Debt free target - but on means-tested benefits....

mcscott

I am currently on means-tested ESA, not being able to work because of a chronic condition. I have FINALLY sold my property in France - incurring a huge (6 figure) loss. But I will shortly receive my share which will mean I can't claim means tested benefits. Fair enough. BUT I have several credit cards and debts to family, which I would obviously like to pay off. But if I do, and when my funds run out, I will be penalised for paying these debts off! How can this be right???

I understand that there have to be rules to stop people, say, winning the lottery, blowing it all in 6 months and then expecting to be able to claim benefits again, but this particular rule seems extremely unfair especially in the current climate. I will not have enough to last me until my pension kicks in (having to wait an extra three years for that!), nor will I have enough to buy a house to live in.

Caught between a rock and a hard place.

bumblingbea

Unless things have changed in the last few years...

paying off debts is an acceptable "use of capital"

mcscott wrote: »

I understand that there have to be rules to stop people, say, winning the lottery, blowing it all in 6 months and then expecting to be able to claim benefits again, but this particular rule seems extremely unfair especially in the current climate.

this was the reason the rule was created (and it happens a lot)

but if you show "due care" in spending the money, then there should be no restrictions placed on you. unfortunately, it also depends on how the ESA adjudicator reads the rules, you might have a fight on your hands, but it can be won.

hope this is some help...

bea

Mikazaru

mcscott wrote: »

I will not have enough to last me until my pension kicks in (having to wait an extra three years for that!), nor will I have enough to buy a house to live in.

Is it enough to buy a house outright? In that case I think the money can be ringfenced for 6 months if it is to be used for a purchase.

If the other debts are non-priority and have no court action etc then paying them all off would be seen as depreivation of capital. You can continue to pay the debts off at the normal rate and use the money for general living expenses and then when it falls below £16,000 claim again.

mcscott

Thanks both for your replies. Especially Bea, for the info on paying off debts. It was, after all, this sold property that caused them in the first place.

Mikazaru - The whole amount will not be enough to buy a house.

I will bear your advice in mind and hope that I have a reasonable adjudicator when the time comes.

RAS

Hi

Deprivation of capital is a difficult subject. There is some good sense and a lot of nonsense on the benefits forum, if you search under the term.