Deposit for house has to be used before receiving any JSA?

BongoTheWhippet

Hi,

Recently made redundant and got some savings which we've put aside for the deposit on a house as first time buyers.

Filling in the contribution-based JSA claim form, the form asked if I'd got savings or property other than your place of residence. If I understand it correctly, if I had mortgaged myself up to the hilt with a barely affordable mortgage I'd have been able to stay in the property and get contribution-based JSA on top of the equity I had, but because we've been prudent and rented and built up a deposit, we have to use that to live before I can claim any benefits?

If so, this seems wrong on any number of levels. Can anyone explain?

Thanks

SmallEnglish

I was made redundant in September and I was confused by this when I applied for JSA because I also had been saving up for a deposit. I still got contributions-based JSA though. I think it's only if you are claiming income-based JSA that they take your savings into consideration.

Good luck job hunting!

redz

SmallEnglish wrote: »

I think it's only if you are claiming income-based JSA that they take your savings into consideration.

That's correct.

BongoTheWhippet

I see - thanks. So for contribution-based, no need to take savings into account.

however, it seems socially, economically and ethically wrong-headed to take savings for a house deposit into account for income-based JSA.

It is counter-productive for the government, counter-productive for the individual and sends out the wrong signals I think.

According to the logic of including house deposit savings for income-based JSA, I'd be better off buying gold soverigns (not investment, not counted as assets) and putting them in a safety deposit box and claiming no savings, or even rushing out and buying a small flat (on my wife's income) so that I can qualify for income-based JSA and mortgage relief if applicable.

No wonder this country is in crap - it deserves it. The government got us there with these reward-the-reckless, punish-the-prudent schemes.

It also leads me to conclude that a morally corrupt means testing system behoves morally corrupt responses! :T

briona

Hi Bongo

Welcome to MSE!

Assuming that you have made enough NI contributions for the past two tax years, you can claim contributions-based JSA (which is not means-tested) for 6 months. I believe you still need to declare your savings – they just won't be counted!

For means-tested benefits, savings of between 6K and 16K mean that for every £250 of savings or part thereof, you lose £1 of benefits. If you have savings of over 16K, you are not entitled to means-tested benefits.

Briona

briona

Now, playing Devil's Advocate...

BongoTheWhippet wrote: »

however, it seems socially, economically and ethically wrong-headed to take savings for a house deposit into account for income-based JSA.

...you could argue that if savings for a house deposit were not counted for the purposes of claiming means-tested benefits, everyone with any form of savings would claim that it was for a house deposit. And the benefits system would be stretched to breaking point, as people who could be supporting themselves would be allowing the State to do it instead.

And to put it bluntly, whilst on benefits you will not be able to afford to buy a house anyway, or get a mortgage, so the deposit is no longer essential.

BongoTheWhippet wrote: »

According to the logic of including house deposit savings for income-based JSA … or even rushing out and buying a small flat (on my wife's income) so that I can qualify for income-based JSA and mortgage relief if applicable.

Assuming you have no kids, if your wife earns more than £94.50pw, you won’t qualify for income-based JSA anyway, as that is the figure that the Government has decided that a childless couple needs to live on each week.

Briona

BongoTheWhippet

...you could argue that if savings for a house deposit were not counted for the purposes of claiming means-tested benefits, everyone with any form of savings would claim that it was for a house deposit.

Not quite.

I'm talking about the cost-benefit of having savings. You save for a rainy day, but if you don't save (and blow your savings on holidays, TFT televisions and going down the boozer) you get rewarded with income-based JSA. In addition, if you own a house already, the equity you have in your house does not count towards income-based JSA means testing - you've banked that money!

This fact alone effectively redistributes wealth away from the asset-poor to the asset-rich. For this reason alone, the income-based JSA means testing system is socio-economically corrupt.
No wonder there are so many benefits cheats - the income-based JSA system deserves them! :eek:

ceridwen

I believe that if one sells a house one already has - that you are allowed to hang onto that money for the purposes of purchasing another house for a certain amount of time (ie without it being taken into account). I dont know what that amount of time is though - and whether it would apply to house money BEFORE it has actually been used for that purpose - worth checking up I guess.

But - right now - I guess you have 6 months leeway in which you HAVE to get some job/somehow to make sure that you definitely can hold onto your house savings. Good luck.

BongoTheWhippet

ceridwen wrote: »

I believe that if one sells a house one already has - that you are allowed to hang onto that money for the purposes of purchasing another house for a certain amount of time (ie without it being taken into account). I dont know what that amount of time is though - and whether it would apply to house money BEFORE it has actually been used for that purpose - worth checking up I guess.

That's what I'm going to claim - that money is from a house sale. No way I'm going to be subsidising reckless homeowners who have overstretched themselves like the JSA system wants me to.

Marcheline

I see where you're coming from Bongo as I am in a similar situation: I've built up savings for a house deposit, but if I hadn't I could claim Income Support and assorted other benefits as I am a full-time mother. It seems unfair to me too, as there are plenty abusing the system, but I can't see how else they could structure it?

Oldernotwiser

BongoTheWhippet wrote: »

Not quite.

I'm talking about the cost-benefit of having savings. You save for a rainy day, :eek:

For most people, becoming unemployed pretty well comes under the heading of "a rainy day" ! You seem to be trying to have it both ways.