Benefits, redundancy, debt?

asdf1982

BeBetter wrote: »

So we could clear the debt if he only claimed JSA but not if he tried to claim anything else?
?

yes but there are two types of JSA. your husband could claim "contribution based" this is not means tested and you could only claim for 6 months

income based is ongoing but your husband wouldnt get this having got rid of the £14000

BeBetter

It's definitely me that's confused. Sorry if I'm not being clear, I don't know anything about benefits at all.

What I'm trying to find out is what happens if he has to claim benefits.

I know if he's working he can do whatever he likes with the money. What I didn't know is what happens if he had to claim benefits if the trial didn't work out.

I thought because he'd been working in between getting redundancy and claiming for us as a family, then it wouldn't matter if we'd used it for debt in this situation, but I think you are saying it does matter and they would still expect us to have this money or they would see it as deprivation, unless he only claimed the basic JSA. Is that right?

Thanks for replying.

BeBetter

yes but there are two types of JSA. your husband could claim "contribution based" this is not means tested and you could only claim for 6 months

income based is ongoing but your husband wouldnt get this having got rid of the £14000

Right, got it now I think. Thanks.

asdf1982

BeBetter wrote: »

What I'm trying to find out is what happens if he has to claim benefits.

I know if he's working he can do whatever he likes with the money. What I didn't know is what happens if he had to claim benefits if the trial didn't work out.

.

Right

Scenario one : you get rid of the debt. trial doesnt work out. he can claim contribution based JSA for 6 months. nothing after that

scenario two: wait and see, continue monthly payments, trial doesnt work out, he will claim cont based JSA for 6 months, after this you have redundancy money to live off, when this reduces down to below £6k he could claim income based JSA

oops we posted at same time, i see you get it now

bloolagoon

Yes, if he needed to claim income based benefits they would look at previous bank accounts and it could well be that they looked at your debt payment as Depravation.

We were in a similar position last year with my husbands redundancy payment.

Tax Credits, for now do not use savings, so if he was employed or self employed he could claim WTC and Tax Credits for children. This is due to change but not for a while.

If you pay off your debts and his work doesn't long term exist and you need to rely on benefits you could easily find yourself in a pickle. I cannot say how DWP would look at your debt payments, but it is a risk.

You are allowed 6,000 of savings to keep benefits, why not at the minimum keep that figure to give yourself a cushion if needed?

BeBetter

Thanks for helping me understand better. Like I said we don't know anything much about this kind of thing and we don't want to do the wrong thing and get into trouble.

suburbanwifey

BeBetter wrote: »

Hi, I found this site after trying to search on the internet for information about our situation.

My husband has been told he's to be made redundant. He's lucky in that he's got a new job to start straight away so he'll not be unemployed or have to claim benefits at this point.

The new job has a 6 week trial period and DH will be treated as a self employed contractor during this time, he will have to register as self employed and pay his own tax and insurance. If the trial goes ok, he'll then be officially taken on as a company employee. If the trial doesn't go well, he'll be let go.

We have some debt that we want to clear with his redundancy money. He won't be getting paid as much as he did in his old job but we'd manage if we didn't have debt to pay as well.

If we do this and the trial doesn't work out, what would be the situation about benefits? We'd have to claim benefits until he found more work, I don't have a job right now either. Would it be a problem if we'd used the redundancy money for the debt? Or would that not matter since he'd been working again after he'd got it?

No-one's expecting the trial to not work out, I just want to be sure about things just in case.

Clear your debts immediately of 13K with the 14K upon receiving it, as he's got a new job to go to no need to say anything else about contribution based JSA as its not relevant to you, pay your debts off in full so you can both look forward to his new job (which he will pass the trail period for ) and a new life debt free.

Good Luck and Well done x

suburbanwifey

bloolagoon wrote: »

Yes, if he needed to claim income based benefits they would look at previous bank accounts and it could well be that they looked at your debt payment as Depravation.

We were in a similar position last year with my husbands redundancy payment.

Tax Credits, for now do not use savings, so if he was employed or self employed he could claim WTC and Tax Credits for children. This is due to change but not for a while.

If you pay off your debts and his work doesn't long term exist and you need to rely on benefits you could easily find yourself in a pickle. I cannot say how DWP would look at your debt payments, but it is a risk.

You are allowed 6,000 of savings to keep benefits, why not at the minimum keep that figure to give yourself a cushion if needed?

They'd be in more of a pickle if they had debts to pay living on benefits if the new job doesn't work out. If they clear ALL the debts, they would be able to manage and not trash their credit rating which does have a long term impact on their future. They should clear the lot or that 6K you suggest saving would get spent and they would still have debt.

midnight_express

If you pay off £13k worth of debts and claim means tests benefits six weeks later this is likely to be considered deprivation of capital. Your claim will then be treated as if you still have the money. It would be wise to hang on to most of the money until you know what your situation is going to be.

sammyjammy

suburbanwifey wrote: »

They'd be in more of a pickle if they had debts to pay living on benefits if the new job doesn't work out. If they clear ALL the debts, they would be able to manage and not trash their credit rating which does have a long term impact on their future. They should clear the lot or that 6K you suggest saving would get spent and they would still have debt.

You clearly either haven't read the OPs post or you don't know what you are talking about. The OP wants to know what would happen if they repaid all the debts and had to claim benefits six weeks later.