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

Shakethedisease

Why ?

People with over £16,000 savings who aren't homeowners/ don't own outright don't get any benefits at all. And if they lose their jobs .... ???

Then all their hard won and ( taxed ) earned savings are gradually eaten up. Max was pretty on the ball actually paying his mortgage off. If he'd simply saved the equivilent amount for a 'rainy day', he'd be looking at £0.00 per week at the moment no matter how long he'd been paying into the system.

How the Amount of Your Savings Affects Your Eligibility for State Benefits


For those benefits which are affected by savings, the basic rule is that if you have savings above the upper savings limit, which is currently £16,000, you will not be eligible to receive any benefit. If you have savings below the lower savings limit, currently £6000, your benefits will be unaffected. (Note that these values can change over time, so you will need to check for the latest values.)

For savings in between the two limits, your savings are assumed to yield a weekly “tariff income” of £1 for every £250 of savings. This equates to an assumed annual tariff income of approximately £50 for every £250 of savings, equivalent to an interest rate of 20%, which is clearly absurd and unattainable in the real world. Nonetheless, this is the basis the government uses for their calculations. The benefit payments you receive each week will be reduced by your assumed tariff income. So, if the lower limit is £6000, and you have £10,000 saved, £4000 of that will be counted. £4000 divided by 250 is 16, so you will get £16 less per week in benefits.
Savings and Benefits – Conclusion


When you’re made redundant, the payment you get from your employer is the silver lining to the cloud. Just be aware that, when it comes to applying for benefits, the silver lining may have a whole new cloud of its own.

lynzpower

I was thinking today about the point that someone made here that many people are tied into contracts of some description or other (mobile phone or whatever) at the time unemployment hits and its not possible to just drop those contracts like a hotcake. A very good point actually.

This issue comes up time and again here, and I think, this coulld be a place where "real help" could be given.

If government took it upon themselves to legislate that - if you have signed on as Unemployed, you can get your contracts stopped so that debt does not accrue, then this would be a real positive change.

Cant see it ever happening though, after all this government doesnt really understand what debt is :rotfl: :rolleyes:

Generali

Shakethedisease wrote: »

Why ?

People with over £16,000 savings who aren't homeowners/ don't own outright don't get any benefits at all. And if they lose their jobs .... ???

Then all their hard won and ( taxed ) earned savings are gradually eaten up. Max was pretty on the ball actually paying his mortgage off. If he'd simply saved the equivilent amount for a 'rainy day', he'd be looking at £0.00 per week at the moment no matter how long he'd been paying into the system.

In some other countries (Aus for example) there are 2 levels for means testing depending on whether or not you own your home.

eg:

http://www.centrelink.gov.au/internet/internet.nsf/payments/chartab.htm#a

Chart A - assets test for homeowners

If you are For full pension/allowance* For part pension#+
Single** up to $171,750 less than $555,750
Partnered (combined) up to $243,500 less than $882,500
A couple but separated due to illness (combined income) up to $243,500 less than $1,011,500
One partner eligible up to $243,500 less than $882,500


Chart B - assets test for non-homeowners

If you are For full pension/allowance* For part pension#+
Single** up to $296,250 less than $680,250
Partnered (combined) up to $368,000 less than $1,007,000
A couple but separated due to illness (combined income) up to $368,000 less than $1,136,000
One partner eligible up to $368,000 less than $1,007,000

ceridwen

Max_Headroom wrote: »

Pretty much where I am my friend.

I saw business dipping badly about four years ago (that's when this all began in my opinion, in a very small way. It went mainstream last year).

I've spent the time since desperately hurling every spare penny at my mortgage, finishing off the necessary stuff on the house (long term project, still not completely finished but perfectly good enough for now), all the while chanting under my breath "don't crash yet, please don't crash yet". Well, I wasn't really, that'd have been insane, but you know what I mean.

Someone said to me recently "If you'd known ten years ago that this was all going to happen, and that you were going to lose your job in 2009, you really couldn't have planned or positioned yourself much better for it". Which was a heartening thing to hear to be honest.

Which is why I have no mortgage, no contract mobile phone, no credit card debt, no Sky TV, no loans, no nothing over and above the bare essentials.

And which is why I find it particularly galling that even after all that, after paring everything to the bone, after positioning myself as well financially as was earthly possible, the dear old benefit system still can't support me. I find that incredible!

And my overwhelming emotion at the moment is actually not for me (I'm ok for now, ask me again in six months..!) but for everyone else in a similar position. I'm really fortunate. I'm prepared, I'd been in a long term job so got a half reasonable payoff, I've got low overheads and I'm set.

But what about the other 95% of people who will be, have been, laid off this year?

With perhaps a tiny payoff, commitments, overheads and debts?

What the bloody hell are they going to do??? :eek:

Well - I'm glad to hear there are some of us out there who have been farsighted. Actually Max - I have to plead an unfair "advantage" - I saw this all coming over 20 years ago <cough> - so I have had even longer to "prepare" than you have. So - yep - been paying the mortgage off/getting the most vital work done on my house/<cough> deliberately bought a house in the first place that would be comparatively speaking cheap to run<cough> (now THAT seriously is an "unfair advantage" to be planning for the current economic set-up over 20 years ago..:o). Everyone says what a good money manager I am/how well I've planned - now I COULD literally fill my stomach with food (but it wouldnt be "proper" eating - ie well-balanced/tasty/making sure I get my "5 a day" etc even if I ditched my organic principles) - and what about that little thing called "my life" (ie that very modestly priced set of social activities/interests/etc I have) - there literally wouldnt be one single penny left for that after keeping myself from starvation.

I knew the "s**t would hit the fan" at some point after many ordinary/farsighted/intelligent/articulate people like myself started being "thrown in the deep end" with no foreseeable end in sight - and I see, from your thread, that this has started to happen even to people like us who HAVE seen it coming and prepared for it as best as we can. What I dont know is just what way said "s**t will actually hit the fan" - but I cant think the Government are "resting very easy in their beds" right now also wondering what happens when people so well-prepared/intelligent/articulate and angry are in this position......

Hopefully they'll see the sense of "buying off trouble" by raising the benefit money levels that people in this sort of position are in.....

I repeat something that has been a concern of mine for some years now - I wish to see my society continuing to be a relatively stable one - but I fear for this is this low level of benefit payment to people like you and me continues...

ceridwen

SingleSue wrote: »

Lol......I know.

But as I showed, a little bit of doing without in other areas and a lot of careful planning...it can be done.

I have gone without food for myself umpteem times to pay for a school trip and the idea of getting new school uniform gives me the heeby jeebies! :rotfl:

It's still an existence, just a slightly different one where everything has to be finely balanced and life is occupied by thinking in pennies and not pounds.

Then Sue I take my hat off to you:T - for being even more honest than I am - as I wouldnt go without food. The thought literally wouldnt even cross my mind - supermarkets would provide that food for me one way or the other (errr....<cough> hopefully from skip diving....but if not........they would still provide the food for me)....and thats me saying that...who prides myself on being honest and paying my way...

Mind....the Government DOESNT want to know JUST how angry I would be if they forced me into being dishonest to survive...and, yep, I would lay the blame fair and square at THEIR door for that...

baileysbattlebus

Shakethedisease wrote: »

Happens to tenants all the time every 6 months. 'No Dhss/No kids' is usual. Replace the word 'sell' with 'tell the landlord we're claiming benefits' and welcome to the world of trying to rent while unemployed and there is no social housing to be had.

PN.. in all honesty and with respect. I don't know much about 'fun money'. I do remember my kids sharing a cup-a-soup between them when things got really bad. Social fund loan for beds and bedding and a 3 piece suite when I got the council house, catalogue bills for a washing machine/clothing and a provy loan for £150 ( @ 50% interest ) for the Xmas before, nappies etc..on top of the utility bills generally took care of the extra £50 nicely each week.

When I started my midwifery course ( I put my breeding experience to good use ).. and I had to take a day off 2 weeks after starting because I was ill. I got a huge lecture on how I should've phoned in. They were a bit taken aback when I said I didn't actually have a phone...

Building 'overheads' was a distant dream.

I can relate to what you are saying - my sister was on benefits after her husband left her and their 3 sons aged 3,4 and 8. They are grown up now.

She had a council house - which was already furnished as she had it before he left her.

But I remember her using catalogues and the "Provy", mainly for clothes and toys (Christmas) for the boys and any household stuff she needed, the Provy lady came to the house every Friday to collect the money, grants for school uniforms and shoe for the boys.

Christmas presents for her and the boys from the family were usually clothes. My parents used to help with food - they would go to our parents a couple of days a week for dinner. And if she really needed something in the food line they would help her out, if they knew about it - she didn't have a phone.

She sometimes used to feed them instant potato and beans as she had nothing else. She used to knit all of their jumpers, her local clothes/wool shop had a lay away service where could get the wool when you could afford it. She also used this for some of their clothes - the shop would put them to one side and you paid what you could each week until they were paid for.

I remember saying to her once that I was sick of being hard up. She told me I didn't know what hard up was. Did I wonder how I was to pay the electric or gas? (she paid them weekly using a paying in book). Did I wonder where the dinner for today was going to come from? No I didn't, being hard up for me was not being able to go out and buy what I wanted when I wanted. It wasn't a choice of paying the gas or buying food. She was clothed chez baileysbattlebus, she got my cast offs.

She couldn't go to work, there was no child care help then. But eventually she was able to, she was able to buy her house. And buy a car. But after her years on benefits she was and is very frugal. Almost frightened to spend money. It certainly was not an easy life. It was subsistance. It may be different now - I don't know - I don't know anyone on benefits now.

dylansmum

PasturesNew wrote: »

So if you have a kid, you get £53+£20 for them ... which is more than the single person having to pay all the building overheads etc. Which means you can say £10 to feed the child from that £73 and £63 "fun money" to buy them stuff.

As I said, single people are not looked after under the current system. But we could say:

So a couple earning 50-60K per year also get an extra 30 quid per week for 'fun money' on top of their salary by your logic.

But let's see - 73 quid per week plus the 64. As OP said, the 64 does not cover bills, problems with house - and as others have said, what happens when the washing machine breaks? So using basic logic, that 73 is not fun money - most will go to:

Bills
Food
Child's clothing
House stuff.
Building overheads.



So yes, there may more money than a single's person allowance- but it ain't an extra 73 quid - more like 20 once you've factored in the basics (which is what anyone gets if working - universal child benefit!); so that is why single person's allowance should go up. Let's also take into account that CTC can affect housing benefit - it is also taxable.

Not a very clean system and not the best way of lifting folks out of poverty. But let's have some compassion for everyone losing jobs right now.

dylansmum

lynzpower wrote: »

This issue comes up time and again here, and I think, this coulld be a place where "real help" could be given.

If government took it upon themselves to legislate that - if you have signed on as Unemployed, you can get your contracts stopped so that debt does not accrue, then this would be a real positive change.

Cant see it ever happening though, after all this government doesnt really understand what debt is :rotfl: :rolleyes:

Very useful psot indeed. No they don't understand - too many snouts in troughs...

bendix

Why should government legislate to cancel a person's contractual obligation, solely because they have become unemployed, and where do you draw the line?

A mobile phone contract? SKY tv? Credit card repayments? A mortgage? Car repayments?

If that is the case, what is to stop widespread abuse of the system. I work in a law firm of 1000+ people, 80 of whom are currently in consultation for redundancy. What's to stop any of them - most of whom are on six figure salaries - going out today, buying bigger homes, a new porsche, upgrade Sky and even putting a holiday or two on their credit card, knowing full well they can take voluntary redundancy and get a nice minimum six month redundancy package?

It's palpable nonsense.

Max_Headroom_3

lynzpower wrote: »

Cant see it ever happening though, after all this government doesnt really understand what debt is :rotfl: :rolleyes:

They do seem to have got their head around expenses however... :rolleyes: