Use of redundancy cash

olias

The government website clearly states that payment considered reasonable such as paying off a mortgage early is not counted as deprivation of capital. I can't see how any DM could count paying off a mortgage to secure a roof over your head as being unreasonable, particularly as it is specifically referred to as an example that is allowed in their own official guidance notes!!!!

I still say to the OP to pay off your mortgage, I have done, and you have no idea of the relief and weight off your shoulders to know that you own your home outright (not to mention the feeling of smug satisfaction!:D)

Olias

alwaysonthego_2

I agree with Woodbine, it is a very grey area and there is a clause somewhere that states that an individual can not deprive themselves of their capital in order to claim state benefits. I would say that each case is judged on their own merits.

I would advice the op to seek advice from a specialist benefits adviser and not do what the poster suggests above.

olias

What's wrong with you people!!!!!!!!!!!!! what grey area???????? It's clearly stated in the governments OWN website in their OWN guidance notes and could not be more clear if they tried!!!!!!!!!!!

The so called 'clause' you refer to is if the OP were to deliberetly fritter away or give away or hide his capital, ie buy new plasma TVs for every room, Give thousands away to family, have a designer shopping spree, NOT pay of or reduce a DEBT!!!!!!!!!!!!!!!!!!!!!!!!!

alwaysonthego_2

olias wrote: »

What's wrong with you people!!!!!!!!!!!!! what grey area???????? It's clearly stated in the governments OWN website in their OWN guidance notes and could not be more clear if they tried!!!!!!!!!!!

The so called 'clause' you refer to is if the OP were to deliberetly fritter away or give away or hide his capital, ie buy new plasma TVs for every room, Give thousands away to family, have a designer shopping spree, NOT pay of or reduce a DEBT!!!!!!!!!!!!!!!!!!!!!!!!!

The op should seek specialist advice before they pay their mortgage off.

earthmother

We were in a similar situation just under 4 years back - we had sold a house and had a lump sum in the bank, but DH was, and still is, on disability benefits, so we had to prove where the money had gone when we paid debts etc.

We were actually told, by the DWP and CAB, that unneccessary spending such as clearing debts that weren't in arrears/special measures etc would be counted as deprivation of capital - so if they think you could afford to pay your monthly mortgage costs (even if in practice on benefits you couldn't), they may not look favourably on it.

We were also told though that holidays weren't allowed - so it is possible looking at the rules posted earlier that they have reasessed their stance on some areas.

Don't assume anything - with the DWP etc assuming will invariably go against you - get it from the horses mouth, preferably in writing.

c0113tt3

The most infamous situation on this was with the miners. Most paid off mortgage early with redundancy. Then claimed benefits. For income based benefits, it does look into what happened to the money spent, including paying off debt / mortgage etc early. It is depravation of assets in order to claim benefits, each case is assessed individually.

Generally paying off substantial amounts for eg. mortgage early and then claiming income based benefit is classed as depravation and usually effects benefit / entitlement.

Its really a test on what is reasonable? is it reasonable that you spent that money in unfortunate times knowing that really it should be put aside for rainy / difficult days? Is it then right / reasonable that you had to spend a substantial amount right at the moment where really it would be wise to help support yourself? and then expect the tax payer to subsidise in not being so wise in keeping enough money aside to then claim income based benefit. each case is individual and assessed individually on its merits / pitfalls.

[Deleted User]

olias wrote: »

What's wrong with you people!!!!!!!!!!!!! what grey area???????? It's clearly stated in the governments OWN website in their OWN guidance notes and could not be more clear if they tried!!!!!!!!!!!

The so called 'clause' you refer to is if the OP were to deliberetly fritter away or give away or hide his capital, ie buy new plasma TVs for every room, Give thousands away to family, have a designer shopping spree, NOT pay of or reduce a DEBT!!!!!!!!!!!!!!!!!!!!!!!!!

Reducing debt is usually treated as deprivation of capital,
unless its by way of the normal repayment structure,e.g. a monthly mortgage payment,NOT using capital to reduce debt and position yourself to receive means tested benefits.