Need Advice about Redundancy and Debt

Freyagirl

My son is being made redundant, he has debt and his payment will not clear it.
If he has to claim benefits and he has used his redundancy money to pay off some debt will he still qualify.
I'm asking as I am unable to give much financial help myself and he has been having difficulties at work
which has resulted in him becoming depressed.

lincroft1710

The purpose of redundancy money is to help cover living expenses until a new job is found. Would suggest you ask a board guide to move this thread to the Benefits board, where you should get some helpful replies 

Freyagirl

Could you tell me how I do that please, can't seem to find the Benefits Board or a way to contact the Board Guides.

Freyagirl

My son is being made redundant, he has debt and his payment will not clear it.
If he has to claim benefits and he has used his redundancy money to pay off some debt will he still qualify.
I'm asking as I am unable to give much financial help myself and he has been having difficulties at work
which has resulted in him becoming depressed.

HillStreetBlues

Sounds like he would claim new style job seekers allowance  Universal Credit or a combo of both
With NSJSA any capital  won't matter, so free to pay off or keep money in bank
With UC  a person  is always free to pay of any debt  but UC gets reduced if savings over £6k

So in all those cases  paying off a debt is fine.

Alice_Holt

Freyagirl said:

My son is being made redundant, he has debt and his payment will not clear it.
If he has to claim benefits and he has used his redundancy money to pay off some debt will he still qualify.
I'm asking as I am unable to give much financial help myself and he has been having difficulties at work
which has resulted in him becoming depressed.

        Yes he would likely still qualify for UC and possibly Newstyle ESA/ JSA  But he might want to get debt advice before using all the redundancy money to pay debts.

   Info on UC -  https://www.citizensadvice.org.uk/benefits/universal-credit/
   Paying off debts is permissible for UC - Capital needs to below £16k to claim (it's means tested). 

   Or / and he may be able to claim ESA / JSA if he has the necessary NI contributions -  https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/employment-and-support-allowance/ 

https://www.citizensadvice.org.uk/benefits/help-if-on-a-low-income/jobseekers-allowance-jsa/

   Neither are means tested, but eligibility is through NI contributions. ESA could be claimed if the depression means he is not currently fit for work.

  If his depression has an impact on his day-to-day life PIP may be a possibility.
  https://www.citizensadvice.org.uk/benefits/sick-or-disabled-people-and-carers/pip/


Is he single ?  Does he live with you, or have his own property?   Etc, etc
He could get tailored benefits advice from his local advice charity. 

MSE_ForumTeam5

We've moved this to the benefits board.

(Thread moves should be requested by using the 'report' button - at present only the Forum Team here at MSE Towers can move threads. Our volunteer Ambassadors - the new term for Board Guides - don't currently have this function.)

Freyagirl

Thank you both for the advice, I have given him the details of two debt charities and trying to encourage him to contact them, he is still a bit in denial, he has worked for the same company for over 20 years and had hoped that he would be offered a role with less responsibility.  He is single, lives in his own (mortgaged) house. My suggestion to him would be to use part of the money to try and reduce his monthly outgoings and keep some back while job hunting, whatever he finds he will be taking a drop in salary so he will have ongoing issues. I could scream at him for getting into debt it isn't how he was brought up, but that would be counter productive at the moment.

Newcad

As he will be claiming New Style ESA and/or Universal Credit then using his redundancy money to pay off debts will not affect the claims, or what he is entitled to.

If he doesn't use it to pay off debts then it will still not affect ESA, but if over £6,000 in the bank that will reduce UC payments and over £16,000 you can't claim UC.

There is more detailed advice on the new thread that you started that Alice_Holt has linked above, but I put this here for anyone else reading this.

Alice_Holt

Freyagirl said:

Thank you both for the advice, I have given him the details of two debt charities and trying to encourage him to contact them, he is still a bit in denial, he has worked for the same company for over 20 years and had hoped that he would be offered a role with less responsibility.  He is single, lives in his own (mortgaged) house. My suggestion to him would be to use part of the money to try and reduce his monthly outgoings and keep some back while job hunting, whatever he finds he will be taking a drop in salary so he will have ongoing issues. I could scream at him for getting into debt it isn't how he was brought up, but that would be counter productive at the moment.

       In which case Newstyle JSA would be appropriate. It's not much (c.£80 pw) so he will need to use the redundancy monies for outgoings whilst job hunting. 

      I wouldn't think paying off the debt is sensible atm - rather getting debt advice (and than asking interest to be suspended whilst making nominal payments due to dramatically reduced income).  Avoid for - profit companies offering expensive IVA's.
As you say approach one of the debt charities.  He may need to be patient, as ridiculous HMG / MaPs  policies / targets have driven many debt advisers from the sector. 
https://www.responsible-credit.org.uk/posts/why-are-debt-advisers-holding-protests

He should look at: https://www.moneyhelper.org.uk/en/money-troubles/dealing-with-debt/what-is-breathing-space-and-how-can-it-help-me