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Finances,distributing it and where i stand with housing benefit


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I am currently in receipt of JSA. I am shortly due to recieve a lump sum and therefore will have to sign off JSA......

 

Living off the money to pay rent and general living and debts will i qualify for HB after my money has run out in maybe 2-3 months time (I am looking to invest some of the money into becoming self-employed and might need to apply for HB to help towards my rent!).......

 

My query is, I can show (paper trails) where say 50% of my money is going (i.e. rent,bills and some debts) but with the other I owe like family, friends,loan shark etc which i have built up over the years and promised to pay....as i do not have a paper trail for this part, will it effect future applications for HB?

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Hi confusedbunny,

 

Depending on how much capital you have? Will depend whether you qualify for HB? If you have under 6000 and age between 18 and 60 then

yes u should qualify, if you have over this amount you can still qualify but has to be under 16000.

 

Hope this helps any more questions just ask :)

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There is something called deprivation of capital. They may assume you have the money (notional capital) if they believe you've spend it in such a way to get benefits. (or more than you currently receive)

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There is something called deprivation of capital. They may assume you have the money (notional capital) if they believe you've spend it in such a way to get benefits. (or more than you currently receive)

 

yes, that my big concern because as i cannot show how the other 50% has been distributed etc will it effect my applcation? and yes, thats the word i am looking for "deprivation" of capital, whats deemed as "reasonable"? I can just see a hurdle coming over this but i must pay it back!

 

As far as a paper trail is concerned, i can show show where 50% of it has been allocated but it could be understandably "percieved" as me stashing the remainder, as i have no evidence!!! dilemma!!

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There is something called deprivation of capital. They may assume you have the money (notional capital) if they believe you've spend it in such a way to get benefits. (or more than you currently receive)

 

what does "notional deprivating" mean? The capital is from the sale of my main residence......(i will not have to pay capital gains tax to HMRC will i?)

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It's nothing to do with capital gains tax.

 

With money you've come into and benefits, you're expected to use the money to live off. You can use the money for day-to-day expenses; (food, bills, etc) but if you use the money to pay off more than the minimum repayments for bills and debts, you may be treated as having the money - this is where notional capital comes in. That means they claim that you still have this money whether you do or not.

 

You need to keep receipts so you can say "this is where £x has gone" and means that if your capital goes down enough for you to claim benefits, you can tell them where the money has gone.

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Ok, if you receive HB already as am thinking you do now? (sorry i should of known this as you were on JSA) HB will not be paid if the capital is over 16000 if you spend your capital on i.e holidays, car, eletrical goods ie new tv washer etc then you do keep your reciepts HB will want to see bankstatements in any case so pay

for stuff on your debit card ( you can not get in trouble for spending your own monies) if you transfer they money into another bank account that is different! My advice to you is if you get you capital under 10,000 Fill in a new housing benefit form and put your only income is your savings. And yes you can not go out and spend all your money just to get benefits, but as you will have to use this capital as income that too is unfair, that is why i am telling you contact your local hb office once your capital has decreased. And if you have capital under 10,000 then contact them now. Its all about how much savings ( capital) you have. I work in benefits :)

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It's nothing to do with capital gains tax.

 

With money you've come into and benefits, you're expected to use the money to live off. You can use the money for day-to-day expenses; (food, bills, etc) but if you use the money to pay off more than the minimum repayments for bills and debts, you may be treated as having the money - this is where notional capital comes in. That means they claim that you still have this money whether you do or not.

 

You need to keep receipts so you can say "this is where £x has gone" and means that if your capital goes down enough for you to claim benefits, you can tell them where the money has gone.

 

ok, so for paper trails stuff like rent,bills etc, thats fine. if i was to say have a family holiday then claim HB 4 months down the line, would they say that was "irresponsible" spending?

 

if i was to use the money for a holiday etc could i argue about my "intnentions" at the time? as i could possibly do well self-employed that i will not have to ask for HB assistance and effectively i do not have to answer my spending habits, paper trail or not...i am just looking at all angles at the moment as i do not want to end up homeless because i cant pay rent or get assistance at the very least due to my spending of the capital....

 

For non-paperwork trails-does that mean i will be flately refused HB forever or until they think the caital amount "should" have gone (calculating general living expenses" then i can re-apply after?

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Ok, if you receive HB already as am thinking you do now? (sorry i should of known this as you were on JSA) HB will not be paid if the capital is over 16000 if you spend your capital on i.e holidays, car, eletrical goods ie new tv washer etc then you do keep your reciepts HB will want to see bankstatements in any case so pay

for stuff on your debit card ( you can not get in trouble for spending your own monies) if you transfer they money into another bank account that is different! My advice to you is if you get you capital under 10,000 Fill in a new housing benefit form and put your only income is your savings. And yes you can not go out and spend all your money just to get benefits, but as you will have to use this capital as income that too is unfair, that is why i am telling you contact your local hb office once your capital has decreased. And if you have capital under 10,000 then contact them now. Its all about how much savings ( capital) you have. I work in benefits :)

 

I do not recieve HB at the moment as i own my home and get SMI payments, i am going into rental (hence possible assistance with HB in the future) ok, so its not how you spend it, its about how much savings you have when you applly for HB? (No matter the gap in between getting the capital and it decreasing?.....)

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Iy depends on the type of holiday. If it's just say, a weekend away to somewhere in the UK, it shouldn't be a problem. It might be a problem if it's some really expensive holiday abroad.

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Iy depends on the type of holiday. If it's just say, a weekend away to somewhere in the UK, it shouldn't be a problem. It might be a problem if it's some really expensive holiday abroad.

 

but could i not argue thats "personal preference or my choice at the time" as i am not claiming HB at the time and living off the monies?.....(as i say, i may earn enough self-employed so how i spend my capital at the time and my current financial position, as my "intentions" would be to pay my way not assisted, right?....its the non-paper trail i am concerned about, would that not be up for question regardless of my "intentions" at the time or am i allowed to spend my money as i please when i am paying my way, not assisted?

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Effectively what you want to do is to clear debts off in full, have a holiday and keep some money back for a self employed venture so that you are able to say that you have very little capital left and want the taxpayers to help to pay your rent?

 

I don't know about you but doesn't that sound a little unfair?

 

Here you have capital which you could easilly live off, pay your bills as you have been doing, and have the freedom of Big Brother not being able to look at you every day.

 

You are presumably under no legal obligation to repay these debts?

If you are not then you cannot justify settling them as you propose.

 

I think you would be annoyed if you heard that someone was doing exactly what you intend if it was your tax that you had paid was being used to subsidise their living costs. You won't go far wrong if you always keep in your mind 'Is it fair - Is it just - Is it reasonable?

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Effectively what you want to do is to clear debts off in full, have a holiday and keep some money back for a self employed venture so that you are able to say that you have very little capital left and want the taxpayers to help to pay your rent?

 

I don't know about you but doesn't that sound a little unfair?

 

Here you have capital which you could easilly live off, pay your bills as you have been doing, and have the freedom of Big Brother not being able to look at you every day.

 

You are presumably under no legal obligation to repay these debts?

If you are not then you cannot justify settling them as you propose.

 

I think you would be annoyed if you heard that someone was doing exactly what you intend if it was your tax that you had paid was being used to subsidise their living costs. You won't go far wrong if you always keep in your mind 'Is it fair - Is it just - Is it reasonable?

 

I think you have totally misunderstood me!! I have paid my taxes too all my life up until one year ago and as i say, i am going back to work! So are you saying, that if i am not claiming HB, living off MY money to pay general day-to-day bills and rent and not claiming any assistance, that i am not entitled to a holiday like you? as i say, its possible just part HB, not the full HB as i will be working 40 hours a week! Sorry if you interpreted it as being offensive.......:(

Edited by confusedbunny
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I think you have totally misunderstood me!! I have paid my taxes too all my life up until one year ago and as i say, i am going back to work! So are you saying, that if i am not claiming HB, living off MY money to pay general day-to-day bills and rent and not claiming any assistance, that i am not entitled to a holiday like you? as i say, its possible just part HB, not the full HB as i will be working 40 hours a week! Sorry if you interpreted it as being offensive.......

 

Of course you are entitled to a holiday, just as long as it is paid for out of your own money and not out of this capital with the intention of reducing it to possibly claim HB.

By asking the questions on here you are demonstrating that you have it in your mind now before you get the money on how you can use it AND be able to claim HB. Is that not being intentional deprivation?

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Of course you are entitled to a holiday, just as long as it is paid for out of your own money and not out of this capital with the intention of reducing it to possibly claim HB.

By asking the questions on here you are demonstrating that you have it in your mind now before you get the money on how you can use it AND be able to claim HB. Is that not being intentional deprivation?

 

No, i am looking at the bigger picture for my own sake. I am looking at "if" i end up in that situation.....thats all.....as no-ones job is guaranteed :( nor, is good health! thats how i ended up like this for the last year!! so i am talking from personal experience.....

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yes, thats my thoughts exactly!

 

But you will still have to account for the use of the money that you receive to the Council for any HB claim, even if that claim is made months after you have received that money and 'spent' it. You have to show that you did not have it in your mind at any time that spending it would give you the right to claim HB.

By asking the what 'if' question on here you are demonstrating that you do have it in your mind.

 

If you are that concerned about your possible inability to pay all of your rent at some time in the future, why don't you invest the money when you get it, so that it is there as a buffer to use to live off until you can find suitable employment?

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If you are not in the benefits system, then its does not matter what you spend your money on, they only request 2 months bank statements when u submit a claim,

they only want to know monies you get my in the future not in past as when you recieved the funds you were not on HB ben.

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When you apply for your HB in the future if you need to, then you will more than likely be asked to provide bank statements etc for the 3 months prior to making the application.

The items that are more than likely to be allowed are items that need to be replaced e.g fridge freezer not working efficently or car broke down and new vehicle required. Paying back debts is different, e.g you owe £5 on a credit card unless you have a letter from the credit card company stating that the debt is required to be repayed with immediate effect on receipt of the money that can be treated as paying off debt to reduce your capital. Again unless you have a legal document from friends or family stating that you borrowed the money and that it is to be repaid in full on receipt of the money then that is unlikely to be allowed.

Going on holiday is a luxury so that is also unlikely to be allowed (it is a luxury regardless if you are employed or unemployed).

 

I used to process IS claims and have very little knowledge of HB and CtB but would imagine it would be considered in a similar manner and yes I have sat down with a team leader previously and gone through every receipt provided by a customer and double checked figures for the calculation, it was over 10 years ago but things haven't really chnaged that much :o

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When you apply for your HB in the future if you need to, then you will more than likely be asked to provide bank statements etc for the 3 months prior to making the application.

The items that are more than likely to be allowed are items that need to be replaced e.g fridge freezer not working efficently or car broke down and new vehicle required. Paying back debts is different, e.g you owe £5 on a credit card unless you have a letter from the credit card company stating that the debt is required to be repayed with immediate effect on receipt of the money that can be treated as paying off debt to reduce your capital. Again unless you have a legal document from friends or family stating that you borrowed the money and that it is to be repaid in full on receipt of the money then that is unlikely to be allowed.

Going on holiday is a luxury so that is also unlikely to be allowed (it is a luxury regardless if you are employed or unemployed).

 

I used to process IS claims and have very little knowledge of HB and CtB but would imagine it would be considered in a similar manner and yes I have sat down with a team leader previously and gone through every receipt provided by a customer and double checked figures for the calculation, it was over 10 years ago but things haven't really chnaged that much :o

 

wow, so even if i am not claiming HB i have "rules" opposed to my spending habits,(even if i dont intend to claim HB!)..(the reality is, most of us do not a financial trail of every penny we spend and then "justifying" it!).How is that acceptable? So effectively, joe bloggs, who works (does not claim any benefits) must account for how he spends his money as he please's just incase in the future his circumstances change and he cannot "prove" his spending 100% along the way he will be refused HB and made homeless?.....it does not make sense....I'm glad i bought this subject up as its a very grey area of confusion for me..:(

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You can do whatever with your money; but will have to show where it's gone. They will then decide if you have deprived yourself of capital in order to get benefits.

 

I realise that but what if your intentions is to not claim HB but you make say wrong judgements,work is slow and you live off the money etc then end up with it all dwindled.....where do these "rules" of capital deprivation "in order to get benefits" if that is not your intentions? do you see my point?

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Capital rules over £16000 nothing. £6000-£16000 you get £1 deducted for every £250 you are above £6000. The deduction of £1 for every £250 is there because they expect you to spend your capital to live. They would also expect for this to happen and over time the capital be reduced and your benefits to rise as the capital come down.

 

Anything close to or over the £6000 lower limit will be checked. Usually this is 3 months worth of bank statements. But if you start a business they may be more thorough and you will probably have to produce all statements for the duration of the business.

 

You may want to try and start getting help for that now I've heard the Princes Trust or similar are helpful for small business setup advice.

 

Now once you 've signed off it's up to you what you do with your money. As long as it's not taking the Michael say like spunking £50,000 on a fancy new hair do, handbag and a pedicure.

 

If you get into to trouble for paying down your debts I'd write to our lovely PM a.k.a. his conference speech

 

Mr Cameron had planned to say: ‘The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.’

 

That was changed to: ‘The only way out of a debt crisis is to deal with your debts. That’s why households are paying down their credit card and store card bills.’

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