Save money on benefits, tax credits, low income

sammy30

as a new single parent of 3, i didnt want to claim income support so i got a job(18 hrs per week) and i have put in a claim for tax credits.they were very quick to sort out my claim and very helpful on the phone. They even pay towards my childcare!

Zweiblumen_2

All of the above is great advice and I feel I should add my little bit, gained from experience:
My wife had to give up work 2 years ago due to ill health and I had to give up work to look after her at the time, we went to CAB to make sure we were getting everything we were entitled to, we weren't but they helped us apply, they also helped us appeal against decisions made by DSS & DWP which we won. They also helped us fight the local Council when they threatened to evict us for non-payment of rent due to the prolonged delay in the award of benefits. A year or so back my wife was well enough for me to find some spare time and I went to work for CAB, boy do you see some horror stories, and they covered any out of pocket expenses. I now have a job working for a local charity (10 hours a week) and keep a close eye on what happens to the benefits. Although I've looked at the program Martin recommended a few weeks ago the program I use is Microsoft Outlook, I enter all the regular bills into the calendar as well as all of the benefit payments so you can see what's going on.

One tip: benefits are paid every 7/14/28 days and direct debits go out monthly, watch out in case things go too far out of step. See if any payments can be switched to standing orders set to go out just after benefit goes in, that way there's less chance you'll get caught out.

Don't know if any of this would be of help but thanks for reading it.

Fran

Zweiblumen,

Your opinions and experience are interesting! Everyone has something different to say, even about the same experience.

dag_2

Lots of good advice.

Make sure you prioritize things. Firstly, a roof over your head (your housing situation), gas, electricity and water etc. and things like court fines which if you don't pay could land you up in prison or with hefty fines.

Agreed. And ...

don't be tempted to spend on credit cards and get more expenses to pay out

Agreed too. But it's a good idea to use unsecured credit to clear priority debts, if you're in a position to be able to do it.

Of course, it depends on the circumstances - you don't want to pay more interest than you have to. But risking eviction for rent arrears for want of the interest on the credit card cash advance is a very bad idea. There's no guarantee that your housing benefit will be sorted out in time to save you from eviction. So take the advance to pay the arrears if you can, and then try to take advantage of a promotional balance transfer deal on another card - it makes things much simpler.

Get any debts you already have under control (C.A.B. can also help with these or there may be a free debt help phone or centre in your area.)

I agree with that too - however, one common criticism of CAB debt advice is that they sometimes make bankruptcy appear to be easier than it really is. In particular, they tend to assume that it's as easy to get council accommodation today as it was in the 1950's, and they don't always explain the impact that bankruptcy or IVA's may have on your accommodation if you're not a council tenant.

If you own or have a mortgage on your home, you will lose it. If you are in private rented accommodation, your tenancy agreement probably gives your landlord the right to evict you with two weeks' notice if you are made bankrupt or have an individual voluntary arrangement - and this may apply to housing association accommodation too. You're only really safe from bankruptcy-triggered eviction if you're a secure council tenant.

Homeless hostels are grim places - risking eviction for the sake of a few quid really isn't worth it. It's difficult to get private rented accommodation when you're on benefits, especially in London, unless either (a) you have a property-owning guarantor, or (b) the available credit on your plastic is big enough for you to pay a deposit of six month's rent before you move in.

Being homeless actually shortens your life expectancy by more than being in prison - though I wouldn't recommend doing anything illegal to pay your rent. That's because it's easier to go from the streets to prison than from the prison to the streets. Keep your options open, and don't start doing illegal stuff until you're actually homeless.

One tip: benefits are paid every 7/14/28 days and direct debits go out monthly, watch out in case things go too far out of step. See if any payments can be switched to standing orders set to go out just after benefit goes in, that way there's less chance you'll get caught out.

That's a good point - mind you, many utility companies give you discounts for paying by direct debit, which you don't get by paying standing order. And if you have credit card debts, it's a good idea to pay the minimum by direct debit, so you don't incur penalties for forgetting.

Although you can't usually get direct debits on 14 or 28 day cycles, you can usually set a preferred monthly date for your payments. For example, you might try to set your lender and utility payment dates so they are spread out roughly evenly through the month. Or you could have them all in one go, to simplify budgeting.

I'll try to explain my own example - sorry for the wordiness. I pay my rent monthly by standing order, but I'm on benefit, and my housing benefit is paid every 28 days. My rent is bigger than all my monthly utility and credit card payments added together, so I have set their payment dates to be half a month out of phase with my rent. This means that I only have to check that there's enough money in the bank account twice a month - once for the rent, and once for everything else - and I don't have to stress constantly about the next payment. Any extra gets paid to the credit cards.

My authorised overdraft is cheaper than my most expensive credit card. I want the balance on that card to be as low as possible, so I try to keep my overdraft as close to maxed as possible, without going into unauthorised overdraft. So I try to keep the current account balance fluctuations as small as possible - and the best way to do that is to have the monthly rent half a month out of phase with everything else.

Admittedly I do all my grocery shopping on the credit card. It's not ideal. I know I might be able to save a few pennies on interest by paying cash instead, but I think I'd be much more likely to bounce my rent as a result. I don't want to run that risk, because I'm on an assured shorthold tenancy, and my landlord can have me out with two months notice for no reason whatsoever - so I will pull out all the stops to keep my rent up to date. Besides, the difference between the interest rates of my overdraft and credit card is so small, that paying cash at the supermarket is hardly worth it.

In theory, I could get my housing benefit paid directly to my landlord - but I think that would be a bad idea. Why? Because if you're a private tenant whose rent is paid directly to the landlord, and you have a change of circumstances that results in housing benefit overpayment - such as getting a job - then the council can bill the overpayment to your landlord - and your landlord is allowed to call it "rent arrears" and evict you for it.

You don't get that problem if you're a council tenant. They can add council tax benefit overpayments to your council tax account, but they cannot add housing benefit overpaments to your rent account - they must bill you separately for it. They can evict you for rent arrears, but NOT housing benefit overpayments.

But this doesn't apply to private landlords who have received direct payments. The only way to eliminate the risk of overpayment-triggered-eviction is to receive housing payment benefit yourself. The council can't bill your landlord for overpayments if you never authorised your landlord to receive direct payments from the council in the first place.

Sorry that's all a bit wordy, but I hope it helps someone.

Fran

But risking eviction for rent arrears for want of the interest on the credit card cash advance is a very bad idea.

There are often ways of sorting this out without having to pay interest on a credit card - you should take advice on this.

If you own or have a mortgage on your home, you will lose it. If you are in private rented accommodation, your tenancy agreement probably gives your landlord the right to evict you with two weeks' notice if you are made bankrupt or have an individual voluntary arrangement - and this may apply to housing association accommodation too. You're only really safe from bankruptcy-triggered eviction if you're a secure council tenant.

I'm not sure what you are referring to here. Housing payment arrears? Everyone should check their individual tenancy contracts - this advice does not necessarily apply.

and don't start doing illegal stuff until you're actually homeless.

This site does not condone any illegal activity.

For example, you might try to set your lender and utility payment dates so they are spread out roughly evenly through the month. Or you could have them all in one go, to simplify budgeting.

Personally I wouldn't recommend having everything on direct debit if you are on a really tight budget. Sometimes the unexpected happens and you might need the cash where a bill for gas eg. could wait 2 weeks.

I'm on an assured shorthold tenancy, and my landlord can have me out with two months notice for no reason whatsoever

Is this true? It depends on the contract.

In theory, I could get my housing benefit paid directly to my landlord - but I think that would be a bad idea.

However this might be a good idea for people who might otherwise spend their rent.

and your landlord is allowed to call it "rent arrears" and evict you for it.

I don't see that this can be the case if your rent is up to date.

But this doesn't apply to private landlords who have received direct payments. The only way to eliminate the risk of overpayment-triggered-eviction is to receive housing payment benefit yourself.

There isn't such a thing as "overpayment-triggered-eviction"! You have either paid your rent or you haven't!

chinagirl

Fran wrote:

Filigree -

I would budget for christmas etc. if I knew that nothing was going to crop up all year and that I wouldn't have to dip into the christmas savings anyway. The trouble with being on benefits is that often you have no savings, so no contingency for any item that might occur - sudden school trip, car repair, broken kettle. It just couldn't work for me as I'd end up without enough money in the account at some stage for a direct debit and then being charged. ??? The work I get is temporary contracts so there's never any guarantee when I'll get the next income. I do start buying christmas presents early though - about October/November - cos there's all nephews and neices to buy for...

I pay £30 a month to Home Farm Hampers, and get £300 worth of Choice vouchers, which can be spent practicularly in any High Street shop. You start paying at end of January and pay for 10 months, last payment being end of October. By that time I am used to paying out the £30 a month, so I feel I have gained £30 by not paying anything in November and December. As you can see, I pay no interest on this, and the money just would not be available to spend if I tried to save the equivalent in cash, as there is always something else to spend it on. I have done this for years now, and would recommend it. I am actually a small time agent for this particular company, and have a handfull of customers who just use it for the vouchers like me. If I get sales of over £1000 I earn a percentage commission, usually giving me a free month at the end of the term. It can be hassle chasing peoples money each month, but they know that if they dont pay, they wont get the vouchers, so not too much trouble. I try to get them to pay the money in cheque made out to the company, so I dont get tempted to borrow any of it.

Penny-Pincher!!

Hey There

We have recently just claimed Income Support (still waiting for confirmation!) basically because I am too ill to work. Hubby is my FT carer and we have a disabled daughter. Illness has worsened these past few months and just cant do it all at the moment. In a wheelchair, waiting for a stair lift and new shower/wet room to be done by the council. I will get there.lol.

Anyway, I found this website about 6 months ago but stayed dormant for a while :rolleyes: I started adjusting my life with alot of the great advice from this website and am so much better for it!

Financially, we are so much better off. I have snowballed our debts these past few months and have cleared so much of our debt :eek: I BT our last £3600 of debt to the new Sky card which is 0% with no fees etc till March 2006 last night. I have worked out our budget so that this will be fully clear by January 2006, then we are hoping to buy our conservatory in the sales Jan 2006 (should be about £2000, or may buy on ebay!)then will pay it up in full March 2006 when offer runs out.

I have even saved money on our groceries which I never thought possible-was an M&S and Waitrose Snob. I allocate £60 pw for food and £20 pw petrol, so every 4 weeks I move over the excess money to a high interest saving pot. We have cut down on using car/petrol, started and stuck to meal planning and NO Take aways and i have managed to save about £500 so far (only in past 16 weeks)-which is being saved up for our new conservatory in the new year! We eat very well and even allow 1 shop a month from Ocado/Waitrose if I can get the £20 voucher Find their meat excellent quality-so this normally is nearly all meat.

Have changed utility companies and saved £145 a year. Changed car insurance and saved £250+ and £80 on house insurance.

I know being on Income Support is going to be difficult, but we will live well-even on a budget!

Any other ways of saving????

Penny-Pincher!!