Rendundancy and Claiming Benefits

Batty_3

New Member here!

Firstly: applogies if something like this has been posted before (I'm sneaking on in my break and don't have time to trawl the forums)

There’s a real chance of me being made redundant this year and it looks like I’ll get about a years salary (which is nice)

However my ex left me in serious debt and as a result I have to pay around £1000 a month to all the creditors (including the balance of a mortgage that was re-possessed some 10 years back and sold for under it’s market value)

I’ve written to each creditor and they have given me a figure that they will accept as a final settlement.

So I was planning on using the money to pay everyone off so that my only outgoings are rent and utilities etc.

I’ve been told I’ll get JSA (contribution based) but no tax credits for the children due to my earnings the previous year.

So if I only had £6000 left in the bank, part of my rent and some of my council tax would be paid but not all as I rent privately.

But I’ve been told if I pay off my debts, I’m deliberately ‘depriving myself of disposable income’!

The only option is to just claim the JSA and try and eek out the money, but after a year this will have dried up. I’d be on JSA (income based) by then (that’s if they’d allow it)

So I’ll have £59 a week to live on, still be short for rent and utilities and have the bailiffs banging at the door for the 30K I owe…..

I’ve had bankruptcy advice, but if I do that I’ll be homeless as my letting agency doesn’t allow bankruptees to rent. (I had a job to find anywhere that would take children!)

Surely paying off my debts would be the most sensible thing? But why does the DSS see this as a deliberate attempt to gain money? For 30 years I’ve paid into the system, so I’m not claiming anything I’m not entitled to am I?

Has anyone else come across this ‘depriving of income’ situation?

Any advice would be welcome

Batty x

exil

See

http://www.dwp.gov.uk/housingbenefit/manuals/hbgm/parts/ptbp_01c.asp#bp_1700

(these are the rules the benefit officers are meant to follow)

P1.703 A claimant should still be regarded as having deprived themself of a capital resource if they have disposed themself of it by way of a gift to a third party. However, they should not be regarded as depriving themself of it if they did it to
HB(SPC) Reg 47; CTB(SPC) Reg 37

• reduce or pay off a debt they owe

- so it looks like this is a legimate use of capital. However, seek advice from the CAB. The rules above apply to HB and CTB - I'm assuming it's similar for other benefits but it's better to get some expert advice!

zzzLazyDaisy

I can't help you with benefits advice, someone else will be along soon about that, I am sure.

However if you can get alternative employment quickly, you will have an income to support yourself and your children, and will then be able to use your severance money to pay off your debts. You will need to check the terms of your severance package as there may be a restriction on working for a competitor for a certain length of time.

Also, re tax credits - it is true that your claim is normally based on your P60 earnings for the previous year - but if your income has changed significantly you can notify them of this and it will be taken into account (this is what my sister did, but again this is anecdotal and you really need someone informed about welfare rights to confirm this)

mitchaa

Any particular reason why you are even thinking about the JSA route?

Why not just get another job

If i had prior warning of redundancy, i'd have my CV into several other companies quicker than a blink of an eye. No way would i even think about a life on benefits after being in employment.

Made redundant from Job A 1 week, start job B the week after.

Or is that not an option??

Batty_3

mitchaa wrote: »

Any particular reason why you are even thinking about the JSA route?

Why not just get another job

If i had prior warning of redundancy, i'd have my CV into several other companies quicker than a blink of an eye. No way would i even think about a life on benefits after being in employment.

Made redundant from Job A 1 week, start job B the week after.

Or is that not an option??

The work I do is specialised and there's only one employer of this type of work in this country.

I've to have some surgery done this year, but can't say when and I don't think I will get employment knowing I'll need months off.

I could go back to till work I suppose, but it wouldn't cover the debts let alone the rent, I get no money from the ex for the kids as he's in Prison and my current partner is on DLA and I need a job that is flexible so that if he needs me I can just clock off and get to him. My present employer allows me to build up time so that if my partner has a fall I can go to his place and see to him and then clock back on. I doubt if any other employer will be that flexible, but until he gets a carer I'm all he's got

Batty_3

exil wrote: »

See

http://www.dwp.gov.uk/housingbenefit/manuals/hbgm/parts/ptbp_01c.asp#bp_1700

(these are the rules the benefit officers are meant to follow)

P1.703 A claimant should still be regarded as having deprived themself of a capital resource if they have disposed themself of it by way of a gift to a third party. However, they should not be regarded as depriving themself of it if they did it to
HB(SPC) Reg 47; CTB(SPC) Reg 37

• reduce or pay off a debt they owe

- so it looks like this is a legimate use of capital. However, seek advice from the CAB. The rules above apply to HB and CTB - I'm assuming it's similar for other benefits but it's better to get some expert advice!

That's the problem, I live in a county where they introduced LHA not HB and they will only pay what they would pay if I was in a council house (£90/week) this leaves me some £200 a month short so I need to hang onto to some capital for that.....

I suppose I will have to go itno town and see the CAB?

dmg24

Batty wrote: »

The work I do is specialised and there's only one employer of this type of work in this country.

I could go back to till work but it wouldn't cover the debts let alone the rent, I get no money from the ex for the kids as he's in Prison and my current partner is on DLA and I need a job that is flexible so that if he needs me I can just clock off and get to him. My present employer allows me to build up time so that if my partner has a fall I can go to his place and see to him and then clock back on. I doubt if any other employer will be that flexible, but until he gets a carer I'm all he's got

Hi Batty,

Welcome to MSE.

There is no need to justify yourself to anyone on here. We all have different situations, and yours means that it would take more time to find work than others.

Deprivation of Capital is subjective, and whilst paying off debts is not usually included in this category, for a decision on your individual situation, you would need to contact the DWP. I would get any information given by them in writing, in case of problems when you make a claim.

Best of luck x

Batty_3

dmg24 wrote: »

Hi Batty,

Welcome to MSE.

There is no need to justify yourself to anyone on here. We all have different situations, and yours means that it would take more time to find work than others.

Deprivation of Capital is subjective, and whilst paying off debts is not usually included in this category, for a decision on your individual situation, you would need to contact the DWP. I would get any information given by them in writing, in case of problems when you make a claim.

Best of luck x

Soory is DWP the DSS? I haven't been out of work for about 20 odd years, I had to look up what JSA was

dmg24

Batty wrote: »

Soory is DWP the DSS? I haven't been out of work for about 20 odd years, I had to look up what JSA was

Yep, DWP (Department of Work and Pensions) is the old DSS, unless you're in Northern Ireland, where I think it is called something different! x

Edit: In NI, it is the Social Security Agency, which comes under the Department for Social Development. You learn a new thing everyday! x

Voyager2002

Welcome Batty,

Do you live in England? The law is different in other nations of the UK, so it does make a difference to the advice that should be offered to you.

I think that in many ways you will find the benefits system more favourable to your situation than you fear, but since I am in England and you may not be I shall allow others to comment, who know the law better than me. But please read the sections of this board about debt, since you should be able to get your creditors to freeze interest and accept reduced payments when you are out of work. And when there is a significant change in your income then your tax credits can be adjusted rapidly to reflect the new situation, although I don't know how they would treat a substantial redundancy payment.

Would self-employment be an option for you?

Batty_3

Voyager2002 wrote: »

Welcome Batty,

Do you live in England? The law is different in other nations of the UK, so it does make a difference to the advice that should be offered to you.

I think that in many ways you will find the benefits system more favourable to your situation than you fear, but since I am in England and you may not be I shall allow others to comment, who know the law better than me. But please read the sections of this board about debt, since you should be able to get your creditors to freeze interest and accept reduced payments when you are out of work. And when there is a significant change in your income then your tax credits can be adjusted rapidly to reflect the new situation, although I don't know how they would treat a substantial redundancy payment.

Would self-employment be an option for you?

Yes England and we already have the LHA in force here as a pilot shceme for over a year now.

The work I do could only be done for the very employers that might be making me redundant! If there is a Redundancy Situation, they are not allowed to employ self employed/sub-contractors as they have a higher charging rate and the Unions would be up in arms.

Apart from this job, I'm only qualified to do shop work. Obviously I'd look at re-training if offered, but £59 a week for me and two kids to live on doesn't cover the costs of any travel on public transport I may have to make. It currently costs me around £90 a week to get into town to work, so if I took a lower paid job it would have to be local.

I really posted this thread as I was concerned about the disposable income bit. It was the CAB that told me that I couldn't spend it on Debts. Unfortunately, because the ex defaulted on payments, the insurances on each credit card were cancelled so it's up to me to pay them.....

If I do get laid off I was looking at this as a positive thing to be debt free for the first time in my working life. I will have to check and re-check the rules I guess?

Thanks for everyone's help - fingers crossed I'm not one of the 400 picked to go...