Savings and Benefits

Bras

I may be redundant soon (we are in a consultancy period).

My wife is thinking to use some of her savings in this period to pay off some of our mortgage.

Is it ok to do this without affecting our entitlement to benefits if I am made redundant or will it be considered as a ploy to 'hide' savings.

Thanks

BigAunty

You'll get mixed responses because its a complex area.

Find the DWP decision makers guide to deprivation of capital which is their staff manual and see what you think it says.

DoC is about intentionally depriving yourself of capital, i.e. deliberate.

enabledebra

It depends:

Which benefits are you/would you be claiming?

What's your thinking behind paying off some of the mortgage?

princessdon

Ok let's look at this logically (as they will).

Most people need savings when they have less income, you chose the exact time you were given at risk to pay off a chunk of the mortgage. Not 2 months before but at that exact time.

Why?

If they look at why and decide you did this to gain benefits then they'll asume you still have the money anyway (and now you don't and can't get it back).

But as above - what are your circumstances - what benefits are you trying to claim? You may be paying it off and get nothing anyway and rely on those savings to live!

Bras

Thanks for the replies - unfortunately it does seem very complex.

The reason for paying off some of the mortgage is to reduce our savings (and entitlement to benefit) should I be made redundant (but obviously we wouldn't admit that).

We were hoping that if this is done before my notice of redundancy this wouldn't be an issue but perhaps not necessarily so?

princessdon

Bras wrote: »

Thanks for the replies - unfortunately it does seem very complex.

The reason for paying off some of the mortgage is to reduce our savings (and entitlement to benefit) should I be made redundant (but obviously we wouldn't admit that).

We were hoping that if this is done before my notice of redundancy this wouldn't be an issue but perhaps not necessarily so?

Does your wife work? If so you may not get benefits anyway - and some benefits (Tax Credits and Cont based JSA) are not dependant on savings.


Aside from the risk they'd look at it (and you need to supply details and bank statements for Income Related) going back at least 6 months, you need to work out if it would make a difference to your situation.

What is your savings to date?
Does your wife work and if so full time or part time?
Do you have children?
Do you currently claim Tax Credits?

enabledebra

Bras wrote: »

Thanks for the replies - unfortunately it does seem very complex.

The reason for paying off some of the mortgage is to reduce our savings (and entitlement to benefit) should I be made redundant (but obviously we wouldn't admit that).

We were hoping that if this is done before my notice of redundancy this wouldn't be an issue but perhaps not necessarily so?

In that case if you are claiming a benefit which takes capital into account when deciding entitlement/the level of entitlement and it is decided you reduced your capital to gain/increase entitlement the deprivation of capital rules would be applied and you would be treated as still having the capital.

[Deleted User]

Bras wrote: »

Thanks for the replies - unfortunately it does seem very complex.

The reason for paying off some of the mortgage is to reduce our savings (and entitlement to benefit) should I be made redundant (but obviously we wouldn't admit that).

We were hoping that if this is done before my notice of redundancy this wouldn't be an issue but perhaps not necessarily so?

for means tested benefits they will want to see bank statements going back several months,however cont based jsa isnt means tested

kj*daisy

My DH was made redundant and we knew we wouldn't get income based IS after the contributions based ended because of my income so didn't risk paying a lump of the mortgage in case we needed it to live off - but now he has another job we have concentrated on paying down the mortgage rather than saving up anymore. As it will help should we face the situation again as the mortgage payments are less now, but unless your wife doesn't work or earns very little then you may not get income based benefits anyway.