Confirmed redundancy

md2012

I would really appreciate some help and suggestions on my current situation.

I am being made redundant on February 28th, I have worked for the company for 25 years and will leave with a package of £22,000.

I am 4 years into a mortgage of which I pay £400 a month, it's a 75% mortgage of which the remaining 25% was an interest free second charge payable after 10 years. I also have £18,000 debt on loans and credit cards, all in all a bit of a mess

Can anybody tell me what benefits I am entitled to claim? Also should I use my redundancy package to pay off the debt or remaining 25% of my mortgage?

Would appreciate any suggestions, I'm so worried this is driving me crazy.

jobbingmusician

Get yourself over to turn2us to check benefits. I'm sorry I don't know the answer to your second question (you have to be careful of depriving yourself of assets, or your benefits will be affected).

Start here http://benefits-calculator.turn2us.org.uk/ImmigrationStatus

The good folk on the debt-free-wannabee board will have some good advice for you, I'm sure . I think it is likely to help you if you look at your debt situation separately from your redundancy money situation - especially as you can do some things which will help your debt separately from addressing your benefits and cash sum situation.

md2012

So if I use my redundancy pay to pay off my credit card debt I won't be able to claim jsa?

If I pay off that debt I will only have £4000 remaining.

FLAPJACK

I would imagine with that sort of capital behind you it could be a struggle to get benefits.....even JSA.

If that is (unfortunately the case) perhaps you could look at your situation from a different angle. See if you can have a word with your creditors and put them in the picture.

When I was made redundant with a mortgage I approached the mortgage provider and explained the situation and they ageed to lower the payments to interest only until I was re-employed or 12 months.

I did the same with CC's that I had and they too were very helpful. Remember they don't want to lose you as a customer.

It was only a personal loan that I had that wouldn't budge...however with the money I was saving I could still afford to pay it.

So don't panic...work out how long the 22k will last with your present outgoings.
Hopefully your lenders will help you and you will as a result have lower monthly outgoings, thereby making the 22k go further.

Don't forget too that you can (artificially) lower your council tax by applying to pay it over 12 months instead of 10.

Once you have worked out how long the 22k will last then you can find out at what level your capital has to be before you can get benefits.

In the mean time start looking for a job....that way if you get re-employed fairly quickly you are then working and also have a sum in the bank behind you.

Again use the 22k as a buffer...... meaning you won't have to get a job paying the same as you were earning before as each month you could if need be dip into the 22k....that way taking away any panic about what you need to earn....remember it's easier to find a job (you really want) while you are working as you have an income.

Very best of luck to you.

noelphobic

FLAPJACK wrote: »

I would imagine with that sort of capital behind you it could be a struggle to get benefits.....even JSA.

The OP would be entitled to contribution based JSA for up to 6 months. As long as NI contributions are up to date then savings are irrelevant.

FLAPJACK

Thanks "noelphobic" thats handy to know.....hopefully too it will help the OP to not dip too deeply into the capital they have behind them.

Cheers

p00hsticks

md2012 wrote: »

So if I use my redundancy pay to pay off my credit card debt I won't be able to claim jsa?

If I pay off that debt I will only have £4000 remaining.

As noephobic says, if you've been working full time for the last 25 years then you'll be entitled to six months contributions based JSA regardless of any savings etc.

After that, if you hadn't found a job, you'd be moved on to means tested JSA - but a redundancy payout of that size would means you probably wouldn't be entitled to anything.

It's ok to be using your redundancy money to continue making the required minimum monthly payments on mortage, loans and credit cards, but any overpayments could be seen by DWP as 'deprivation of capital' and you will be treated as if you still had the money for the purposes of calculating your eligibility for means tested benefits.

You don't mention your age or personal curcumstances - I assume you are single with no children and under sixty ?

md2012

I am indeed under 60, single with no children, isn't the rule anything over £16,000 saving will not entitle you to claim any benefits?

p00hsticks

md2012 wrote: »

I am indeed under 60, single with no children, isn't the rule anything over £16,000 saving will not entitle you to claim any benefits?

No, that's not quite true.

The majority of benefits are means tested, and will take your savings into account - as you say the upper savings limit is usually £16,000 - I'm not sure if this is the case for all.

However some benefits, such as Job seekers allowance, are 'contributions based' at least for a time - if you have paid enough NI over the last few years you are entitled to them for a certain period of time (six months for JSA) regardless of how much you have saved, providing you satisfy any other conditions (e.g. for JSA you have to be actively seeking work, meet the terms of the Jobseekers Agreement you arrange with the Jobcentree and go to sign on when they tell you).

Fruittea

I hope you don't mind me jumping on this post to ask a question. I'm in a similar position to MD2012 but I've opted to take voluntary early release - would I be able to claim JSA. I was just thinking it might be a gateway for me to get some free courses if I'm on benefits?

McKneff

It doesn't make any difference to claiming JSA if you have opted for volunatary redundancy.


Don't know about free courses though.