to be pissed off that they seem to have lots more disposable cash than me?

[JRmumma]

Just to be clear, in not 'benefits bashing' but a friend of mine who chose not to return to work after DC3 as she worked out that tax credits and housing benefit would make her family 'no worse off', seems to have lots more money than me.

To explain my situation, i have 1DC and am on mat leave at present. When i go back to work, we will have less money than we do at the moment after work travel costs and childcare is paid for. I have to go back full time to enable us to survive even though i didn't want to, but accept that children are expensive and needs must. We are also having to seriously cut back on the few luxuries that we currently have (memberships/subscriptions).

Ive just discovered that my friend has just booked her second holiday for this year. Without saying where it is for fear of outing myself, its a v expensive holiday for her and hubby. The other holiday is a European all inclusive jobby for the whole family. All 3 DC also had expensive electronics for Xmas.

This really fucks me off. Where am i going wrong? If they have enough money for exotic holidays and all the latest mod cons, why are they receiving tax credits and housing benefit? And why oh why will the only holiday i get this year be a £9.50 sun holiday if both me and DH work full time and claim nothing?

no I wasn't. I very clearly said that after the allowances, every £ in income would see a 65p deduction from benefit.

Child benefit is disregarded for Housing benefit purposes, as is DLA. It's recorded, but not counted. There is also an extra allowance for DLA recipients.

Roughly how much was your rent? Because if your only reckonable income was CTC, with just 2 children, I'm thinking you probably got full HB?

Ahh I see what you mean. No, it wasn't like that at all.

I was saying that the maximum allowance for income before deductions from the housing benefit, was £353.91.

So if they had an income of £100 per week, they would get full housing benefit, as their rent was at or below their Local Housing Allowance rate.

If they have an income of £200 per week, it would still be full benefit.

If they had an income of £354, they would lose 6p.

If they had an income of £360, they would lose £3.96

Etc.

It doesn't matter how low your income is, you can't get more housing benefit than your total rent.

I would rather live 'poorly' (no holidays, ipads etc) and not owe a penny, than try to maintain a certain lifestyle on credit cards.

OP, your friend is clearly maxing out on the plastic. You should feel sorry for her tbh. I had a friend who did something very similar. She was a SAHM whose husband worked. He didn't earn a massive amount, but they had a massive house that they'd done lots to, drove two massive Jeeps plus a van, kept horses, had holidays....I was a bit envious tbh. Over time, I noticed her house was filling up with more and more stuff, and then she was always trying to sell other stuff on eBay. Was a bit until one day she broke down over coffee, and admitted she was up to her eyeballs in debt, half of which her husband didn't know about (he thought it was only 12k- it was almost triple that) had fallen behind in repayments, was trying to flog stuff off to pay back...It was such an utter, utter mess in the end.

Would rather have cheap caravan holidays and be able to sleep at night, tbh....

Well OP, I am currently on benefits...and I cannot afford any of the things your friend and her DH can.

I don't know how they re doing it, it could be on credit and as such the whole thing might fall down around their heads in the future.

Or it could be donated and they are talking big.

The last holiday I had was in Disneyland Paris and we stayed in the most expensive accommodation with included food. But this was a gift from my in-laws in 209. I haven't had a holiday since as I cant afford it.....and for much of the time since 2009 I have been in work. Couldn't afford holidays even then.....and definitely not now.

I may be being unfair to MN, but I didn't foresee certain posters noticing that.

Our rent was only a little bit more than that, so we managed fine. I don't mind not being able to claim HB at the rate it would be for a larger property. I take it for granted that housing benefit fuck-ups can happen, so I insisted that we lived in the cheapest place that we could find, so that we could pay the rent for a couple of months on our own, without going into arrears. However, I really, really do mind people telling me that "it's easy to scam the govverment by living somewhere small, and pocketing the difference between your housing allowance and the actual rent. Bloody scroungers". I've had this in real life, even. If it ever was possible, it isn't now.

So, when I saw your post, I panicked about what the next couple of pages would contain. The resulting post compensating for the speed at which I typed it with lack of clarity. Sorry.

People keep saying this family might be in a lot of debt, which they could well be, but why on earth are they allowed to get into debt for things like holidays?

Ive known of a few cases where people have run up a huge debt, both working and on benefits, and have then declared themselves bankrupt and have barely had to pay back anything. What they do pay back barely covers the cost of administering the bankruptcy.

It's so wrong that this is allowed to happen, because it costs the rest of us in bank charges and loan interest and in tax.

We need much tighter regulation of credit in this country, it would solve a lot of problems.

I agree WooWoo

Maybe the woman does a bit of escorting on the side. Maybe the man is a gigolo on the side. Maybe they have some criminal activity going on that is currently being quite lucrative. Perhaps you could ask them if their sidelines have room for another person to get involved.

That's alright

It used to be the case that if your rent was cheaper than the LHA for your area, you could keep up to £15 per week of the difference. So a maximum of £60 per month overall.

The whole point of bankruptcy, WooWooOwl is that the individual is released from their debt at the point of bankruptcy, then is restricted for a period of time, with a payment according to earnings. So, if they are a very high earner, they would pay back a hefty amount. If they earn nothing, they pay nothing. That payment agreement/order (depending on whether the bankrupt has agreed or refused, in which case the court orders it) lasts 3 years.

During that time, if the bankrupt individual has any windfall, be it a lottery win, an inheritance, etc., then the Official Receiver can, and will, sieze it as an asset. Regardless of how much the original debt was. There was a case on a tv programme where a man had gone bankrupt had an inheritance of £90k. The OR took the lot.

Chunderella i don't think the inheritance is that large actually. Not if you consider that if they were to buy a house with it, they would still end up with a mortgage probably into retirement and have no money left over. That's assuming that the FIL doesn't decide to actually spend his own money whilst he is alive.

Talking about parents money as your inheritance also is vile IMO

Is it really only 3 years?? So if you get a high paying job/inheritance/whatever after that period you don't have to pay back any of your debt? That seems bonkers to me. I'm not saying people should be chained to debt for the rest of their lives, but 3 years is no time at all.

My closest friend went through a bankruptcy and I helped her through all of it, including going to the meetings with the official receiver. It really wasn't that hard at all, and the repayments she had to make were much more manageable than the payments she was making before that. That's a good thing for her obviously, but it only lasted three years when there's no good reason why she shouldn't continue making those payments until the full debt is paid off.

I don't see the OR taking any windfall as a problem or a difficulty in any way, that's just what should happen!

There has been no downside at all for this friend in going bankrupt, which for her sake I'm pleased about as it was only down to being naive and having a twat of an ex that that got her into debt in the first place.

But I learned quite a lot from it, and I realised that going bankrupt isn't something to fear like I had originally thought it would be. It was a very positive thing for this person, it's just unfortunate that all the other clients of the credit card companies she borrowed from are having to pay for her mistakes.

In what way? I'd be interested to know, because I was really shocked at how easy it was.

I also meant to say that she got to keep the car she was paying finance on, because the receiver took on the debt then sold the car to her parents for a pittance.

FruitSalad The Income Payment Agreement/Order is discretionary - the Official Receiver assesses your income against your outgoings (the acceptable outgoings are strictly defined - no sky TV, etc.) and looks to see what your surplus income is.

If your surplus income is less than £50 per month, then you don't tend to get an Income Payment Agreement. If it's more than £50 per month, you do.

If you get an IPA/O it lasts 3 years.

However, the OR has to decide that you must make payments under an IPA/O before you are discharged, which normally means before a year has passed since the Bankruptcy Order was made.

So, if you have less than £50 surplus on the day your OR assess your income, so don't have an IPA/O, and continue to do so for the rest of the year, you won't have an IPA/O because by that point you're discharged.

If, one day after you are discharged, you get offered a job for £500,000 per year, then the OR can't instigate an IPA/O because you're already discharged.

If you started a job a week or two before your discharge, then the OR could instigate an IPA/O.

when faced with these situations where people on benefits seem better off, I try to think past the foreign holiday/theatre tickets/fancy clothes or whatever, and ask if I'd like to swap lived on a wholesale basis.

generally that means accepting that your career will never recover, and in most cases, that you wouldn't have your own home. In which case, I'd really rather be in my position than theirs.

you may have a chip on your shoulder about receiving benefits

I don't actually. I do, however, get annoyed at people who witter on about why people on benefits should be able to have this or that. It's childish.

We need much tighter regulation of credit in this country, it would solve a lot of problems.

Double edged sword IMO. This would just mean only the rich could get credit, in the long run. And would leave those who are struggling would have no access to credit that they may need in an urgent situation. I would say that it would be better for children/teenagers in school to have a much more in depth view of finances, budgeting, and general financial planning with a view to teaching financial responsibility.

WooWooOwl, bankruptcy is only easy for people who have very few assets, very little income and unsecured debts. They are the people who bankruptcy is the most useful for, because they clearly fit the criteria of 'unable to pay their debts'.

People who have significant assets, a significant income or secured debts, will find the process much harder, because they are more able to meet some of the cost of the credit they have accrued.

My dh is a high earner, we cant survive on his salary, I have to work part time. We get NO benefits.

You're not benefits bashing but....

You are though really, aren't you?

Secretsofsanta, why can't you manage on one large salary? Is because of a high mortgage, I'm just curious.

Fair point lougle, I hadn't thought about it like that but you are completely right.

It still doesn't seem right or fair though that someone without assets can have their debt written off and be made to pay back nothing or next to nothing, and someone who has assets has to pay.

If credit was more controlled it wouldn't mean that only the rich could have credos, it would mean that no one was given credit that they can't afford to pay back. If that protects the poor from getting into debt that they can't afford, then that's a good thing surely?

It wouldn't mean that people couldn't get credit if they urgently needed it, it would just mean that they could only borrow what they are capable of paying back.

There's nothing wrong with manageable debt I don't think, and I agree that schools should do more to teach financial responsibility.