JSA and fixed term deposit savings

andreww1

Hi,

I hoped someone on the board may be able to help me.

I've been unemployed for 3 months and have now spent all of my available savings. I want to claim JSA and housing benefit as I'm now pretty much broke. However, I have £30k in savings in a fixed term deposit account that does not mature until August 2011. The bank tells me there is no way I can access this before then nor will they grant me a loan/overdraft as I have no regular income source.

I don't have enough NI contributions for contribution based JSA, so would only be eligible for income based JSA, but I'm way over the £6k savings limit.

Does it make a difference that I can't access my savings? Will I be able to claim JSA and housing benefit? And if not, any other ideas?

I'd be really grateful for any advice.

Thanks

Andy

dmg24

You would not be able to claim IB JSA or HB. The fact that you cannot access them is not relevant. Are you sure that you cannot pay a penalty/ lose the interest in order to access them early?

KiKi

Sounds like the money's in a savings bond - I have one which I cannot access until October this year. I can't even close the account to get to it.

No point saying this retrospectively, but for the future, OP, if you ever tie up money again, make sure you leave enough in an accessible account to cover you for the period that your other savings are tied up. Ie, if you tie up your money for 6 months, make sure you have enough in an accessible account to pay the mortgage for those six months at least.

Can you approach the same bank with whom your savings are tied up and negotiate with them? Ie, if they offer an overdraft of xx until August 2011, then you will pay it off as soon as the tied-up savings are released? You would need to do this in-branch so you can talk to someone face to face. I generally find that playing the poor, dumb customer in times like this - face to face with someone and offering them a solution - they will try and help in some way. It might at least help you until you can find more work.

Otherwise make sure you prioritise your bills: mortgage and council tax. If you post your SOA on the DFW board they can also advise on getting your current outgoings down and other solutions for finding cash!

HTH a bit
KiKi

ceridwen

Not a situation I have come across before TBH - and, in the circumstances, I would certainly ask the bank for a letter that made it quite plain that I myself am not allowed to take any of my savings out if I tried to until that due date.

I think the basic rationale behind denying anyone due benefit income if they have over the "capital limit" is because it is deemed they could take the savings "surplus" out and use it to live on. But - if there is absolutely no way it is at ALL possible for you to do so - then that DWP rationale does not apply.

It may be an unusual situation to the DWP - and its quite possible that some lower level member of staff in the DWP who has never heard of this situation before might just turn round and "take the easy way out" and deny you benefit initially.

So - personally:
a. Get that letter from your bank proving there is absolutely no way you can access the savings until....
b. Look out what written proof you have of the date you put that money into savings in the first place.
c. Look out what written proof you have of the date you were declared redundant.

From this - I would imagine there is a noticeable gap - ie at least some months in between date b. and date c. (ie the proof that you couldnt possibly have suspected you were going to be made redundant at the time you put those savings into that account - so you definitely werent doing it to protect them).

Go into the DWP with all three pieces of proof. Hopefully that will be the end of the matter and benefit will be granted to you, as due and necessary, up until the date you get a new job or the savings can finally be withdrawn (whichever comes first).

If at first you get refused benefit - appeal. There is a chance you would win on appeal.

I would get my claim in for benefit (with all that proof) asap - as I dont know how much/if any backdating the DWP do - and you need money to live on as soon as possible.

Hopefully no-one WELL-INFORMED about DWP Regulations can show that even if you cant get at the savings - you are still expected to...:cool:

Certainly well worth pursuing the matter I would have thought - after all..you cant live on thin air..

EDIT: I guess an analogous situation to the one you are in is if someone owned outright a more expensive house than they really required - the DWP certainly couldnt get at any of the equity in that house (even if the person had specifically bought the house as a way of saving some money safely - ie they were deliberately planning at the outset to downsize to a cheaper house on retirement, but had put a spare lump sum of money into buying a dearer house than they wanted IYSWIM).

CCFC_80

I asked exactly the same question to the DWP a couple of years ago with exactly the same circumstances after losing my job. I had the bulk of my savings tied up in a fixed long term account which I was unable to access. This was completely irrelevent according to them and counted as immediate availability of capital even though it wasn't. I cannot see your situation now being any different and they will probably treat it the same.

Uncertain

andy46 wrote: »

I asked exactly the same question to the DWP a couple of years ago with exactly the same circumstances after losing my job. I had the bulk of my savings tied up in a fixed long term account which I was unable to access. This was completely irrelevent according to them and counted as immediate availability of capital even though it wasn't. I cannot see your situation now being any different and they will probably treat it the same.

Assuming this is correct (and I imagine it is) I can see why the DWP would have such a rule.

If they did not many who suspected they were about to lose their job would tie their money up just so that they would get government benefits.

Obviously this seems harsh where that was not the intention but where would you draw the line.

I believe there are also rules that sanction those who deprive themselves of assets, perhaps by giving large amounts to family etc.

Surely it must be possible to obtain a loan from the bank under these circumstances if they are given a charge on the savings account?

CCFC_80

Uncertain wrote: »

Assuming this is correct (and I imagine it is) I can see why the DWP would have such a rule.

If they did not many who suspected they were about to lose their job would tie their money up just so that they would get government benefits.

Obviously this seems harsh where that was not the intention but where would you draw the line.

I believe there are also rules that sanction those who deprive themselves of assets, perhaps by giving large amounts to family etc.

Surely it must be possible to obtain a loan from the bank under these circumstances if they are given a charge on the savings account?

Yes you are correct the rule applies for the reason you state that people could just tie up all their capital in a fixed rate account with no access and could still get benefits.

You are correct again and people cannot deprive themselves of capital by deliberately spending money and off loading capital to friends or relatives..

As for getting a bank loan,some people could have money tied up in fixed rate accounts for upto 5 years and then there is the question of getting a loan if you are out of work and with no immediate income.

ceridwen

andy46 wrote: »

I asked exactly the same question to the DWP a couple of years ago with exactly the same circumstances after losing my job. I had the bulk of my savings tied up in a fixed long term account which I was unable to access. This was completely irrelevent according to them and counted as immediate availability of capital even though it wasn't. I cannot see your situation now being any different and they will probably treat it the same.

Did you take the matter to appeal though?

ceridwen

Uncertain wrote: »

Assuming this is correct (and I imagine it is) I can see why the DWP would have such a rule.

If they did not many who suspected they were about to lose their job would tie their money up just so that they would get government benefits.

Obviously this seems harsh where that was not the intention but where would you draw the line.

I believe there are also rules that sanction those who deprive themselves of assets, perhaps by giving large amounts to family etc.

Surely it must be possible to obtain a loan from the bank under these circumstances if they are given a charge on the savings account?

Hence why I asked O.P. re proof of the dates when he put the money into this account and what date he knew he would be redundant.

I would say that if there is at least 6 months gap between the first date and the second date then surely, arguably, he is highly unlikely to have known he was going to be made redundant at the time he put that money in savings. I dont know about this form of savings - but it may even be the case that he put the money into it perhaps as even as long ago as a couple of years.

If I were O.P. I would take the view "Its not going to cost me anything to appeal - so I might as well get my evidence together and do so if need be". But that is all jumping the gun a bit anyway at this stage - he hasnt even tried the first hurdle yet - ie asking for this benefit in the first place and showing the DWP the proof that he cant get at those savings even if he himself wanted to.

dmg24

ceridwen, you're talking rubbish again. The DWP are not going to make an exception to the rule just because the claimant produces some paperwork saying his money is tied up. People who own a second property are not able to release the capital easily, but it still counts for benefit purposes. The DWP are not bothered about the intent behind where the money is, all they care about is the fact that the money exists.

ceridwen

Nice to know you're still one of my greatest fans - NOT! DMG...:cool:

The thing is - does anyone FROM THE DWP have "chapter and verse" they can quote one way or another on this?

The "textbook" they go on and the specific details from that is what we need

....unless and until the DWP can produce concrete written proof absolutely specific to this circumstance - it is worth O.P. taking a commonsense view on this and asking for benefit and, if its refused, appealing about it.

He has nothing to lose - and may well have much to gain..

...or are you saying that YOU personally work in a high-up position in the DWP and can produce concrete proof one way or the other on this particular circumstance?:)