JSA will run out soon

P1

Hello all.  Bit of a !!!!!! year for most I'm sure.  I am unemployed and only qualify for JSA £74 per week because despite being always poor and not exactly a high earner, I had the gall to make some investments which are now worth over 16k so I can't claim Universal Credit.  When the JSA runs out I believe I will qualify for zero financial aid.  I don't understand this in a way.  I know families who seem to be on benefits for ever! I know several homeowners (some who are well off) on full Universal Credit or getting furlough.  I rent a room in a house! When my "fortune" and chance of owning a house drops below 16k, will I requalify for the full UC if I don't find a job or my new business idea fails?

*As one income stream for the future I'm going to start a gardening business.  Just need a few certs for liability insurance (e.g. chainsaw) but the training schools are closed until end of September.  I am booked in, but COVID cases seem to be rising so would not be surprised if the dates get pushed back.  God dammit!

If my £74 a week gets stopped then I will be end up getting proper screwed here.  I didn't know people in the UK can end up with zero income.  I've paid my taxes and dues. Seems a bit off to me. Am I missing something?  Hope the job applications work for the time being!

gary83

When your savings dip below £16000 you won’t immediately get the full amount of Universal credit, any savings you have between £6000 & £16000 reduces the amount of Universal credit you are entitled to.

the truth, which I appreciate you won’t like us the government expects you to look after yourself before you turn to them. The savings or investments you have put away are now going to need to be used, the rainy day has arrived.

epm-84

Unfortunately following the 2010 election David Cameron and George Osborne decided those with over £16k in savings are ineligible for income based benefits, it doesn't matter whether you only have £16k and it's in a Help2Buy ISA/Lifetime ISA for a deposit on your first home or whether you own your own yacht and mansion and have £100k in savings, everyone with over £16k in savings is treated the same.

The thing you might not be aware of is if you made a claim for JSA in March it would have been based on your National Insurance contributions for the 16/17 and 17/18 tax years.  On 1st Jan 2021 you will be able to apply again based on your NI contributions for the 17/18 and 18/19 tax years.

Yes if your savings drops below £16k then you can apply for UC but as long as there isn't a sudden unjustified drop.  If you spent £16k on a new car tomorrow and made a claim for UC it may be accepted but with a sanction applied meaning you'd have to attend appointments for a number of weeks without getting anything in return and then once the sanction expires (in a number of weeks or months) then you'd start getting payments.

poppy12345

P1 said:

 I know families who seem to be on benefits for ever! I know several homeowners (some who are well off) on full Universal Credit

Some people are unable to work because of a health condition. Others work and claim benefits because of their low income. Homeowners living in the house they own can claim UC because any capital in their home is disregarded for means tested benefits.

I don't know how you can "judge" people without knowing all of the circumstances.

gary83

As you point out the rules have been the same for ten years, they’re not new, I struggle to understand the thinking behind people putting money into the bank or investing it then thinking it should just remain there untouched, despite personal circumstances changing and then actually needing to spend that money now. If you genuinely have no need for it & won’t use it for the next however many years then put it in a pension, that way it’s totally discounted when it comes to calculating UC entitlements

The rainy day has arrived, the OP is in a lot better position than a lot of people, maybe people in that situation should try thinking more with a glass half full attitude, that they’re much better off than those having to rely on the government’s safety net alone, rather than dwelling over the amount of UC they’re missing out on

epm-84

gary83 said:

The rainy day has arrived, the OP is in a lot better position than a lot of people, maybe people in that situation should try thinking more with a glass half full attitude, that they’re much better off than those having to rely on the government’s safety net alone, rather than dwelling over the amount of UC they’re missing out on

That could be difficult if you've saved £2k a year for the last, say 9 years, with the intention of when you get to a certain figure you'll buy your first home, only to find you're going to be set back by a few years due to having to live off the savings while someone who took more risk by buying a house with a lower deposit gets more help from the government.

I'd personally say the people who are best off under the government's rules are those who made unnecessary expensive purchases in the past as they can gradually sell those items for extra money and at the same time keep their savings below the threshold.  For instance, imagine if your household has two cars but you don't really need two and the cheaper one has a second hand value of around £5k.

P1

poppy12345 said:

P1 said:

 I know families who seem to be on benefits for ever! I know several homeowners (some who are well off) on full Universal Credit

Some people are unable to work because of a health condition. Others work and claim benefits because of their low income. Homeowners living in the house they own can claim UC because any capital in their home is disregarded for means tested benefits.

I don't know how you can "judge" people without knowing all of the circumstances.

Oh Christ not pulling them down at all.  I am referring to people I know personally and they'd be screwed without the help!  I do NOT support them recieving nothing!  A proportion of this poulation is getting getting left out compared to the rest, but I accept it can't be roses for everyone.  I know people who have had the best financial summer of their lives and are pretty damn happy right now.  Others not so.  Tbh my situaiton was !!!!!!.  I got business insurance on my car and offered to follow the work vans.  I was unwilling to sharing vehicles with people saying "just the flu" who were using public transport in March and April.  I was happy to work though.  In hindsight it would have been fine for a few months if I carried on:/.    Is what it is.  So glad I went down the "what is money" rabbit hole and invested when I did.  The rainy day arrived!

Thanks for the replies.  Some good points

gary83

epm-84 said:

gary83 said:

The rainy day has arrived, the OP is in a lot better position than a lot of people, maybe people in that situation should try thinking more with a glass half full attitude, that they’re much better off than those having to rely on the government’s safety net alone, rather than dwelling over the amount of UC they’re missing out on

That could be difficult if you've saved £2k a year for the last, say 9 years, with the intention of when you get to a certain figure you'll buy your first home, only to find you're going to be set back by a few years due to having to live off the savings while someone who took more risk by buying a house with a lower deposit gets more help from the government.

I'd personally say the people who are best off under the government's rules are those who made unnecessary expensive purchases in the past as they can gradually sell those items for extra money and at the same time keep their savings below the threshold.  For instance, imagine if your household has two cars but you don't really need two and the cheaper one has a second hand value of around £5k.

The hypothetical somebody who has saved £2000 a year for the past 9 years has £18,000 (plus interest) they don’t have 18,000 “house tokens” The rules haven’t changed (as you pointed out the rules have been the same for over ten years) any savings you have between £6,000 & £16,000 reduce their UC entitlement. 

Anybody with an aspiration to buy a house could be set back by any number of things regardless of a pandemic, House prices rising, job issues, change of personal circumstances etc. conversely they could be better off In the long run than the person you mention who “took a risk and bought with a low deposit” yes they might currently be getting UC However they might suffer eventually due to the pandemic, the negative effects on jobs and landlords could see that person enter negative equity whilst any dip in house prices would benefit the person who’s been saving & hasn’t bought yet.

epm-84

gary83 said:

epm-84 said:

gary83 said:

The rainy day has arrived, the OP is in a lot better position than a lot of people, maybe people in that situation should try thinking more with a glass half full attitude, that they’re much better off than those having to rely on the government’s safety net alone, rather than dwelling over the amount of UC they’re missing out on

That could be difficult if you've saved £2k a year for the last, say 9 years, with the intention of when you get to a certain figure you'll buy your first home, only to find you're going to be set back by a few years due to having to live off the savings while someone who took more risk by buying a house with a lower deposit gets more help from the government.

I'd personally say the people who are best off under the government's rules are those who made unnecessary expensive purchases in the past as they can gradually sell those items for extra money and at the same time keep their savings below the threshold.  For instance, imagine if your household has two cars but you don't really need two and the cheaper one has a second hand value of around £5k.

The rules haven’t changed (as you pointed out the rules have been the same for over ten years) any savings you have between £6,000 & £16,000 reduce their UC entitlement. 
...
could see that person enter negative equity whilst any dip in house prices would benefit the person who’s been saving & hasn’t bought yet.

The fact that the rules have been the same for 10 years is a problem.  10 years ago if you were a 25 year old full time worker earning minimum wage £16,000 would have been more than your gross income for the year, now it's less.  Even if the government didn't want to change their mind about the policy implemented in 2010 they should have at least revised the thresholds so they relate to 2020 levels, not 2010 levels.

Negative equity isn't automatically a problem especially if you have a low interest mortgage (which in reality practically all mortgages are compared to the interest rates of 15 years ago) and have no plans to move in the foreseeable future.

There hasn't been any nationwide dip in house prices as far as I'm aware.  In fact I've heard the stamp duty holiday has increased selling prices due to some buyers having more money.

Also remember interest rates are lower than the rate of inflation so house prices would need to drop significantly for savers to be better off by holding off buying.

p00hsticks

epm-84 said:

The thing you might not be aware of is if you made a claim for JSA in March it would have been based on your National Insurance contributions for the 16/17 and 17/18 tax years.  On 1st Jan 2021 you will be able to apply again based on your NI contributions for the 17/18 and 18/19 tax years.

Although the idea is right, I don't believe the detail of what you say is correct.

My understanding is that the NI record that is looked at for benefits is for the last two full 'tax years' (6th April-5th April) preceding the current 'benefit year' which starts from the first Sunday (Monday?) of the calendar year. So the OP's claim would have been based on their contributions for tax years 17/18 and 18/19.

From the start of January next year the criteria advances to use tax years 2018/19 and 19/20.

Grumpy_chap

OP - have you asked your Work Coach about NEA (New Enterprise Allowance)?  This could be worth investigating.