JSA and ISA question

supersoup

I just finished university. I am having difficulty finding a job so far and wish to apply for JSA. I've had some money in a ISA since I was 16 that has not been touched since. It was meant for paying off university expenditure (not tuition fees though, I got a student loan for that, more stuff like food and rent). While I was at uni my parents lent me the money for those things with the idea that I would let the ISA grow and then pay them back with that money. The thing is that ISA is still locked for another 4 years. Will this affect my jsa claim? I can't access the money without incurring costs. I imagine if I cashed it in it would just look suspicious. Technically I will never hold a penny of it in my hands. I have no other savings at all. I have about £30 in my current account.

I know that probably they will just say 'well you have this money in your name therefore we are going to deduct from your jobseekers allowance' but in reality I cannot touch it and when I can get at it again 60% of it is going straight out again to pay off the parents. That would leave it under the limit.

pmlindyloo

if you have capital of over £16000 then you will not be entitled to income based JSA.

Anything between £6000 and £16000 has an amount deducted from the JSA.

I'm afraid that regardless of your having to pay a penalty for taking out your savings it will still be counted as capital.

Similarly the amount of money you 'owe' your parents will not be taken into account.

As far as the benefits department is concerned an ISA is your savings because it is in your name.

Have a look at this to see how much might be deducted from your JSA.

http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/rr2-a-guide-to-housing-benefit/working-it-out/income-and-capital/

You may have to live off your savings until they get below £16000, take the reduction from JSA if the sum is between £6000 and £16000 and pay back your parents when you are in work.

rogerblack

In order to argue that part of the money is not yours, there would need to be at least a reasonable presumption that it's someone elses.

Parents giving money to a child, while at university to support them, so that they can keep an investment which the parents could have made anyway in another form, with no documentary evidence of such an arrangement - not a hope in hell (on the facts mentioned above)

As to 'I can't touch it'.
If you can access it at all now - even paying several grand in fees - that is the value of capital it has now.
If you actually cannot legally use it, then the value is what someone might purchase the rights to the ISA on maturity for.
It's quite rare to have financial products that disallow any withdrawal, that you can't cash in in some means.

It is _not_ as simple as 'in your name, your money'.
But that is the starting position unless there is clear evidence the other way.
And in this case, it's hard to see what evidence of the other case there might be - to do something this unusual would require at least a drawn up contract at the time I suspect for the DWP to agree it wasn't your money.

In short - can the parents go through the courts and get the money back.
If they could, then it's probably reasonable to say it's theirs.

supersoup

pmlindyloo wrote: »

if you have capital of over £16000 then you will not be entitled to income based JSA.

Anything between £6000 and £16000 has an amount deducted from the JSA.

I'm afraid that regardless of your having to pay a penalty for taking out your savings it will still be counted as capital.

Similarly the amount of money you 'owe' your parents will not be taken into account.

As far as the benefits department is concerned an ISA is your savings because it is in your name.

Have a look at this to see how much might be deducted from your JSA.


You may have to live off your savings until they get below £16000, take the reduction from JSA if the sum is between £6000 and £16000 and pay back your parents when you are in work.

That's what I thought really. But good to double check. Irritating. I could just take the money out (incur a penalty) and pay off what I have to and I would then be eligible for the full JSA allowance but then won't JSA just turn around and say I got rid of capital on purpose?

rogerblack

supersoup wrote: »

That's what I thought really. But good to double check. Irritating. I could just take the money out (incur a penalty) and pay off what I have to and I would then be eligible for the full JSA allowance but then won't JSA just turn around and say I got rid of capital on purpose?

Yes.
In short - if you pay off a loan or other agreement that person loaning you money had no hope of recovering at this time in court - you can be treated as still having that money.

Unless exceptional circumstances apply.
For example, a loan for 4 months at an interest rate of 1000%APR

pmlindyloo

You said that the ISA is still locked in for another 4 years so your parents won't be expecting it back for another 4 years.

You need to come to some arrangement with your parents about what you owe them and how you are going to repay them.

Let's hope you get a job really soon.

supersoup

It's all been documented as we went along, all the money owed. But whether that counts for anything I don't know myself. I'll be honest I'd rather have a job.