Does using savings to pay off a mortgage count as deprivation of capital for benefits

Jowo_2

Does anyone know where the actual guidance aimed at decision maker is published and can provide a link? In the past someone has posted quite specific rules on this which seems very helpful but I've only seen it pasted here once in the past.

Caz3121

Jowo wrote: »

Does anyone know where the actual guidance aimed at decision maker is published and can provide a link? In the past someone has posted quite specific rules on this which seems very helpful but I've only seen it pasted here once in the past.

could this be it

http://www.hmrc.gov.uk/manuals/dmgmanual/html/1Dmgcont/01_0011_DMGCONT10.htm

If a person uses capital to repay a debt, the decision maker should consider carefully whether the debt had to be repaid at this time. If there is no legal obligation or pressure to repay the debt now, part of the purpose may have been to get benefit or more benefit.

michaels

Thanks for all the replies.

It does make a difference as CB JSA only pays for a max 6 months and savings also disqualify council tax benefit, free school meals, free prescriptions etc.

I may not be made redundant and I would hopefully find a new job quickly (not being that fussy over what I do) but a new lower income would also prevent me from extending and there is always the risk that the economy really tanks like in the early 80s when senior, well qualified people were also unemployed for long periods - it could happen again. I admit it would feel pretty gutting to see my extension money being spent on living each month whereas if I had never borrowed it in the first place I would have received benefits.

Bogof_Babe wrote: »

If you will be entitled to contributions based JSA then paying off your mortgage won't make any difference.

It's only means tested benefits that you need to take into consideration.

dmg24

Caz3121 wrote: »

could this be it

http://www.hmrc.gov.uk/manuals/dmgmanual/html/1Dmgcont/01_0011_DMGCONT10.htm

If a person uses capital to repay a debt, the decision maker should consider carefully whether the debt had to be repaid at this time. If there is no legal obligation or pressure to repay the debt now, part of the purpose may have been to get benefit or more benefit.

The rules do not relate to JSA, CTB etc but the principles are the same.

HappyMJ

michaels wrote: »

Thanks for all the replies.

It does make a difference as CB JSA only pays for a max 6 months and savings also disqualify council tax benefit, free school meals, free prescriptions etc.

I may not be made redundant and I would hopefully find a new job quickly (not being that fussy over what I do) but a new lower income would also prevent me from extending and there is always the risk that the economy really tanks like in the early 80s when senior, well qualified people were also unemployed for long periods - it could happen again. I admit it would feel pretty gutting to see my extension money being spent on living each month whereas if I had never borrowed it in the first place I would have received benefits.

What....You're still working??? You can do whatever you like with your money so pay the debts off if you want. You wouldn't be doing it to get benefits at some possible date in the future. It's only if you do it to get more benefits just before you apply.

dmg24

HappyMJ wrote: »

What....You're still working??? You can do whatever you like with your money so pay the debts off if you want. You wouldn't be doing it to get benefits at some possible date in the future. It's only if you do it to get more benefits just before you apply.

It is not as simple as that. If someone was on notice of possible redundancy, and they chose to move money about in order to claim benefits once they were made redundant, this would be questionned. However, if there is no threat of redundancy then there should not be an issue.

HappyMJ

Lol...that would then mean I am claiming fraudulently.... In my mind though my net worth is under £6,000 so I don't think I am. I owe many thousands on 0% interest credit cards and during balance transfers the money goes through my current account. I then choose to pay off the old credit card debts in full way before the due date.

Jowo_2

Facts to consider: did applicant's have a choice when they disposed of the capital?

Applicant's or partner's have a choice if they
1) give their capital away
2) spend their capital extravagantly or imprudently even if they say they have used it to pay for the necessities of life
3) pay back a debt before the agreed date, such as when they pay off their mortgage and the agreement says it is not due to be repaid for another 15 years
4) pay more than the amount due on a debt , such as when they pay more than the minimum payment on a credit card debt
5) pay back a debt which is not legal and incapable of enforcement.


http://www.hmrc.gov.uk/manuals/dmgmanual/html/DMG41001/09_0214_DMG45048.htm

Robbie64

Jowo wrote: »

Does anyone know where the actual guidance aimed at decision maker is published and can provide a link? In the past someone has posted quite specific rules on this which seems very helpful but I've only seen it pasted here once in the past.

the relevant part of the Decision Makers Guide can be found at http://www.dwp.gov.uk/publications/specialist-guides/decision-makers-guide/#vol5 Chapter 29, paras 29795 onwards. The HMRC guidance you have quoted in this and the other thread seems to have been based on the DMG.