Payment Protection Insurance

Jobless_Katie

Hi guys, this may be a duplicate, I'm not sure I posted my last attempt correclty! Can anyone help with this, I've recently been made redundant and am in reciept of JSA and Council Tax Benefit (after a fight!), I've got a Payment Protection Policy which will start paying out in January if I hav'nt managed to find another job by then, (fat chance the way things are looking!), will the benefit from the Payment Protection Policy be counted as income for the purpose of benefits? Do I need to inform anybody when this starts being paid to me? Any help would do, thanks

cw18

Is the payment protection for a mortgage, or is it for more than that?

If for a mortgage only, will it be paid to your lender or to you?

Jobless_Katie

The amount of benefit paid by the insurer is for more than the mortgage and is paid directly to me. thanks

cw18

from what I've read on here, if it only covers the mortgage AND gets paid to the mortgage provider, it can be shown to be for that and may be discounted.

If it comes to YOU but is intended to pay the mortgage, it can be more tricky.

If it's coming to you AND is for more than the mortage, then I suspect it may all be classed as income -- anything over and above the mortgage payment certainly will be.

Jobless_Katie

Thanks for that, it looks like I could be no better off for having paid my premiums for ppi for years and years! Oh well that's how the cookie crumbles I supose!:mad:

nissan25

For the purpose of JSA Income Based - if the ppi is paid to you directly you will have to prove how much and indeed that you are paying your mortgage payments with this.

The remainder will be taken against your entitlement of JSA as income. If this is over £60.50 p/w - you will have no entitlement to JSA and therefore may impact on your CT claim.

Be sure to report this as sometimes the insurance companies contact DWP.

Jobless_Katie

Thanks for that nissan25, my ppi will pay 260 per month, my mortgage payment is only 98 (I used my redundancy to reduce the balance) which will leave about 40 per week, will this then be deducted from JSA in effect leaving me with on 20 per week JSA? If this is the case as I have a flexible mortgage with the facility to draw down my overpayments would it be worth me drawing down funds to increase my mortgage monthly payment? I'm not trying to beat the system (much!) but as I have worked and paid my NI for twenty years and paid for ppi nearly as long I'm trying work out how to claim what's mine while I'm unemployed (hopefully not for long) without being more out of pocket than I am now

cw18

if you have more than £6k in capital that will reduce your means tested benefits anyway -- and more than £16k in capital will mean you don't get anything at all.

if your mortgage is at 4% (some lenders are), then £160/month repayments (interest only) would mean drawing down around £48k at a quick calculation !!

cw18

Jobless_Katie wrote: »

(I used my redundancy to reduce the balance)

Just re-read and this rings alarm bells.....

I was told I couldn't do this with my redundancy payment as it counts as "capital deprivation", and the amount I'd overpaid would still count against me as capital if I applied for any means tested benefits !!!

Jobless_Katie

Cheryl, I wasn't aware of any of that, I used the redundancy to reduce the balance before I made any claims and all I had to do was show proof that I had used the capital to reduce the mortgage balance and I also paid credit cards etc off to bring my capital to below the 6k (2k on a holiday - so what!) even so the CTB I receive has only just been awarded after 3 months of trying to claim as they did keep wanting to see bank and mortgage statements saying I had more than 16k! But that was more a case of the council staff's apparent inability to read the statements noting dates etc, but I got there in the end. As for my mortgage the rate is 5.89% fixed until 2012, I know it's comparatively high now but as I'm single and unemployed I've no chance of moving it, so it looks like I'm snookered!:eek:

cw18

call it 6% -- you'd still need to claw back £32k to increase monthy payments by £160

so as you say, you're snookered !!