dave

Jobseekers Allowance - Unfair For Savers

55 posts in this topic

I was speaking to a friend who is saving to buy a place in the near future. He has stayed home with his family even after he got married, quite acceptable within the asian community. Young couples tend to stay at home, hopeing to leapfrog into a home than can comfortably afford.

He is now between jobs and wants to claim jobseekers allowance. Which is apparantly means tested, and with nearly 35k saved up, he is only likely to get his national insurance contributions paid. Had he already owned a house, which would be worth considerably more than his savings, he would be more likely get more benefits than he would get now. I know they look towards your house as capital, and this could affect any claim, but I think it unlikely they will ask someone to sell there house and live of the proceeds, as the government will only have to re-house them anyway.

I believe the current benefits threshold of saving allowance is 6k, after that, it will start affecting the amount of benefits received. They need to raise this considerably for non-homeowners.

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with nearly 35k saved up

Um, frankly, with £35,000 in the bank I should think he's got quite enough not to need to claim JSA, especially as he is living at home.

Had he already owned a house, which would be worth considerably more than his savings, he would be more likely get more benefits than he would get now. I know they look towards your house as capital, and this could affect any claim

I think you've got it the wrong way round. I know when my Dad had a spell of umemployment a couple of years back, he couldn't claim jack-sh*t because he was a home-owner.

Why is he even claiming any benefits at all?

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He is now between jobs and wants to claim jobseekers allowance. Which is apparantly means tested, and with nearly 35k saved up, he is only likely to get his national insurance contributions paid. Had he already owned a house, which would be worth considerably more than his savings, he would be more likely get more benefits than he would get now. I know they look towards your house as capital, and this could affect any claim, but I think it unlikely they will ask someone to sell there house and live of the proceeds, as the government will only have to re-house them anyway.

Why doesn't he give a cheque to his mother or brother for 35K, then claim to have no assets, that way he'll be able to claim his 65 quid a week.

If anyone ask tell them it was a gambling debt he had to settle.

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Why doesn't he give a cheque to his mother or brother for 35K, then claim to have no assets, that way he'll be able to claim his 65 quid a week.

If anyone ask tell them it was a gambling debt he had to settle.

My question: why should my taxes go to support yet another person that does't need support?

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Um, frankly, with £35,000 in the bank I should think he's got quite enough not to need to claim JSA, especially as he is living at home.

I think you've got it the wrong way round. I know when my Dad had a spell of umemployment a couple of years back, he couldn't claim jack-sh*t because he was a home-owner.

Why is he even claiming any benefits at all?

OK, to answer your first comment. He does not want to live at home, he is only doing so, inorder to save a deposit for a house. He has made alot of sacrifices along the way. There is no way he could of saved that kind of money, if he had to rent a house. He is basically living at home rent free. His family do not want him to contribute, they just want him to be financially secure so he can move out.

To answer your next question, see above.

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My question: why should my taxes go to support yet another person that does't need support?

Could say the same about the Royal family and upper class land owners who avoid tax with clever accounting and rule bending.

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My question: why should my taxes go to support yet another person that does't need support?

That is a bit cynical, I was pointing out that the whole means tested system is rubbish. Had he owned a house (not an expensive one), he would likely receive benefits. Just because he has got 35k, he is unlikely to recieve the benefits a homeowner with no savings receives. And the homeowners equity is likely to be worth more than 35k.

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Had he owned a house (not an expensive one), he would likely receive benefits.

You are wrong in this and unless you have any first-hand experience to back this up I suggest you stop saying it.

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He is in exactly the same position many STR'ers are going to find themselves in should they be made redundant or just lose their jobs.

The will be shelling out 1k a month of their savings in rent, whereas a home owner only has to pay the interest on his mortgage for nine months then the DSS take over and pay it for him.

Buying a house in a recession is a good deal provided you have 9 months of cash to get the the DSS thresholds.

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That is a bit cynical, I was pointing out that the whole means tested system is rubbish. Had he owned a house (not an expensive one), he would likely receive benefits. Just because he has got 35k, he is unlikely to recieve the benefits a homeowner with no savings  receives. And the homeowners equity is likely to be worth more than 35k.

Well, why should my taxes go to support someone with a fixed asset worth hundreds of thousands of pounds (they can sell it and buy something cheaper) OR £35k in savings (they can spend it)? THEY DON'T NEED SUPPORT!

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You are wrong in this and unless you have any first-hand experience to back this up I suggest you stop saying it.

I know someone who works at the jobcentre who deals with claims, I will get the ruling on this and get back to you.

But let me ask you this, say if someone lived in a crappy 2 bedroom terraced worth 50k and a rubbish area. Then they found themselves unemployed, needing money to support family etc, do you think he will recieve no benefits at all? Or do you think they would tell the person he needs to remortgage if he needs money, I doubt it very much.

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if someone lived in a crappy 2 bedroom terraced worth 50k and a rubbish area. Then they found themselves unemployed, needing money to support family etc, do you think he will recieve no benefits at all?

No, he would be eligible for some benefits, like JSA for example, but as your brother will have found out, JSA would only cover the tiniest of mortgages and it is certainly not enough to live on. He would also get child benefit, depending on the age of the children and whether they were in full-time education.

The govt stopped paying your mortgage interest for you if you became unemployed a long time ago. Why do you think so many people were repossessed in the last crash? Because exactly what you describe happened, people lost their jobs, couldn't pay the mortgage and had their houses repossessed. There were not then, nor are there now, any handouts to prevent this from happening.

A renter can get housing benefit, a homeowner cannot.

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The govt stopped paying your mortgage interest for you if you became unemployed a long time ago. Why do you think so many people were repossessed in the last crash? Because exactly what you describe happened, people lost their jobs, couldn't pay the mortgage and had their houses repossessed. There were not then, nor are there now, any handouts to prevent this from happening.

A renter can get housing benefit, a homeowner cannot

You are very wrong here. In the last recession the Gov paid interest only on all unemployed peoples mortgages, and incidently single parents due to divorce where the wife or partner kept the house.

How do I know this, well.

In the last recession I worked in the building industry and many cottoned onto this scam. I noticed a lot of the lads leaving their partners and renting bedsits. The reason was that is was a scam.

They left their wives, who then claimed DSS and that covered the interest on their mortgage. The ex rented a bedroom off a mate for 50 quid a week and claimed poverty. So he went from struggling to pay his mortgage high interest rate to having it paid and keeping the rest of his earnings.

If he was caught in his ex's house by the DSS they would just say they are trying to get back together and for that they would get a pat on the back.

You are wrong, any house purchased before 1995 you get your mortgage interest paid immediately when unemployed, however after 1995 you must wait nine months.

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You are wrong, any house purchased before 1995 you get your mortgage interest paid immediately when unemployed, however after 1995 you must wait nine months.

Laurejohn, are you sure. I don't think you get anything, otherwise why would people bother to take out unemployment insurance. My sister in law just had to sell her house because her business failed. Also, because she now has more that £8k in capital, she gets no support, even thouigh she's renting.

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from the shelter website.

When can ISMI be paid?

Most people who are unemployed or on a very low income can get help. However, if you got your mortgage after you started claiming benefits, you may not be eligible. If you already had your mortgage, but increased it after you started claiming, you will only get interest payments on the amount you originally borrowed. Loans for essential repairs or improvements may be covered even if you take them out after you claim income support or job seeker's allowance.

You can't get any money to cover the capital you originally borrowed, or any investment that is linked to your mortgage (such as an endowment policy, pension or ISA). You can ask your lender for a statement of your mortgage costs, and how much of what you pay is interest.

How do I claim?

Income support mortgage interest is paid by the Benefits Agency. If you want to apply, you will have to fill in a form (MI 12), giving details about your situation. You will have to provide proof of your income, details of your financial situation and any related paperwork. Your lender will have to complete some of the forms confirming how much interest you pay. If you need help applying, get advice.

When will I get the first payment?

People over 60 are entitled to help immediately, but there are waiting periods for everyone else. If you took out your mortgage after 2 October 1995, payments normally won't start until 39 weeks after you claim. How ever, you may get payments sooner if:

you got your mortgage before 2 October 1995

you are a carer and the person you look after is eligible for certain benefits

you are a single parent whose partner has died or left

you are an offender and are waiting for a trial or sentence

your have mortgage protection insurance but it won't pay because of a medical condition you already had when you took out the insurance

your mortgage replaces a previous mortgage on the same property, which was taken out with the same lender on or before 2 October 1995

If you are in one of these situations, you will probably be eligible for no interest at all for the first 8 weeks, half of the interest for the next 18 weeks, and all of the interest after 26 weeks. You will have to pay for any interest that is not covered from any income or savings you may have.

How is it paid?

Income support mortgage interest is usually paid directly to your lender at the end of every four weeks. This is the case even if your mortgage payments are due on a monthly basis, so you may appear to be behind with payments. The rules about how much you get are complicated

If you are separated and it is possible for you to receive some help with mortgage payment from your ex-partner, you will need to get advice as to how these payments are to be made. They may affect the amount of benefit you are entitled to.

If your home is considered to be too expensive or too large for your needs, any payments you receive may be reduced to cover the costs you would have if you could reasonably be expected to move to a more affordable home. If you are in this situation, get advice. It may be possible to show that it is not reasonable to expect you to move somewhere else.

The amount you get is also based on the average interest rate at the time you make your claim. If your mortgage interest rate is lower than average all of the interest will be covered, but if it is higher than average you will have to pay the difference from any income or savings you may have. It might be possible to negotiate with your lender if the difference is very small and you will be able to pay it off soon.

What about housing benefit?

Housing benefit only covers rent payments, so you can't claim HB to pay your mortgage. However, if you bought your home through a shared ownership scheme, you may be able to get HB to help pay the rent on the share you do not own.

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Maybe its because his paid his contributions ?

Absolutely BB. You've paid your contributions.

I was made redundant once. I had paid over ten years of income tax and NI - half of it at 40%. I am a qualified and experienced engineer - I wasn't going to be unemployed for long. So you go to sign on because you're down on your luck and need a little help to tide you over and they treat you like second class scum. It's like they are giving out their own money. Fortunately I was only out of work for a few weeks.

Until it's happened to you then you simply don't know what a miserable experience it is.

The real scandal in this country is the 2.6 (2.7?) million people on 'incapacity' benefit.

Anyone else constantly stumbling across 'incapacitated' people in the street?

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The reason you must have unemployment insurance is to tied you over for the 9 months they dont pay. Thats what I have and I think its well worth it.

I bet there are literally thousands of households with single parents who are getting the interest paid on their mortgages today.

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The real scandal in this country is the 2.6 (2.7?) million people on 'incapacity' benefit.

The problem is that the doctors/GPs will write out a sicknote for any malingerer that walks through the door. I think doctors should stop giving out sicknotes like they're going out of fashion.

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If Doctors did not produce incapacity notes then how on earth would the Labour Party be able to hide the unemployment rates?.

It makes sense to say that anyone who is out of work is incapacitated, they must be else they would be lapping up all those top jobs the British Workers dont want.

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Lots of people can get off work by being stressed, depressed or anxious

Thats why antidepressents are one of the top drugs given out amongst all age groups.

How many people do you know are on them? Why?

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He is in exactly the same position many STR'ers are going to find themselves in should they be made redundant or just lose their jobs.

The will be shelling out 1k a month of their savings in rent, whereas a home owner only has to pay the interest on his mortgage for nine months then the DSS take over and pay it for him.

Buying a house in a recession is a good deal provided you have 9 months of cash to get the the DSS thresholds.

So how is it that if you have STR'd and have a big buffer in the bank you are worse off than an OO who has £0 savings.

As an STR its given me a lot more confidence with that regard. In fact it was one of the driving forces behind the whole thing, a serious bike accident meant I couldn't work for 3 months, didn't get paid for 2 months and was getting a bit worried. If the same thing happened now I wouldn't be worried at all, make a small dent in the savings but nothing significant (in fact wouldn't be a problem at all as the wife has a decent job also).

Scenario 1. Me as an STR lose my job, I get off my **** and get looking for a job, takes me 3 months which is fine as I have more than enough from the equity I have released.

Scenario 2. Mr OO loses his job, he gets off his **** and goes looking for a job, at month 2 as he has no savings he has the bank ringing him up as he hasn't paid the mortgage and has a large overdraft built up to feed the family, he suffer stress which effects his sleep, he keeps missing interviews or doing badly because of that lack of sleep from all the stress. After 6 months he has huge debt and the bank sends the boys round, they reposess the house and he's on the street.

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I was speaking to a friend who is saving to buy a place in the near future. He has stayed home with his family even after he got married, quite acceptable within the asian community. Young couples tend to stay at home, hopeing to leapfrog into a home than can comfortably afford.

He is now between jobs and wants to claim jobseekers allowance. Which is apparantly means tested, and with nearly 35k saved up, he is only likely to get his national insurance contributions paid. Had he already owned a house, which would be worth considerably more than his savings, he would be more likely get more benefits than he would get now. I know they look towards your house as capital, and this could affect any claim, but I think it unlikely they will ask someone to sell there house and live of the proceeds, as the government will only have to re-house them anyway.

I believe the current benefits threshold of saving allowance is 6k, after that, it will start affecting the amount of benefits received. They need to raise this considerably for non-homeowners.

If you were made redundant or otherwise made unemployed involuntarily you are entitled to claim job seekers allowance for 6 months and it is not means tested.

All you are expected to do is sign on weekly or fortnightly and keep a record of your efforts to find employment. You will be expected to periodically attend interviews at the job centre to discuss your efforts to find work.

After 6 months if you are still unemployed you have to revert to claiming different benefits which are means tested.

Limpet B)

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