Question on benefits

53micksperhour

How on earth in any logical world, could paying off debt be seen as depriving oneself of capital. I really would of thought that in any court of law the acid test would be simply this. The 18k is debt, money already spent, long before any knowledge of forthcoming redundancy. Therefore you are only paying with that which isn't your money anyway.

As to future mortgage payments if you are still unemployed in 6 months time, they only pay some of the interest for you, so to avoid losing your home, I'd consider paying some mortgage upfront, subject to the lenders rules on paying early, but thats your choice.

The alternative is to calculate just how long your 22k would last for if you quite reasonably kept living in the same style as now, paying all your bills normally. Once those credit card interest payments kick in, I would suspect that all the money would soon be spent bringing you down to the lower limit for claiming IB JSA anyway. But for you, that money would of been wasted, you'd still have most of the original debt.

So honestly, pay the debt off now. And if in 6 months time you are still unemployed, fight the DWP only if they do rule then you can't have IB JSA. Often if you threaten them with even just the CAB, let alone full legal appeal, they will back down if it isn't clear cut case in their favour, which clearly this isn't. Meanwhile enjoy 6 months of not having to worry about the debt cos it's gone, so you are free to focus fully on job searching. Good luck.

Poppie68

53micksperhour wrote: »

How on earth in any logical world, could paying off debt be seen as depriving oneself of capital. I really would of thought that in any court of law the acid test would be simply this. The 18k is debt, money already spent, long before any knowledge of forthcoming redundancy.
Therefore you are only paying with that which isn't your money anyway.
Who's money is it then if not the op's?

As to future mortgage payments if you are still unemployed in 6 months time, they only pay some of the interest for you, so to avoid losing your home, I'd consider paying some mortgage upfront, subject to the lenders rules on paying early, but thats your choice.
This could be seen as deprivation also.

The alternative is to calculate just how long your 22k would last for if you quite reasonably kept living in the same style as now, paying all your bills normally. Once those credit card interest payments kick in, I would suspect that all the money would soon be spent bringing you down to the lower limit for claiming IB JSA anyway. But for you, that money would of been wasted, you'd still have most of the original debt.

So honestly, pay the debt off now. And if in 6 months time you are still unemployed, fight the DWP only if they do rule then you can't have IB JSA. Often if you threaten them with even just the CAB, let alone full legal appeal, they will back down if it isn't clear cut case in their favour, which clearly this isn't.

As CAB is an advisory service i don't think they have ever had the DWP shaking in their boots and have never heard of them 'backing down' because of there involvement or even threatend involvement. Infact i have heard some DWP advisors recommend you visit CAB to take advice.
Even a threat of appealing does'nt have them quaking in their boots as this is the claimants right and part of the procedure.

Meanwhile enjoy 6 months of not having to worry about the debt cos it's gone, so you are free to focus fully on job searching. Good luck.

Or you could spend the next 6 months fighting their desicion not to award you IR benefits because you have spent your £22,000 on paying off non priority debts.

FBaby

How on earth in any logical world, could paying off debt be seen as depriving oneself of capital.

Because redundancy payments are not a compensation payment for losing your job, it is a payment that is supposed to help you continue to make your normal payments until you find another job.

dodger1

md2012 wrote: »

I would like to clear my credit card debts as soon as I receive my redundancy payment in 1 week, would this definitely be the wrong thing to do?

Without that debt hanging over me I would still have enough left from my redundancy to pay my mortgage for 10 months

If you feel confident in getting another job during those 10 months then that's the route I'd take.

Shelldean

We had similar when OH was made redundant, though he had another job to go to. So we didn't claim JSA at any point. We did however claim HB CT and CTC. CTC we informed over the phone.
With HB and CT we had to write a covering letter showing CC balances and state our intention to reduce these. We also had to show bank statements showing redundancy money coming in and then going to the various credit cards. We was warned it maybe seen as deprivation once they received our letter.

In our case it wasn't and our partial HB and CT remained unchanged.

But our case was different as OH had a job to go straight into.

FBaby

dodger1 wrote: »

If you feel confident in getting another job during those 10 months then that's the route I'd take.

In that case, why not wait until you get the other job and pay the debts with the redundancy once a regular income comes in again?

GwylimT

It might be, it might not, you would be best to get some proper advice.

Buy anyway, with £22K all you can get is contribution based JSA for 6 months.

missapril75

md2012 wrote: »

I would like to clear my credit card debts as soon as I receive my redundancy payment in 1 week, would this definitely be the wrong thing to do?

Without that debt hanging over me I would still have enough left from my redundancy to pay my mortgage for 10 months

So the purpose of paying off your credit card debt is to clear the debt and you are still leaving something left to pay your mortgage for nearly a year.

If you're not even applying for a means tested benefit the subject has no reason to even come up for consideration.

If at some future date you do apply and it becomes known that the sum previously existed, it still has to be shown that your decision to pay off the debt was to get benefits rather than pay off the debt and save enormous interest.

They'd have to convincingly show that it was all part of some master plan made, ready to claim in the future.

That's unrealistic in my view.

md2012

Thank you everybody for your contributions and help on this, there are some very differing views and I'm still finding it hard to decide what route to go down.

The job hunting has started already so hopefully I can find something soon. Today though I thought of another scenario. I have applied for a job with a 6 month contract, if I got that job and then felt safe enough to pay off my credit card debt but then again was unemployed after 6 months could the dwp revisit the redundancy payment I received 6 months earlier?

dodger1

FBaby wrote: »

In that case, why not wait until you get the other job and pay the debts with the redundancy once a regular income comes in again?

Fair comment, it's just a lovely feeling being debt free.