Redundancy Pay, Deprivation of Capital & Self Employment

Keedie

Hi All,

I need some help and advice please. I will be redundant on 31/07/2016, and I will receive around £18,000 including redundancy and PILON. I have debts of £15,000 and although I would like to clear as much of this as I can before I spend it :eek:(I compulsively spend when I get depressed, and I am concerned that with the pressure of unemployment and this big change, that I am starting to become really unwell).

I am not ready to work straight away as I have other health issues, but I was told my local authority that I am unlikely to get housing benefit unless I receive JSA. But I cannot sign on if I am not mentally or physically able to be actively seeking work. So if I was to spread my redundancy pay over various accounts to help me manage different bills and outgoings including debt, would this be considered as deprivation of capital? (As I have a history of overspending if my account balance is high ):(

I am considering working freelance as a copywriter and proofreader to earn money as and when I am able to manage work. But I know that I need to find a part time job to cover the majority of my bills. Would I qualify for contribution based JSA whilst I am trying to get the part time job? Or would being freelance make me exempt?:think:

Sorry for all of the questions, but I am starting to get really anxious about surviving and I am a single parent of a 9 year old, and I have not had any benefits aside from child benefit so I am unsure how this all works.

Any help appreciated, thank you very much

Darksparkle

Will your doctor provide a fit note confirming you are unfit for work?

If so you may be able to claim ESA.

Londonsu

Keedie wrote: »

Hi All,

I need some help and advice please. I will be redundant on 31/07/2016, and I will receive around £18,000 including redundancy and PILON. I have debts of £15,000 and although I would like to clear as much of this as I can before I spend it :eek:(I compulsively spend when I get depressed, and I am concerned that with the pressure of unemployment and this big change, that I am starting to become really unwell).

I am not ready to work straight away as I have other health issues, but I was told my local authority that I am unlikely to get housing benefit unless I receive JSA. But I cannot sign on if I am not mentally or physically able to be actively seeking work. So if I was to spread my redundancy pay over various accounts to help me manage different bills and outgoings including debt, would this be considered as deprivation of capital? (As I have a history of overspending if my account balance is high ):(

I am considering working freelance as a copywriter and proofreader to earn money as and when I am able to manage work. But I know that I need to find a part time job to cover the majority of my bills. Would I qualify for contribution based JSA whilst I am trying to get the part time job? Or would being freelance make me exempt?:think:

Sorry for all of the questions, but I am starting to get really anxious about surviving and I am a single parent of a 9 year old, and I have not had any benefits aside from child benefit so I am unsure how this all works.

Any help appreciated, thank you very much

Has your area become a Universal Credit area yet as this may be a factor in how people can advise you.


You would be entitled to C based JSA if you have paid NI for the qualifying years which is two tax years before this benefit year ( I believe the benefit year started first Sunday of January this year) and is not means tested.


You can claim HB without having any of the qualifying benefits but it will be means tested and you would have to declare your redundancy money.


Deprivation of capital is very tricky and seems to be reliant on what a decision maker decides is and isn't I think some things are ok like rent arrears but I don't think paying general debts would be allowed.


As for freelancing do you have any contacts in the industry to get proofreading and copywriting work, this type of work paying at a rate you can live on is very hard to get, My Husband occasionally picks up work like this but he was a designer for 45 years and still has contacts in some of the largest ad agencies in the UK, but even with that he would find it very difficult to get enough work if he was reliant on it for income and it is stressful he has been known to work 16 hours on the trot to meet deadlines and the money is not that great. Most people offering that type of work require you to do proofreading and paraphrasing tests and some ask for degrees and there are a lot of people vying for this type of work thinking it's simple it's not and I can also attest to this as someone who was in the print industry for 40 years and was trained in proofreading and copywriting as part of my job

As Darksparkle has already said you may qualify for ESA

pmlindyloo

This is complicated as you have not really decided what you intend to do so a few facts for you.

If you have been paying class 1 NI contributions for the past two tax years then you would be eligible for contribution based ESA but you would need a fit note from your doctor. Contribution based ESA is not means tested so your savings would not affect it.

Depending on your medical condition (is it long term?) then claiming contribution based ESA would give you some breathing space.

The alternative is to claim contribution based JSA and after your first meeting produce a fit note from your doctor which would allow you time to get better (if this is a short term medical problem) and whilst unwell would not be expected to adhere to the job seekers agreement/commitment.

So, basically, a choice here depending on your medical condition.

Housing benefit has different rules as regards deprivation of capital so you could pay of your debts or some of them and claim HB and CT reduction.

QUOTE from AgeUK

Deprivation of capital (notional capital)
If you deprive yourself of capital in order to qualify for HB or to increase
the amount you get, the local authority can treat you as still having that
capital. This is known as notional capital. This might occur if you give
money away to your family or buy expensive items in order to qualify for
a benefit.
You have not deprived yourself of capital if you have paid off debts or
used money on ‘reasonable’ spending on goods and services. If the local
authority decides that you have notional capital you should seek advice
and consider appealing against the decision.

However, I would suggest that you get some advice from CAB about paying off your debts especially since you say you have difficulty managing your finances. They may suggest that you have an emergency fund and pay off the high interest debts first.

Whilst claiming JSA or ESA you can also put in a claim for child tax credits. Although they will initially base this on last tax year's earnings you can report a change of circumstances if they give you a nil award.

Hopefully one of our tax credits 'experts' can explain this better than me!

So, put in a claim for either contribution based ESA or JSA, claim child tax credits and pay a visit to CAB. Then claim HB and CT reduction once CAB has helped with your debts.

Alice_Holt

OP - I agree with pmlindyloo.

CB - ESa and CTC would be a sensible start.

Just to add that it might be worth considering if your health conditions would qualify you for a PIP award.
Some info here:
http://www.benefitsandwork.co.uk/personal-independence-payment-pip/pip-self-test
https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/

You could also ask CAB about this.

Good Luck.

Darksparkle

What was your income for 2015/16?

How much will you have earned by 31/07/2016? Including PILON and their taxable elements but not the non-taxable redundancy element.

Keedie

Hi All,

Thank you so much for your advice. I suffer from Chronic Fatigue Syndrome (like M.E.) It's a fluctuating illness but when I am relapsing, I can hardly stay awake, and my muscles and joints are so sore, and so I have to take Tramadol (similar to morphine) to help me with the pain etc. And I am on and off crutches some days, then walking around 'normally' on other days (but my new normal is about 60% of the old me). I think my doctor will sign me off, as they have been trying to get me to take it easy, but I had to finish work properly or I would have lost the right to redundancy pay. As I volunteered for the redundancy because my sickness is high and my work performance has suffered. So Alice Holt, I will look into PIP, but as my condition, although long term, will probably leave me with little or no mobility points.

Londonsu - My area only has UC for single claimants, but from what I can work out from their confusing website, is that I will have to apply for JSA as I am a single parent and therefore not 'single' in the sense that I have no dependants or partner etc. I have not tried to do freelancing or copywriting before, but I have signed up for a distance learning course, as it is something that I have been interested in, but I will need a part time job as I know that it will be a long time before I make any money from it as I don't have contacts etc. I didn't think of the difficulty of obtaining work to be honest, but if you and your husband have so much experience and see it is a difficult industry, then I will probably have to see it as more of a hobby.

pmlindyloo - thank you very much for the information about DOCapital, I have heard of it but was unsure of what it meant. I will contact the CAB, as I know that my debts and my financial management will make this my priority even if it is not seen as a priority to others. But I don't want to ease my anxieties regarding the debt at the risk of not been able to keep a roof over our heads etc. As I have more than 2 years contributions, I will qualify for contribution based JSA initially. But I will contact CAB this week. I've not had CTC for years, but I will call them this week as well. It's just all starting to get a bit overwhelming.

Darksparkle - my income for 2015/16 was around £36,000, and my earnings to 31/07/2016 including PILON will be about £21,000 (I received a bonus payment as I complained that they were paying a colleague more than me for doing the same project work and about £8,000 of the earnings figure is enhanced PILON payments that they are offering as an incentive to get rid of people.

Thank you all so much!

Darksparkle

Based on those figure it's unlikely you'd be awarded any CTC unless you were awarded an income based benefit (IS, JSA/ESA income based)

Keedie

Thanks Darksparkle,

I will get the CAB to help me with the budget advice/support and I will apply for CTC so that I have a claim going I guess, even if it is a nil award. Then if I have not managed to find a suitable part time role whilst on CB JSA, I might eventually be entitled to something if I end up moving onto IB JSA. I'll probably get rejected for my HB as well, but I will get someone to help me fill in the forms so that I can apply and see what they say.

I have to speak to my specialists at the hospital/GP about my working hours/workload, as I keep falling asleep at work, and although my collagues are supportive, I am a bit scared that when I apply for joibs and have to state my physical and mental health conditions, that I may be seen as a liability. And sometimes I am okay to work, and other times I struggle, so I am not as reliable as I would like to be.

Thanks again all for your help and support.

Keedie,
xx