I lost housing benefit due to getting £3,000 redundancy money which I have spent on paying my rent

gerrystampgerrystamp Forumite
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MoneySaving Newbie
Hi all, I am trying to help a friend out.  She was made redundant several months ago and received a £3,000 pay off.  LB Tower Hamlets decided that she no longer qualified for housing benefit and stopped it.  She has spent all but £300 paying her rent with her redundancy money and has now run out of money.  Everywhere I have looked, it seems to say that £6,000 is the magic number (in savings) whereby you stop getting benefits but she has no savings, just this one off pay out.    I don't think this is correct and I would be grateful if anyone can help  I am concerned that she is very low on funds.

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  • edited 27 November 2020 at 4:20PM
    KatrinaWavesKatrinaWaves Forumite
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    edited 27 November 2020 at 4:20PM
    What exactly was the 'pay off' Redundancy? Pay in lieu of notice?


    Depending on what the £3k is for it will  may have taken her over the income limit for that month. It may be that she now needs to claim UC to help with housing costs due to the length of time between the claim being cancelled and today. Did she speak to the council after the claim ended to ask about this? 
  • edited 27 November 2020 at 4:20PM
    poppy12345poppy12345 Forumite
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    edited 27 November 2020 at 4:20PM
    Hi all, I am trying to help a friend out.  She was made redundant several months ago and received a £3,000 pay off.  LB Tower Hamlets decided that she no longer qualified for housing benefit and stopped it.  She has spent all but £300 paying her rent with her redundancy money and has now run out of money.  Everywhere I have looked, it seems to say that £6,000 is the magic number (in savings) whereby you stop getting benefits but she has no savings, just this one off pay out.    I don't think this is correct and I would be grateful if anyone can help  I am concerned that she is very low on funds.

    Unless the redundancy payment took her savings to more than £16,000 then her housing benefit shouldn't have stopped. If this happened several months ago why has it taken this long to make enquiries about it?
    Unless she's claiming a severe disability premium in another benefit then it will not be possible to reclaim housing benefit as Universal Credit has now replaced it.
    Has she found other work? if not what has she been doing for money since being made redundant?
    Is she single, living with partner, have dependent children?
  • edited 27 November 2020 at 4:56PM
    calcotticalcotti Forumite
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    edited 27 November 2020 at 4:56PM
    As others have suggested, if it was pay in lieu of notice and or accrued holiday pay the issue is likely to be about income rather than capital (unless it was redundancy money which should, I think, be treated as capital). If her income was such that no HB was payable that would have ended the HB claim. In the past a new HB claim the following month would have got everything back up and running but as new claims for HB cannot be made she would have needed to claim Universal Credit to get help with rent. Claiming UC will end any other means tested benefits she currently gets. The only exception will be if she receives another benefit which includes a Severe Disability premium in which case she can claim HB again.
    Information I post is for England unless otherwise stated. Some rules may be different in other parts of UK.
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