Benefits after redundancy payment

joe1234_2

I was made redundant a couple of months ago. I received quite a large payout (over £30,000) and my "savings" are now quite large - certainly disqualifying me for anything like housing benefit, council tax relief or income-related JSA.

It may sound as though I am in a good position after receiving a large payment but my savings are dramatically reducing: income=£220 per month (and taxed at 40% until recently!); outgoings =£1200 per month.

The fact is I am renting at the moment, and have been building up my savings so that I can buy a big percentage of a small house as it's time I bought a house (I'm 40).

I certainly am not sponging or anything. I am spending 10 hours a day looking for suitable work, but as yet nothing is coming up. (I am just desperately trying not to lose that possibility of buying a house that I have been building up my savings for and working towards for the last 15 years).

The question is if I spend most of my savings NOW on buying a significant part of a small house (50-70% depending on price) AND hence my savings will go down to just £1000, will I then qualify for all those other means-tested benefits?

Thanks for any help

zzzLazyDaisy

There is a provision that if you deliberately spend money to get rid of your savings in order to qualify for benefits, you will be treated as if you still had the savings. I doubt that would apply to buying a house, as you need a roof over your head, whatever your situation, but you might want to check it out.

I am assuming that you have someone else ready to put up the remainder of the purchase price, as you will not qualify for help with a mortgage. If that is right, and the person will also be living there, depending on the circumstances you may also have problems persuading the benefits agency not to treat your incomes as a joint income for these purposes.

I suggest that you see a CAB adviser, as they can give you full information.

Ted_Hutchinson

DWP advice regarding Deprivation of CapitalFor the reasons set out in this link you will see it is impossible to get a specific answer from the DWP in advance of your decision.
Help to pay mortgage interest sets out the basis of the scheme. Unfortunately there will be a "waiting" period during which no help is provided, there is also a maximum mortgage which is eligible.
The question the Decision Maker will ask is Did the claimant make the purchase with the INTENTION of claiming benefit later? Therefore if the DM thinks you spent the money knowing the DWP would later pick up the bill, you may have to appeal the decision. If you can argue convincingly that your expectation of getting another job quickly in the area in which you made your purchase was reasonable at that time, then the intention to benefit from the system won't be proved.

shelly

I don't know if this is any help.I was made redundant a few weeks ago.I got 3 weeks notice pay and 3 weeks redundancy pay.I went to the Job centre to make a claim and was told to claim contribution based JSA.The only stipulation was that I couldn't claim for the 3 week period my redundancy pay covered.They surprised me because they didn't ask me about any savings I had or if my husband worked fulltime,part time or if at all.I asked the lady if the fact I had got quite abit of (to me anyway) redundancy money would it affect my claim she said it didn't matter at all just that I had to wait 3 weeks to make a claim.

HTH

Ted_Hutchinson

You were lucky your Jobseeker's Allowance person didn't accept your claim and made you wait. It often happens that the claim is accepted but not paid for those first weeks and so the 26 weeks for which JSA can be paid is reduced.
Contributions based JSA isn't means tested but Income-based JSA is so as soon as your Contribution-based JSA is exhausted your remaining capital does affect your benefit claiming potential.