly mentioned on the websites of British Missions ... even now.