jobseekers allowance income versus contribution

dmg24

tomerke wrote: »

well basically I have 10k to 14k of savings..and 25k put in my mortgage here which I am planning to take out and send abroad..Clear now?

How about you start a new thread when you decide to be honest and stop changing your story? We don't help scammers here.

tomerke

dmg24 wrote: »

How about you start a new thread when you decide to be honest and stop changing your story? We don't help scammers here.

guys no need to be cynical..I am being honest here. Perhaps I should have worded better initially. But please help me with my questions..As I said I have decided to invest abroad but not done so yet. My cash is still tied up in my mortgage, but have enough equity to take certain amount out.

thanks

tomerke

and any thoughts on this hypothetical question...
Secondly what if someone was to say pay down their mortgage to purposely reduce their savings! I know for a fact that intangible equity in a property doesnt count as savings right?? So isn't this a loophole for people to artifically reduce savings to qualify for more benefits? And ofcourse is not illegal but perhaps not so "nice" ??

HappyMJ

If you are planning to take a sum out of your mortgage you will not get SMI on that amount. That amount will then be treated as capital and then subject to deprivation of capital guidelines. With an offset/home equity/current account mortgage the SMI payment will be based on the lowest balance it has ever been.

You should only pay down the minimum necessary in order to clear the mortgage before you retire. Overpaying gradually is not deprivation but whacking a large number of £££ into the mortgage to get more benefits is deprivation of capital and benefits will not be payable.

tomerke

HappyMJ wrote: »

If you are planning to take a sum out of your mortgage you will not get SMI on that amount. That amount will then be treated as capital and then subject to deprivation of capital guidelines. With an offset/home equity/current account mortgage the SMI payment will be based on the lowest balance it has ever been.

You should only pay down the minimum necessary in order to clear the mortgage before you retire. Overpaying gradually is not deprivation but whacking a large number of £££ into the mortgage to get more benefits is deprivation of capital and benefits will not be payable.

thanks MJ...I partially got what you said. Say my property is worth 300k (that is very subjective) my mortgage which can go upto 75% ltv allows me to borrow 225k. Right now my mortgage amount is 200k outstanding. So really from SMI point of view all they care about is that i have 200k mortgage outstanding isn't it??

thank you

real1314

tomerke wrote: »

and any thoughts on this hypothetical question...
Secondly what if someone was to say pay down their mortgage to purposely reduce their savings! I know for a fact that intangible equity in a property doesnt count as savings right?? So isn't this a loophole for people to artifically reduce savings to qualify for more benefits? And ofcourse is not illegal but perhaps not so "nice" ??

You're making up terms. There's no such things as "intangible equity", so you can't know "for a fact" that it doesn't count.
Therefore that whole point is moot.

Using capital to pay down a mortgage to gain benefit would be treated as deprivation of capital.

Investing abroad is treated as savings, whether in property or any other form of investment.

Not declaring your circumstances correctly is fraud and can lead to a criminal record and a prioson sentence

HappyMJ

If the balance has ever been lower since taking out the mortgage then you'll only get the SMI on that figure. If it was at any one point lets say £175k then it will be on that figure unless you can prove the amount withdrawn was spent on home improvements/maintenance. The £25k that you could potentially withdraw does not count as funds. It's like an overdraft they don't count the credit that you have access to as part of the asset test. They just want to know what you have in the bank. To avoid confusion with them I'd have another normal current account as well as your mortgage.

tomerke

real1314 wrote: »

You're making up terms. There's no such things as "intangible equity", so you can't know "for a fact" that it doesn't count.
Therefore that whole point is moot.

Using capital to pay down a mortgage to gain benefit would be treated as deprivation of capital.

Investing abroad is treated as savings, whether in property or any other form of investment.

Not declaring your circumstances correctly is fraud and can lead to a criminal record and a prioson sentence

real...for the sake of argument intangible equity means there is equity there based on a subjective valuation of the property, and is not realizable unless sold..
In my case I am increasing my mortgage and transferring abroad..what is wrong with that?

tomerke

HappyMJ wrote: »

If the balance has ever been lower since taking out the mortgage then you'll only get the SMI on that figure. If it was at any one point lets say £175k then it will be on that figure unless you can prove the amount withdrawn was spent on home improvements/maintenance. The £25k that you could potentially withdraw does not count as funds. It's like an overdraft they don't count the credit that you have access to as part of the asset test. They just want to know what you have in the bank. To avoid confusion with them I'd have another normal current account as well as your mortgage.

thanks mj..No my balance has never been below 200k..so thats good i guess. But basically the 25k that I can withdraw is basically my money though, but as you said would not really be counted. I guess I feel that is not really right if you know what i mean??

HappyMJ

The problem with that is you are taking on further debt and now have capital. The DWP will see it now as capital so just leave things the way they are. I could go to the bank and max out all my credit cards that were once used for balance transfers many years ago. I'd have well over £25k but I wouldn't have way to pay them back and wouldn't get any benefits as I'd have £25k in the bank. It doesn't matter whether it's here in the UK or overseas.