What if you have savings and debts?

dodger1

This is about housing and council tax benefits. I understand that if I have savings above £16,000 (unless it was changed in the budget) then I don't qualify for the above benefits. However, what if I pay off my debts (credit cards and money owing to ex wife) using the savings which would then bring my savings below the £16,000 threshold.

I realise that savings between £6,000 and £16,000 still have an effect on the amount of benefit. So really my question is can I legitimately reduce my savings by paying all my debts. I've just been made redundant (no redundancy payment) and before anyone starts flaming I do want to get another job as soon as possible.

However, I have no qualms about claiming all I can while I'm unemployed as this will be my first ever claim in 42 years of working life.

Thanks for any help and advice.

alwaysonthego_2

It would be classed as deprivation of capital (depriving yourself of capital in order to claim benefits).

healy

It will probably be considered deprivation of capital as you are doing it in order to claim benefits.

There have been many threads on this especially recently and if you do a search you will find further information.

Added : That rotten alwaysonthego beat me to it!

alwaysonthego_2

healy wrote: »

It will probably be considered deprivation of capital as you are doing it in order to claim benefits.

There have been many threads on this especially recently and if you do a search you wil find further information.

Too slow

welshmoneylover

pmsl x :rotfl::rotfl::rotfl:

CCFC_80

healy wrote: »

It will probably be considered deprivation of capital as you are doing it in order to claim benefits.

There have been many threads on this especially recently and if you do a search you will find further information.

Added : That rotten alwaysonthego beat me to it!

Sorry I am probably missing something obvious here but if the OP as explained has genuine credit card debts and owes money to his wife, he has to surely pay this off at some point. The fact that it would take his capital below £16,000 is purely coincidental and that would surely allow a claim for JSA. I think that this deprivation of capital rule would be clearly difficult to apply.
I would strongly advise the OP to seek advice on this from the DWP if he wants to claim JSA after paying off his debts which would reduce his capital

alwaysonthego_2

andy46 wrote: »

Sorry I am probably missing something obvious here but if the OP as explained has genuine credit card debts and owes money to his wife, he has to surely pay this off at some point. The fact that it would take his capital below £16,000 is purely coincidental and that would surely allow a claim for JSA. I think that this deprivation of capital rule would be clearly difficult to apply.
I would strongly advise the OP to seek advice on this from the DWP if he wants to claim JSA after paying off his debts which would reduce his capital

It would be up to the DM but if someone was to pay off non priority debts off to reduce their capital so they can claim benefits is classed as deprivation of capital. I do not know why you think that it would be a rule difficult to apply because the DWP can gain full access to claimants bank accounts.

The op makes no mention about JSA so one must presume he is claiming CBJSA.

healy

andy46 wrote: »

Sorry I am probably missing something obvious here but if the OP as explained has genuine credit card debts and owes money to his wife, he has to surely pay this off at some point. The fact that it would take his capital below £16,000 is purely coincidental and that would surely allow a claim for JSA. I think that this deprivation of capital rule would be clearly difficult to apply.
I would strongly advise the OP to seek advice on this from the DWP if he wants to claim JSA after paying off his debts which would reduce his capital

Alwaysonthego has covered most of this but just to add the OP was talking about Housing Benefit (now LHA for private lets) and Council Tax Benefit though it would be the same for JSA.

SuziQ

I have been shocked at how contradictory the official info is on this and if it was me I would definitely take advice before risking this.OP I quoted something official re this in a thread a few days ago if you search my posts,unfortunately if 'they' decide you have deprived yourself of capital in order to claim they can treat you as if you STILL have it for calculating benefit.

seven-day-weekend

andy46 wrote: »

Sorry I am probably missing something obvious here but if the OP as explained has genuine credit card debts and owes money to his wife, he has to surely pay this off at some point. The fact that it would take his capital below £16,000 is purely coincidental and that would surely allow a claim for JSA. I think that this deprivation of capital rule would be clearly difficult to apply.
I would strongly advise the OP to seek advice on this from the DWP if he wants to claim JSA after paying off his debts which would reduce his capital

But why is he paying his debt off now? He could have paid it off at any time. So therefore it would look as though it is being done solely in order to qualify for benefits.

Oldernotwiser

I think that the deprivation of capital issue is likely to be particularly relevan in the case of paying " money owing to ex wife". Unless there's a formal written agreement - which is unlikely - there's going to be absolutely no proof that he's not just giving her some of his money to hang onto in order to be able to claim benefits.