The recession, benefits, the safety net, and the learning curve

Dithering_Dad

wolvoman wrote: »

Surely if you get made redundant and immediately decide to pay off a large chunk of mortgage with savings then the DSS will find this out and still treat you as if you had savings above the benefits threshold?

Yep, they class is as deprivation of assets and add it into the calculations. They can only do this if you put in a lump sum directly before you apply for state assistance. Though my approach of overpaying my mortgage each month cannot be classed in this way.

Odd if you're allowed to blow it all on a foreign holiday or consumer item, but can't sensibly pay down debt with it.

Max_Headroom_3

Surely if you have £50K and you owe £50K then you don't have £50K (any more than you'd have £50K if you had nothing but then you went out tomorrow and borrowed £50K).

So to that end, I can't see how they could regard paying off borrowing as "deprivation of assets", you never had the asset in the first place, you'd just borrowed it (were holding it for someone else if you like).

From my own experience, I bought my car and paid off the final bit of my mortgage (was only £1,300, I'd been using that to keep the mortgage open as it had a generous credit facility attached) and then went and signed on. This wasn't questioned, they only wanted to know how much money I had at that point.

Having said that, I am only claiming JSA. Maybe if I were claiming other things like housing benefit they'd look deeper, I don't know.

In fact I didn't sign on at all until half way through the month as I really hoped I'd have had an interview or two lined up and if so I'd have seen how those went first. No point signing on if I'd not needed to (could happily fund a few weeks unemployed). It was only when it dawned on me that this wasn't going to be as easy to find work or as short lived as I'd thought that I felt I really ought to be trying to cover costs.

And then discovered that it's not actually possible to do so if you've made your own way in life...

Dithering_Dad

Max_Headroom wrote: »

Surely if you have £50K and you owe £50K then you don't have £50K (any more than you'd have £50K if you had nothing but then you went out tomorrow and borrowed £50K).

So to that end, I can't see how they could regard paying off borrowing as "deprivation of assets", you never had the asset in the first place, you'd just borrowed it (were holding it for someone else if you like).

From my own experience, I bought my car and paid off the final bit of my mortgage (was only £1,300, I'd been using that to keep the mortgage open as it had a generous credit facility attached) and then went and signed on. This wasn't questioned, they only wanted to know how much money I had at that point.

Having said that, I am only claiming JSA. Maybe if I were claiming other things like housing benefit they'd look deeper, I don't know.

In fact I didn't sign on at all until half way through the month as I really hoped I'd have had an interview or two lined up and if so I'd have seen how those went first. No point signing on if I'd not needed to (could happily fund a few weeks unemployed). It was only when it dawned on me that this wasn't going to be as easy to find work or as short lived as I'd thought that I felt I really ought to be trying to cover costs.

And then discovered that it's not actually possible to do so if you've made your own way in life...

I've no idea about the rules, I just remember a discussion on DFW where someone was made redundant, paid it all onto his mortgage and was told by the DSS that the redundancy is supposed to keep him 'ticking over' until he either found a job or spent it all and was then entitled to benefits (I suppose that's why redundancy is tax free). Not sure if this applies to your own savings that you pay onto your mortgage.

JayScottGreenspan

Notional capital:
http://www.jobcentreplus.gov.uk/jcpwelsh/static/dev_010141.xml.html

lostinrates

JayScottGreenspan wrote: »

Notional capital:
http://www.jobcentreplus.gov.uk/jcpwelsh/static/dev_010141.xml.html

That is dispicable: its simply right to minimise exposure to risk of debt and loss of home etc: not a cunning plan to score more points on a system.

''You pay off your debts, you scum, we'll give you nothing''. compared to''what, you've never provided for yourself, well, its a shame but well, here you are...''

Its easy to see why we fume at times.

JayScottGreenspan

lostinrates wrote: »

Its easy to see why we fume at times.

Agreed.

Martha66

needahome wrote: »

personally i think anyone who owns their own home and claiming benefit, should be made to sell it and live off the money until it uns out and then claim benefit.

if you own your home, and are an "average" homeowner then you have about £150k of equity and the tax payer is paying for you to live!

if someone had £150k in the bank, they wouldn't be entitled to benefit till they had spent it, so why should you keep your money just because it tied up in your home?

as for a lot of people who over the years who have slagged off benefit claimants fo being lazy and not taking the minimun wage jobs out there,these people are going to face reality when they are forced with the fact that these are the only jobs available to them now.

its a lot different story when they work out their own budget and realise you cannot live on these jobs.

I haven't been able to afford my own home yet - but don't resent OP for having one. A home, not an asset. I do understand where you're coming from and certainly possibly an argument there if someone owns more than one home, but if OP sold his home, where would he live? Yes, the sale proceeds would pay the rent for a period but wouldn't last forever and he would then face possible homelessness. Finding private landlords willing to rent to someone in receipt of benefits has become much harder and in any case OP would then have to claim housing benefit or Local Housing Allowance as I think it is now called - and so be even more reliant on the State.
Of course, the hope is he finds a new job soon - but it isn't that easy in this climate.
I would like to move on in my career but at the moment am grateful to have a job!

I wish OP all the best of luck - and completely sympathise.

PasturesNew

Dithering_Dad wrote: »

I'd check your benefits to make sure you're not entitled to more.

Single, over 25, living alone, self-contained. WTC pays out at about £11k and under for me at £1.96 to be precise. But I could never say how much I earn. It changes daily, wouldn't know how to calculate it. It can only be calculated a year after the event, after the tax year is complete ... too late then. Last year's sum was OK - and I do a bit of temping here/there. Just a month of temping makes a massive difference when you're hovering on that line.

Dithering_Dad wrote: »

I think the most important thing would be that your NI 'stamp' would be paid, which ensures that you're not going to miss out on your state pension or state second pension. If you're self-employed you don't qualify got S2P and if you're not paying any NI you won't qualify for a state pension - though you will receive pension credits.

I've been self-employed since March 2007. I was working from home for a company and sold my house, so no home = no job. So I had to hand in my notice. But even with them I was self-employed, not employed. Not been employed since I was made redundant in June 2006, except 4 months of temping in 2007-08 and one week in 08-09.

I already qualify for a state pension. Done more than 30 years already. Paperwork says so.

Dithering_Dad wrote: »

I appreciate what you're saying about 'the man', but I would ask how you're going to support yourself through retirement - will you refuse pension credit, reduced council tax, heating supplements and other benefits you'll be entitled to?

When I get to that age I'll have a permanent address and will know income/outgoings so it will be easy to fill in their forms and take what's on offer.

Right now life is so transient, I couldn't begin to fit the figures onto the form and swear they were right/true. So I'd rather not. And, who knows, the phone might ring tomorrow with a job.

Dithering_Dad wrote: »

I agree that your STR decision was a master stroke and has benefitted you immensely financially (I just wish Mrs Dither had let me do the same ) but does it still make financial sense to STR? especially given that the %age falls are slowing down and that you're missing out on benefits that you're entitled to.

I have to STR until I have a job, it could be anywhere - up to 200 miles from where I am now, but most likely to be 100 miles. Who knows ... you don't know until the phone rings.

Dithering_Dad wrote: »

I really don't see any shame in receiving benefits to which you're entitled (and to which you have contributed to with taxation) and I'd certainly be applying for them if I were in the same boat.

As I said, I am borderline entitled. Might be looking bad this month, but next month a 10% increase in income could swing it the other way. A week's temping takes me right out of the zone.

Dithering_Dad

If it's such an issue, they should just get rid of the preferential tax breaks on redundancy (the first £30k is tax free) and in return, allow people to then use their redundancy monies to pay down any outstanding debts, including mortgages.

It's ridiculous that people who are sensible to put away money for difficult times are then penalised for doing so. It's the same with pensions - you're better off having nothing, than having a small pension because you end up losing out.

What a country!

geoffky

Pobby wrote: »

. I remember a young pregnant girl telling me about the flat she had been given. She was having a four poster bed provided for her. She told me she was entitled to it!
.

Can you tell me when this was because i can tell you she was not entitled to it and would not of got it..you only get emergency grants for things now days.. In the 80s you could get a beding grant and all other things for the house...but those days are long gone unless you find a charity that repairs furnature and gives you some for a small charge...;)