Equity release and transition between old-style JSA and UC

sambda

Hi,

I am taking out an equity-release/lifetime mortgage in order to pay off an older mortgage which is due next year and I wouldn't have been able to pay off.  The vast majority of the equity release will pay off the old mortgage plus an SMI loan.  There will be a small remaining sum, but this won't take me over the £6k benefits threshold (i.e. the "spending money" you are allowed to have before it affects your benefits).

At about the same time, I am being transitioned between old-style JSA and UC.

My JCP advisor seemed to think that it is somehow advantageous for me to wait and do all this *after* I am on UC.  He clammed up when I pressed him further on this, saying he couldn't comment, but he seems to have been trying to tell me something.  As far as I can see the 6k-16k factor is the same between the old-style JSA and UC.

So, may he have been meaning there was some sort of different way that the extra bit of equity release (i.e. the bit that wasn't used to pay off the two loans) would be treated?

Am I best to wait for UC or to do the ER whilst still on old-style JSA?

I'm a bit confused.

Thanks for any help/pointers.

born_again

Would the equity release money go via your bank account anyway? Other than the excess.

Keep_pedalling

born_again said:

Would the equity release money go via your bank account anyway? Other than the excess.

Good point, the OP will only receive what’s left after the existing mortgage is paid off. 

Newcad

sambda

. .. the "spending money" you are allowed to have before it affects your benefits...

I have to say that i realy like that descripton.

As for the the rest I think that it's going to depend on what dates funds hit what account when, particularly as they seem to be intended to be used for more than one thing, maybe that is what the JCP person was trying to hint at?

huckster

Do you receive basic rate of JSA only of £90.50 per week or do you receive a disabled amount on top of the basic due to being on PIP?

sambda

To answer a couple of points asked:

Apart from the excess equity release, the main bit (the old mortgage + the SMI loan + solicitor's bill) never hits my bank account - it is done by the solicitor.  The bit that hits my bank account will probably be less than £1000.  Had to build a bit extra into the amount we asked for as the application was a while back and we weren't sure how many more mortgage + SMI payments would be made between application and completion.

The (old-style) JSA I get is just the £90-ish p/w.   Nothing else.

I was really after: is the money which does come into my bank account treated as income?  It's not really income as I am paying interest (rolled up till when I die) on it.

sambda

huckster said:

Do you receive basic rate of JSA only of £90.50 per week or do you receive a disabled amount on top of the basic due to being on PIP?

Basic amount only.

sambda

born_again said:

Would the equity release money go via your bank account anyway? Other than the excess.

No.  The solicitor both gets the ER money in their account and pays the old mortgage + SMI off themselves.  It never hits my bank.  I am satisfied that that bit will be OK.   It's whatever way the excess amount will be treated by the DWP (old-style JSA versus UC) that I wonder about - if say, one way means my £1000 excess will be used to reduce my benefit and the other way it won't.

Brie

The excess isn't income but will be counted (I believe) towards any savings that might effect your income related benefits.  So the fact that it's only £1k doesn't matter.  It's whether that with any other savings/assets takes you above any specific limits for your UC.