Advice needed

newmum22

I am a single mum of an 11 month old, I used to be self employed but can no longer work as I look after my daughter full time. I went to claim benefits but was told I am not entitled to any as have too much savings. I have to spend my savings then they will help me. I was going to use my savings to pay off some of my mortgage but have been told this then counts as fraud if I then claim for benefits. Seems totally unfair that for someone who has worked hard, paid tax and has saved gets no help, where as if I had wasted my money or not worked then I would be helped.

If I paid this money off my mortgage it would be saving the government paying so much interest in my housing benefits anyway!

I need some advice on if I use my savings to pay off lump sum of mortgage, how long before I can claim benefits? Or if there's a better solution.

Thanks

Torry_Quine

If you use savings to pay off your mortgage then you will be treated as if you still have the money ie deprivation of assets.

You must spend your money in the normal way such as usual expenses.

newmum22

Thank you. There must be a time scale as to when you can claim after paying lump sum off though? If I didn't think I was going to claim benefits and paid it off mortgage and then later on needed to claim benefits there must be a way?

Caz3121

newmum22 wrote: »

If I paid this money off my mortgage it would be saving the government paying so much interest in my housing benefits anyway!

But from the governments view they won't need to pay anything towards the interest on your mortgage as you have the means to pay it yourself

How much are your savings? How long with 'normal' spending; mortgage, council tax, bills etc would it take to get you below £16k

You should still receive child tax credits and child benefit. Do you receive maintenance from your babies father?

Torry_Quine

newmum22 wrote: »

Thank you. There must be a time scale as to when you can claim after paying lump sum off though? If I didn't think I was going to claim benefits and paid it off mortgage and then later on needed to claim benefits there must be a way?

If you deliberately spend money to try and obtain benefits then you can be treated as still having the money for as long as it would have taken for you to spend the money in the normal fashion.

Poppie68

Benefits are there for people in need and should be a last resort, while you have savings above the amount they allow they are saying you are not in need and are able to support yourself and daughter.

There may come a time that your savings are under that limit and able to claim but overpaying your mortgage is seen as unnecessary as the money can be used to provide an income.

FBaby

Of course you could also opt to put your child in childcare to continue to support yourself and your child whilst using your savings towards your mortgage.

zagfles

It's a bit of a grey area at the moment, though when UC come in it looks like this would be OK and wouldn't count as deprivation... but that's probably a few years off yet for people with children.

But as mentioned above you can still claim tax credits and child benefit, there are no capital rules for these.

pmlindyloo

The relevant information is here:

http://www.dwp.gov.uk/docs/dmgch29.pdf

(from 29832)

How much money are we talking about?

You can still claim child tax credits and child benefit and child support from the father of your baby.

You would not be eligible for help with your mortgage interest until you have claimed Income Support for 13 weeks.

It might be worth asking Income Support if you can make those 3 months mortgage payments in advance and whether this would be seen as deprivation of capital. This would reduce your capital/savings.

Have you talked to your mortgage lender about your change of circumstances as you will not get the whole of your mortgage paid only the interest when you are on Income Support (look up Support for Mortgage Interest for more information) They need to know this.

tonyciclo

newmum22 wrote: »

Thank you. There must be a time scale as to when you can claim after paying lump sum off though? If I didn't think I was going to claim benefits and paid it off mortgage and then later on needed to claim benefits there must be a way?

It seems ridiculous to me too. People are saying that you must use your savings to pay the monthly mortgage payments. When your savings gets below the min, you can claim benefits. What a waste of money. Say you have a £50,000 interest only mortgage with 30 years left to pay and have £60,000 in savings. The mortgage payments would be approx. £160 a month. That would take 28 years of payments to get the capital down to below £6000!! But you would still owe the £50,000!!!
On the other hand if you repay the mortgage, you would have £10,000 left but still wouldn't get any benefits for the next 28 years!!

But if you sold your house and put the £54,000 to the sale proceeds to a new house, you would get benefits immediately + SMI on up to another £50000 if you take out a mortgage also to buy the new home.

paddedjohn

tonyciclo wrote: »

It seems ridiculous to me too. People are saying that you must use your savings to pay the monthly mortgage payments. When your savings gets below the min, you can claim benefits. What a waste of money. Say you have a £50,000 interest only mortgage with 30 years left to pay and have £60,000 in savings. The mortgage payments would be approx. £160 a month. That would take 28 years of payments to get the capital down to below £6000!! But you would still owe the £50,000!!!
On the other hand if you repay the mortgage, you would have £10,000 left but still wouldn't get any benefits for the next 28 years!!

But if you sold your house and put the £54,000 to the sale proceeds to a new house, you would get benefits immediately + SMI on up to another £50000 if you take out a mortgage also to buy the new home.

If you had £50k savings why weren't they used to pay the mortgage off before you needed to claim benefits? Fair enough if you came into £50k and paid the mortgage off while still working but to do it just to claim benefits is tantamount to fraud.


By the way I reckon the OP and tonycirco are one and the same person and is a troll.