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  • damo73
    hi,
    take this as gospel as i work in DWP for Income Support (IS). you have to declare all capital ie savings, bank, building society and post office accounts when u make a claim. its fruad if u don't.
    you can have £16000 pounds in savings, but anything over £6000 is taken into account at the ratio of £1 off your personal allowance (PA) for every £250 over the £6000. IS will also pay the mortage interest but there is a qualifing period.
    hope this helps

    Damo
    IS Decision Marker
  • Gazella77
    Damo, thanks, I don't think I will qualify for income support anyway.

    So this mortgage free flat abroad will be treated as capital, right? As I said I bought it for £10.000 and it's worth around £20.000 - £25.000 now.
    The flat I bought here has got a mortgage for another 24 years, currently £720 a month, raising to £740 next year. So it's huge for me :-(
  • Gazella77
    and also maybe you can help me with this:

    my brother, who lives with me lost his job and went to job centre to find out if he can claim anything. He came back saying he could get some housing benefit but I would have to claim it as the property is in my name.
    But I don't want to have any troubles in future, with my current salary I am not entitled to any help, and my brother contributes to the bills only. It even crossed my mind that he can be treated as a part of my household. But in reality he only sleeps here, we do not share anything else, not even food . He can't afford renting so I agreed to have him here.
  • lucia15
    Hi again Gazella. With regards to your 2nd property abroad, an independent valuation would be done. Any outstanding mortgage amount would be deducted, and the remainder treated as capital.

    To your other query, your brother is unableto claim HB as the property has no rent liability as you own it. He cannot rent from you as he is classes as living with a close relative. I assume that you are the council tax payer so neithr would he be able to claim council tax benefit. You could claim 2nd adult rebate (contact your local Housing Benefit office). For this, all you need to do is complete a claim form and provide proof of your NI number. No proof of your income and capital is required. An assessment would be done on the income your brother has (if any), and you would receive a rebate of up to 25% on your council tax bill.
    As for your brother claiming Jobseekers, etc, it depends how he left his last job, ie, was he made redundant/sacked? If he was sacked, JSA can be sanctioned from 1-26 weeks so he would need to contact his local DWP office to discuss his circs.

    Lucy, HB Assessor.
  • Gazella77
    Thanks Lucy,

    there is no remaining mortgage on a foreign property, as I was working in 3 posts, evenings and weekends to pay it off and have it off my chest, now I can see it wasn't worth it :-(

    Yes, my brother has just brought paperwork for 2nd adult rebate, so we'll do that.
    I just hope it won't affect me in future, and I hope his income, however low, will not be taken into account when I make any claims in future.

    Thanks so much for all the info.
  • bestpud
    I may be wrong but I think the confusion is because people on here do not know what you will be claiming.

    If you are going to continue working and claim tax credits only, then it will only be the interest you earn on any savings (well, if it is over £300 a year) that will be taken into account. Plus, for tax credit purposes, money in an ISA account does not count as income.

    If on the other hand, you won't be working (or think you may not be) and you will be applying for income support and council tax benefit etc, then the £6000 savings rule comes into play.

    You have to declare savings for both - it is just treated differently.

    Does that ease the confusion a bit?
  • Gazella77
    Thanks, it does.
    I guess I am the one causing confusion as I don't know what to do after 6 months of my maternity. I am afraid that what I earn working full time is not enough for my mortgage (740)+ child care costs (around 800) and was trying to find out what I can be entitled to if I go back to work part time. My savings won't last me long obviously with such expenses

    I guess I need to wait for the baby and then claim and get more advice because for now the offices can't help me.
  • kilos
    Much Confusion
    Read this topic with great interest. Some say you only declare the interest made on the savings but the expert Benefits Advisor state all accounts to be declared, otherwise its fraud; others say, savings don't effect tax credit.

    I recently fell on my feet, thanks to a Premium Bonds win and now have a total of £21,000 savings, would this effect my Tax Credit 2008-2009 application ? my status is married, 3 children under 18 and job annum pay of £19,000.

    OR

    If I decided to pay my mortgage off £13,000 leaving me with £8,000 savings left, will the Inland Revenue see it as, trying to lower my savings, so I would qualify for better Tax Credit ?

    Basically if keep the savings, what effect will it have ? If I pay mortgage, what effect will it have in April Tax Credit renewal.

    Got to say, I am only in this situation, thanks to a lucky win, can't even a get £10 on the lottery. Thats why Tax/Working Credit is very important to me and my family; as its been a life and bread line.

    Another question, if the lowest saving amount is £6,000 before it effects your application, then surely you are allowed to deduct this £6,000 from any savings total, as it does not count; they are allowing you this, before some sort of calculation is done to work out your Tax Credit, as stated in previous post £6,000 - £16,000 bracket; they must be giving you £5,999,99p grace.
    Therefore in my case my total savings would be £15,000 am I correct in saying this. Thanks!
    Last edited by kilos; 27-01-2008 at 4:26 PM.
  • Gazella77
    Wow! Congratulations Kilos

    From what I learned here probably now this would be treated as your capital. Maybe try to leave 6000 and pay the rest into your mortgage? At the end of the day you are trying to lower your debt but I am no expert here.

    I also thought of using some of my savings for the mortgage but am really scared of being left without some emergency money.
  • bestpud
    Read this topic with great interest. Some say you only declare the interest made on the savings but the expert Benefits Advisor state all accounts to be declared, otherwise its fraud; others say, savings don't effect tax credit.

    I recently fell on my feet, thanks to a Premium Bonds win and now have a total of £21,000 savings, would this effect my Tax Credit 2008-2009 application ? my status is married, 3 children under 18 and job annum pay of £19,000.

    OR

    If I decided to pay my mortgage off £13,000 leaving me with £8,000 savings left, will the Inland Revenue see it as, trying to lower my savings, so I would qualify for better Tax Credit ?

    Basically if keep the savings, what effect will it have ? If I pay mortgage, what effect will it have in April Tax Credit renewal.

    Got to say, I am only in this situation, thanks to a lucky win, can't even a get £10 on the lottery. Thats why Tax/Working Credit is very important to me and my family; as its been a life and bread line.

    Another question, if the lowest saving amount is £6,000 before it effects your application, then surely you are allowed to deduct this £6,000 from any savings total, as it does not count; they are allowing you this, before some sort of calculation is done to work out your Tax Credit, as stated in previous post £6,000 - £16,000 bracket; they must be giving you £5,999,99p grace.
    Therefore in my case my total savings would be £15,000 am I correct in saying this. Thanks!
    Originally posted by kilos
    It is only any interest you earn which will count as income if you are working and claim tax credits as a top up. You still have to declare the savings BUT they will only count any interest over £300 per year.

    I don't think it makes any difference at all whether you pay off some of your mortgage, except you will earn less interest on the smaller amount. I'm pretty sure you wouldn't be penalised for it but you could ring the helpline and make a general enquiry?

    It is not the same as being unemployed and claiming benefits instead. Then you have to abide by the £6000 rule and possibly would be guilty of reducing your income for benefits purposes if you got rid of some. And with that amount, you would likely lose your benefits and be expected to live off the money.

    In your situation, the money itself will make no difference - only the interest you earn on it. So you do have to tell them you have it but it is unlikely to affect your award by much, if anything.
    Last edited by bestpud; 27-01-2008 at 4:55 PM.
  • Gazella77
    and Kilos go to mortgage free wannabe sub forum, they will advise you when and how best to pay off some of your mortgage, and I'm sure they will tell you it's best to have 3 000 put aside in ISA as interests on most ISAs are higher than mortgage interests.

    Good luck :-)
  • kathobbo
    if on benefits and receive compensation cheque will it affect benefits
  • teddyboy02
    need info please as at end of tether with worry....
    Hi All,

    In need of as much info and advice as possible due to being contacted by the DWP Fraud Officers who allege I did not inform them of monies paid out when medically retired from work.

    I wrongly believed that you were allowed up to approx 14-16k in savings/redundancy payments without having to declare it as this would not effect any claim for Income Support,Council Tax benefit and help with Mortgage payments????
    After receiving my redundancy which was approx 14k i paid off various creditors, some money loans from family members and had a family holiday too,I was left with approx 9k in capital.

    As of yet i do not know how much i have been overpaid but the little money i do have from my redundancy is now approx 6-7k and has been for last couple of years.

    If found guilty of deliberately and calculatedly defrauding the system what is most likely to be the outcome re punishment other than the obvious repayment,court case,poss criminal record and fine etc....???

    My biggest fear is that i could be jailed which would devastate both myself and my family and most probably leave them homeless and fighting to pay off unaffordable debts without me to help.

    Would it be a good idea to try and get some legal advice in this field too so that i at least have a chance to put forward my side and try to reason as to how and why this genuine mistake occurred??



    many thanks.

    any informative reply good or bad would be appreciated.
  • rogerblack
    After receiving my redundancy which was approx 14k i paid off various creditors, some money loans from family members and had a family holiday too,I was left with approx 9k in capital.
    <snip>

    As of yet i do not know how much i have been overpaid but the little money i do have from my redundancy is now approx 6-7k and has been for last couple of years.

    If found guilty of deliberately and calculatedly defrauding the system what is most likely to be the outcome re punishment other than the obvious repayment,court case,poss criminal record and fine etc....???
    Originally posted by teddyboy02

    Addressing only the overpayment for the moment, and assuming you did this solely to obtain more benefit. (this will be the DWP argument)

    The first issue is that money given to others when you absolutely don't have to, or unreasonable spending may result in you being treated as if you still have that money.

    'Absolutely have to' - means that debtors are at the point of calling debt collectors.

    Assuming that 4K of this early spending is 'unreasonable' spending that you diddn't have to do, that means you have 4K of 'notional capital'.
    This is added to your actual capital.
    Assuming none of the spending more recently (the 2-3K) was not on reasonable essentials, and is not disputed, this means that you are treated as if you have had 9+4=13K at the beginning of the period, and 6+4=10K at the end.

    13K will knock 28 pounds a week off means-tested benefits (13000-6000)/250), and 10K 16 pounds.

    A simple calculation would be (say) 28*52+16*(3*52) =around 4000.

    But, unfortunately, IS and CTB are treated separately in the calculations, so this increases your overpayment. (the CTB overpayment can't be as large, as it's at a maximum of your CT per year)

    Then you get into the more complex bits.
    The 'notional capital' (seperately for each benefit) is diminished by the amount your IS (for example) would have been reduced if you'd informed them.
    So your 'notional capital' reduces initially by 1456/year for IS, and by the full amount of your council tax for CT.


    The calculation that needs to be done for your actual overpayment per week is something like:

    date actual notional total effect overpayment

    01/01/2009 9000 4000 13000 28 28
    07/01/2009 9000 3972 12972 28 56
    14/01/2009 8700 3944 12644 27 83

    For both IS, CTB, and any other means-tested benefits you are entitled to.

    This is one half of the equation. This is an idea of how to compute the actual overpayment.
    (the 9000-8700 on 14/01/09 is an example if you'd bought a washing machine after your old one broke, it's an allowed expense)
    It's important that this is done correctly - as it will reduce dramatically the overpayment.

    _However_.
    The other, equally if not more important side is your state of mind.
    http://www.dwp.gov.uk/docs/dmgch52.pdf - you really need to read the bits that apply to you - specifically 52815 and on.

    52840 - 'you do not deprive yourself of capital for the purpose of getting more benefit if you did not know that it would affect your benefit'

    (this would be about the initial funds you gave away, and any major spending) It means that if you can get them to accept that you did not know, any overpayment is limited to the amount your benefit would have been reduced by your real capital.

    (so, in the case outlined above, it would start out at 9000-6000/250 = 12 pounds/week)

    Proving this is going to be hard.
    Were any of the debts at the stage of debt collectors?

    The overpayment looks like it's going to be several thousand pounds, certainly over 2.
    This is over the threshold for prosecution.

    I would strongly advise reading the above documents section on notional, actual capital, and deprivation several times - most of it can be skipped, as it's about stuff that doesn't affect you like vaccine damages and stuff.

    And yes, this is a time when a solicitor would be a good idea.
    You need to find one that understands benefit law.
    If they can't answer (roughly) 'what is deprivation of capital as it applies to means tested benefits' with more-or-less what the document above outlines, consider a different one.

    To recap.
    There are two separate strands.
    First, properly compute the actual amount of overpayment.
    This has two values, depending on if notional or only actual capital is used - this depends on if you can convince the DWP of your foolishness and normal honesty.

    The second is related to the first - if you can convince them that you've been honest - you are due perhaps to repay 2500 pounds (I've not done the sums), with no prosecution.

    If you can't, you will need to repay perhaps 4500, and prosecution is a possibility.





  • royalmail
    redundency
    i have just lost my job and have been paid over 36k redundancy. i was told that when i claim any benifits they would only take notice of anything over 30k. i was made reduntant due to the site closing.
    can some please tell if this is true as i have to see the job centre people on monday.
    thanks for any help
  • pmlindyloo
    i have just lost my job and have been paid over 36k redundancy. i was told that when i claim any benifits they would only take notice of anything over 30k. i was made reduntant due to the site closing.
    can some please tell if this is true as i have to see the job centre people on monday.
    thanks for any help
    Originally posted by royalmail
    Providing you have paid the correct class of NI contributions over the past two years or so you will be able to claim contribution based Job Seekers Allowance for 6 months.

    This is not means tested and your savings/redundancy money will not affect this benefit.
  • xylophone
    "i was told that when i claim any benifits they would only take notice of anything over 30k. i was made reduntant due to the site closing. "

    Are you confusing benefits with tax? http://www.hmrc.gov.uk/guidance/redundancy-factsheet.pdf

    http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy/DG_182503
  • skintandscared
    i have just lost my job and have been paid over 36k redundancy. i was told that when i claim any benifits they would only take notice of anything over 30k. i was made reduntant due to the site closing.
    can some please tell if this is true as i have to see the job centre people on monday.
    thanks for any help
    Originally posted by royalmail
    Dare I suggest that maybe your 36k will be enough to pay the bills until you get another job....
    DMP Mutual Support Thread member 244
    Quit smoking 13/05/2013
    Joined Slimming World 02/12/13. Loss so far = 60lb in 28 weeks 18lb to go
  • royalmail
    you are right 36k would pay the bills till i get a new job but i'm going through a divorce, they say things come in 3's i'm just waiting for the next problem to turn up. so i'm losing house and all that go's with it so i will have to rent or it would be nice for the council to house me so i can have the kids over without spending all my redundancy as that is all i have.
  • HappyMJ
    you are right 36k would pay the bills till i get a new job but i'm going through a divorce, they say things come in 3's i'm just waiting for the next problem to turn up. so i'm losing house and all that go's with it so i will have to rent or it would be nice for the council to house me so i can have the kids over without spending all my redundancy as that is all i have.
    Originally posted by royalmail
    Use your 36k to buy your partners share of the house. The money would then be excluded from your capital calculation as the house you live in is always excluded.
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