Use of redundancy cash

Notebook

Hi All
A few Q's
1)Being made redundant, looking to get about 25k
I owe about 20k on my mortgage. Could I use the money to pay it off and still be able to claim benefits as thus would leave me with 5k?

2)If I dont do that, can I claim jsa? if so for how long?

3)I took out my mortgage before oct 1995, so I understand there are different rules for mortgage help (if / when I have less that 16k) Is this correct?

4) Does the amount of interest you pay on each mortgage payment decrease nearer the end of the mortgage? - seeing as they help you with the interest part.

Thanks for any help

alwaysonthego_2

Do you have children and a partner?

I_luv_cats

JSA will look into any notice pay. Your lump sum won't stop you claiming JSA Contributory Benefit (For 6 months if you qualify on NI contributions)

Any money you have will impact on any means tested benefits and there is a depreciation of capital condition in claiming means tested benefits.

If you are not claiming Means Tested Benefits and having some money for emergencies it might be worth paying off your mortgage BUT there may be penalties for doing so.

Speaking to a regulated Financial Adviser might be your best course of action

Caz3121

this may be better on the benefits board but my understanding is that if you are disposing of the capital to enable you to receive benefits this is not allowed. They will want to see bank statements and to know where it has gone.
However you should be able to receive contribution based JSA for 6 months and this ignores any capital or partners income if applicable
After the 6 months then this looks at household income including savings so, if you have a partner that works, you would not receive any benefits
Likewise you would be expected to live off your savings until they fall below the threshold but at a normal rate (eg they would count minimum payment on credit cards, loans and motgage payment as normal spend but not paying them off.)

olias

Caz3121 wrote: »

this may be better on the benefits board but my understanding is that if you are disposing of the capital to enable you to receive benefits this is not allowed. They will want to see bank statements and to know where it has gone.
However you should be able to receive contribution based JSA for 6 months and this ignores any capital or partners income if applicable
After the 6 months then this looks at household income including savings so, if you have a partner that works, you would not receive any benefits
Likewise you would be expected to live off your savings until they fall below the threshold but at a normal rate (eg they would count minimum payment on credit cards, loans and motgage payment as normal spend but not paying them off.)

Rubbish! If the use of capital is to pay off loans, then this is perfectly acceptable and will NOT be seen as deprivation of capital.

Pay off your mortgage, you will still be left with a comfortable nest egg and WILL be able to claim means tested benefits if you are entitled

Olias

Notebook

alwaysonthego wrote: »

Do you have children and a partner?

No children and no partner

Notebook

olias wrote: »

Rubbish! If the use of capital is to pay off loans, then this is perfectly acceptable and will NOT be seen as deprivation of capital.

Pay off your mortgage, you will still be left with a comfortable nest egg and WILL be able to claim means tested benefits if you are entitled

Olias

Thanks for the help everyone

Difference of opinion on the mortgage. I wonder what would happen if I paid a lump off it?

Where can i get legal advice about this? from someone that will guarantee to provide the correct answer? I dont mind paying. Anyone recommend someone?

Oldernotwiser

Notebook wrote: »

Thanks for the help everyone

Difference of opinion on the mortgage. I wonder what would happen if I paid a lump off it?

Where can i get legal advice about this? from someone that will guarantee to provide the correct answer? I dont mind paying. Anyone recommend someone?

Jobcentre Plus?

olias

This is taken directly from the DWP website

'P1.703 A claimant should still be regarded as having deprived themself of a capital resource if they have disposed themself of it by way of a gift to a third party. However, they should not be regarded as depriving themself of it if they did it to
HB(SPC) Reg 47; CTB(SPC) Reg 37

• reduce or pay off a debt they owe
• purchase goods or services the Decision Maker considers reasonable, given their circumstances, eg
  • payments to reduce/pay off a debt, eg paying a credit card account or mortgage early
  • for day to day expenses
  • to improve their quality of life, eg buying a new kitchen or car
  • for medical treatment
  • for home repairs
  • for a holiday '

http://www.dwp.gov.uk/housingbenefit/claims-processing/operational-manuals/hbgm/parts/ptbp_01c.asp#bp_1700

This obviously relates to housing benefit claims, but should therefore also relate to any other means tested benefits

Olias

Caz3121

I stand corrected Olias - glad to see the official text. There has indeed been posts previously where posters have been advised if they, for example, have £20k and use it to pay all there debts off (eg credit cards) then they will be counted as still having it for means tested benefits...obviously this must be an urban myth

[Deleted User]

Caz3121 wrote: »

I stand corrected Olias - glad to see the official text. There has indeed been posts previously where posters have been advised if they, for example, have £20k and use it to pay all there debts off (eg credit cards) then they will be counted as still having it for means tested benefits...obviously this must be an urban myth

Actually its NOT a myth urban or otherwise,yes you can make payments towards debts,card cards etc but only the normal payments NOT so that you can bring your capital below levels to entitle means tested benefits.
Having said that each case is taken on its own merits and judged by a DM at the dwp,who will look at ALL the circumstances and check your bank statements(going back as far as he thinks is needed),any decision by a DM can of course be appealed against.
How do i know this?I was in a simlar situation last year and took legal advice from benefits specialist and entered into detailed correspondence with the dwp on the subject