JSA will run out soon

epm-84

p00hsticks said:

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.

Yes that is correct, I made a year disappear somehow!

calcotti

epm-84 said:

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.

That’s not correct. A sanction would not apply in a case like this. What would happen is that if DWP thought there had been ‘deprivation of capital’ they would treat the claimant as still having the capital and if total capital was therefore over £16,000 they would be excluded from claiming.

calcotti

epm-84 said:

Unfortunately following the 2010 election David Cameron and George Osborne decided those with over £16k in savings are ineligible for income based benefits, 

The current limits were actually set by the previous Labour government in 2006. https://publications.parliament.uk/pa/cm200607/cmselect/cmworpen/463/46308.htm
These were, I think, an increase on previous limits. Of course the actual spending value of these figures has been significantly eroded since then.

calcotti

gary83 said: 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.

And it is of course extremely difficult to maintain mortgage payments if your only income is UC. No mortgage help is available until 9 months with no earned income and even then it is a loan to help with mortgage interest only and further interest is charged on that loan.

calcotti

epm-84 said: 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.

Reduction of welfare benefits for capital have always been a feature of UK welfare benefits. 
The Second Schedule of the National Assistance Act https://www.legislation.gov.uk/ukpga/Geo6/11-12/29/schedule/SECOND/enacted provides for a savings disregard and above this for notional income of 6 pence (2.5p) for every £25. I can’t work out the capital limit.
For Supplementary Benefit introduced in 1966 there was a capital limit of £6,000.
I completely agree that the current limits really should be reviewed having been set at current levels for 14 years.
https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator Suggests equivalent values now would be £8,750 and £23,325.

epm-84

calcotti said:

gary83 said: 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.

And it is of course extremely difficult to maintain mortgage payments if your only income is UC. No mortgage help is available until 9 months with no earned income and even then it is a loan to help with mortgage interest only and further interest is charged on that loan.

As this is the Coronavirus forum it's worth remembering anyone with a mortgage can currently apply for a payment holiday, as has been the case since March.  There are other options for deferring debt - those with an interest free overdraft or lengthy 0% offer on a credit card can use those for paying for goods or services in the short term so that they still have money available to reduce the mortgage.

Tammykitty

OP I understand your frustration - personally I find the rules around assets very strange - if 2 people in similar circumstances on the same income had saved £20k, and 1 bought a house on the 1st March using their savings, they would be entitled to means tested benefits, and the other person not, despite still having the same amount of assets.
Person 1 would also be able to avail of the mortgage holidays etc. Whereas person 2 would only be able to claim contributions benefits and would still have to pay rent.

But unfortunately, these are the rules and there is nothing you can do about them currently. 
Just in case you happen to be self employed - any money saved for tax won't affect universal credit

gary83

Tammykitty said:

OP I understand your frustration - personally I find the rules around assets very strange - if 2 people in similar circumstances on the same income had saved £20k, and 1 bought a house on the 1st March using their savings, they would be entitled to means tested benefits, and the other person not, despite still having the same amount of assets.
Person 1 would also be able to avail of the mortgage holidays etc. Whereas person 2 would only be able to claim contributions benefits and would still have to pay rent.

But unfortunately, these are the rules and there is nothing you can do about them currently. 
Just in case you happen to be self employed - any money saved for tax won't affect universal credit

Person 1 might be able to have a mortgage holiday, although that costs more over the long run & is a short term prospect. they won’t be able to gain help towards the mortgage costs for the first 9 months & at that point any help will be in the form of a loan that will need to be repayed they don’t have it that easy. 

epm-84

gary83 said:

Tammykitty said:

OP I understand your frustration - personally I find the rules around assets very strange - if 2 people in similar circumstances on the same income had saved £20k, and 1 bought a house on the 1st March using their savings, they would be entitled to means tested benefits, and the other person not, despite still having the same amount of assets.
Person 1 would also be able to avail of the mortgage holidays etc. Whereas person 2 would only be able to claim contributions benefits and would still have to pay rent.

But unfortunately, these are the rules and there is nothing you can do about them currently. 
Just in case you happen to be self employed - any money saved for tax won't affect universal credit

Person 1 might be able to have a mortgage holiday, although that costs more over the long run & is a short term prospect. they won’t be able to gain help towards the mortgage costs for the first 9 months & at that point any help will be in the form of a loan that will need to be repayed they don’t have it that easy. 

Contribution based JSA is also only a short term prospect, as mentioned in the original post.  Living off your savings also reduces future interest payments and if you have to resort to savings in an account, specifically for a new house purchase, you might lose incentives by withdrawing from those accounts.  A couple who purchased their first home recently might have got a £8k bonus (£4k each) from the Lifetime ISA scheme and there's been other Help2Buy schemes including one to get first time buyers in to new build homes, so in reality it might be the person made redundant who is living with a relative due to postponing a house purchase gets £1875 from the state this year, while the person in their new home got £4k before any welfare help is taken in to consideration.

Changing the mortgage help from a grant to a loan was another of the controversial changes to benefits under Cameron and Osborne.

Tammykitty

gary83 said:

Tammykitty said:

OP I understand your frustration - personally I find the rules around assets very strange - if 2 people in similar circumstances on the same income had saved £20k, and 1 bought a house on the 1st March using their savings, they would be entitled to means tested benefits, and the other person not, despite still having the same amount of assets.
Person 1 would also be able to avail of the mortgage holidays etc. Whereas person 2 would only be able to claim contributions benefits and would still have to pay rent.

But unfortunately, these are the rules and there is nothing you can do about them currently. 
Just in case you happen to be self employed - any money saved for tax won't affect universal credit

Person 1 might be able to have a mortgage holiday, although that costs more over the long run & is a short term prospect. they won’t be able to gain help towards the mortgage costs for the first 9 months & at that point any help will be in the form of a loan that will need to be repayed they don’t have it that easy. 

I never said they had it easy - owning and house and living in Benefits is hard, especially if an unexpected expense crops up. But lets say (ignoring covid and mortgage holidays etc), that the people above, both had £20k, A bought a house on March 1st - Now has £6k, B was saving to buy a house, planning to buy in June. Both are made redundant on 31st March, both have one child.
A is entitled still has to pay his Mortgage of £600 month. 
B pays rent of £700 a month (most cases rent is more than a mortgage now)
B is entitled to no means tested benefits.

A gets benefits of £195 a week benefits (and mortgage interest after 9 months if needed)

B gets £21 child benefit and £75 JSA for 6 months only, then just child benefit.

At the end of the Unemployment -  A will still have the equity in his house, which will likely be more than it was at the start - as he is paying some off, and probably rising values.

B will have spend all his savings on rent and living expenses and will have very little left!