Confused about mortgage relief on JSA

JoJoB · 8 February 2009 at 10:02PM

Hello, I've been trying my best to understand the various benefits available but am still confused about a couple of things so would appreciate a bit of clarification from you peeps in the know!

My husband is likely to be made redundant in the summer - lots of the top bods in his dept have been suddenly transferred elsewhere and it is looking like his dept is going to be closed down. We are in a better position than some, in that we have very little anyway so not as much to lose! But we do have a mortgage (interest only at £360 per month).

Am I right in that my husband will be claiming contribution based JSA for the first 6 months? And then income-based?

If contribution-based will he still be eligible for the mortgage interest support after 13 weeks, or is it after 13 weeks on income-based only? Basically does he get mortgage help while on contributions based JSA or does he have to wait till he's on income-based? All the links to this on the web seem to indicate it's only availoable on income-based but I gather a lot of the info may be out of date.

Also, an article I read before christmas stated that mortgages with a capital of between £100k and £200K will be covered. Other articles I read state "up to £200k". As my capital mortgage is £92K I'd hate to think we miss out on help through having to small a mortgage!

Any help on these 2 points would be great, thanks.

Edit: Also, just realised our mortgage from Northern Rock consists of 2 different loans - one a traditional type mortgage and the other a secured loan - will mortgage relief just cover one of these, leaving us without cover for the other payment?

Oldernotwiser · 8 February 2009 at 11:31PM

JoJoB wrote: »

Edit: Also, just realised our mortgage from Northern Rock consists of 2 different loans - one a traditional type mortgage and the other a secured loan - will mortgage relief just cover one of these, leaving us without cover for the other payment?

I have an awful feeling that help with mortgage interest only covers the actual mortgage and not any further borrowing. If you don't get an answer on here, I'd post on the Benefits Board where you may find more knowledge about this.

JoJoB · 8 February 2009 at 11:57PM

Ah, well that's me screwed then.

I'd completely forgotten that when we took out the mortgage it was in this 2-part form.

Spendless · 9 February 2009 at 10:54AM

Oldernotwiser wrote: »

I have an awful feeling that help with mortgage interest only covers the actual mortgage and not any further borrowing. If you don't get an answer on here, I'd post on the Benefits Board where you may find more knowledge about this.

yes- That's how it was when I claimed it.

What's your other circs JoJoB do you work? How many hours? Do you have any children and their ages?

JoJoB · 9 February 2009 at 11:37AM

Hi spendless, I'm a sahm with a nine month old baby. I was self employed for a while then we left London and it was harder to build up my own business where we are now (lack of suitable clientele) so i did mcjobs such as working in a coffeeshop and cleaning.

Unfortunately the area we live in is so economically deprived that even these types of jobs are hard to come by atm (2 years ago I remember being in tears at finding it so hard to find ANY work, so imagine what it must be like now!) I am happy to go to work and OH would be fine doing the house husband thing, but in reality he would be the one who earns more. I have a degree but no experience doing anything above a minimum wage whereas he is a university lecturer.

He also wouldn't turn his nose up at an unskilled job to tide us over, but it would be an awful waste of his experience and all the years he has put in getting qualifications - not to mention the fact that he is very good at his job and really should stay in the field. We are prepared to move if a suitable position comes up in another part of the country - but then the flat would be in negative equity if we sold to move.

Lol, what a pickle. There are interesting schemes being suggested that might help matters if things get desperate though. I just read about some banks "postponing" mortgage payments for up to 2 years while some redundant people get back on their feet, and the Mortgage rescue scheme might be of benefit (Housing Association buying your property and then renting it back to you).

We had done so well at getting our debt level down too - just have one cc and a loan left to pay off but obviously will ahve to come to an arrangement with them too - but if it all goes pear-shaped with the house then maybe OH will be looking at bankruptcy.

As you can see I'm at the "consider all options" confused stage.

Btw - no family nearby so no cheap childcare solution for us both to work

Spendless · 9 February 2009 at 9:44PM

Inform tax credits if/when your circs change as the amount should change.

On a low income working at least 16 hours a week, you would get working tax credit so it may be worth you both looking even it is just something to tide you over.

Can you work on an evening/w'end when hubby can have the baby?

Ocean007 · 9 February 2009 at 10:37PM

Hi JoJoB,

yes, your husband will be eligible for contribution based JSA immediately that his job is made redundant (fingers crossed that doesn't happen).

Also, if you have less than a certain amount of savings (sorry, not sure how much) you can claim council tax benefit.

After 13 weeks of receiving JSA he'll be able to apply for SMI (support for mortgage interest) if he is eligible for income based JSA. This applies even if he is receiving contribution based JSA as long as he is also eligible for income based JSA ie doesn't have too much in savings.

The SMI form isn't automatically sent out so he'd need to call the jobcentre and have them post it out.

SMI used be for up to 100k, now it's for up to 200k so you would be able to claim for your mortgage. I don't know about the secured loan situation I'm afraid.

The most comprehensive SMI info I've found is at http://www.dwp.gov.uk/resourcecentre/mortgage-interest-changes.pdf It's worth checking out.

Yes, contribution based JSA lasts 6 months, then he'll need to request income based JSA.

Masses of info about claiming benefits for families & children at the CAB website: http://www.adviceguide.org.uk/index/life/benefits/benefits_for_families_and_children.htm

Info on redundancy here:
http://www.adviceguide.org.uk/index/life/employment/redundancy___an_introduction.htm

Info on benefits here:
http://www.adviceguide.org.uk/index/life/benefits.htm

Hope that helps.

JoJoB · 10 February 2009 at 12:12AM

Thankyou very much indeed for the above info Ocean and Spendless, much appreciated.

Ocean007 · 10 February 2009 at 12:20AM

You're very welcome. Hope the info saves you some time & money. :0)

Good luck with it all.

cazzybabe · 10 February 2009 at 12:08PM

Hi

I am trying to stay one step ahead as it is looking more likely that my hubby is to be made redundant.....

I understand how the SMI should work although the link doesnt appear to work now for me

, however, there appears to be a discrepancy on which JSA is entitled to claim/recieve it after 13 weeks.

The jobcentre pages talk of income based JSA being entitled to claim - where does that leave the contributions based JSA claimants - of which i'm sure there would be a lot more than just my hubby....

If anyone could shed light on this i would be most grateful...

Sorry tried to post link from jobcentre page but can't...

Ocean007 · 10 February 2009 at 1:47PM

Ocean007 wrote: »

After 13 weeks of receiving either type of JSA he'll be able to apply for SMI (support for mortgage interest).

Hi Jojo,

I've found out today that the info above that I gave yesterday is not quite accurate and things are a little more complicated (of course they are :rolleyes:!). (I've updated my post above so it is more accurate).

When your husband applies for JSA he'll be assessed for contribution & income based JSA. If he's eligible for both, it will be noted on his file but he will only receive one, contribution based (you can only ever receive one at a time).

If he's eligible for income based JSA, even though he is receiving contribution based JSA, he will be able to receive SMI after 13 weeks of signing on.

If however you have savings that take you over the threshold for income based JSA he will not be eligible to receive SMI after 13 weeks. He would be eligible to receive contribution based JSA for 6 months and then could apply for income based JSA and if he was eligible for IB JSA, the 13 week wait would begin then.

Phew! It's a minefield.

Confused about mortgage relief on JSA

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