Benefits

[ScaredAboutTheFuture]

I am hoping for some advise.

DH is being made redundant shortly. He will get a package of £43,000.

Will he be able to claim JSA with that amount of payout.

Many thanks

You're not allowed to spend it above the limits for everyday necessities set by the DWP so for a couple - they'd expect you to live on £114.85 (excluding rent/council tax which is extra) per week.

Anything over that could be considered deprivation as it isn't necessary expenditure.

Yes, I know it's not easy to live on that amount, I'm not saying it is, but that's what they go by and they're the ones who decide. If it's spent they won't just give you benefits, you'll need to wait until a reasonable time by which you could have been expected to live on that money has lapsed.

Check the exact figures at your local CAB - I just know the person I referred to previously was told the weekly expenditure limit was whatever the government deemed they needed to live on.

6mths was probably an exaggeration

We have approx £3k go out each month in bills. Mortgage alone is 1k. We also have many insurance policies eg critical illness cover, income protection. We also have insurance policies for water and boiler. DH has car finance too. Council tax is £200/mth

You need to look at what you can cut and cancel now. And sell.

expat is right, you cannot keep spending that amount each month now.

If we stop all the polices I just worry what will happen if we became ill or if something breaks.

Ok can the car be returned?

Some of the insurance may need cancelled.

If you have a lot of insurance then do you have mortgage insurance by any chance? Or income protection?

Also - how realistic would it be to expect your dh to get another similar job within 6 months?

It's horrible - we have been there - but you get through it.

Am assuming the Income Protection doesn't cover redundancy? If it doesn't then it's pretty pointless isn't it?!

Dh will be saving about £200 /mth on petrol by not going to work

Oh you do have income protection does it cover redundancy? If not it can definitely go for a start as you have no income to protect iyswim.

You're going to have to make some quite major changes at least in the short term.

Income protection and critical illness is for illness/death

Income protection is useless at present then. Critical illness too. You can get reasonably cheap stand alone life insurance.

As soon as he was told he was applying for jobs that day. He has applied for about 15 in two weeks.

They just don't get back to him....although some are still open to applicants currently.

He is very motivated and will get a job anywhere. Of course he'd prefer his chosen profession but a job is a job.

Unfortunately we don't have family to help us with childcare so his previous job allowed him to leave slightly earlier twice a week to collect the boy's from After school club when I was working. That sort of perk doesn't come easily.

Not sure what we'll do with that aspect once he does get a job.

What the hell?! No!

Is there a reason why you think your DH won't get a job before the £47k is spent?

I don't know much about benefits but given your expenditure is high compared to potential benefits I'd imagine he'd be able to get a job that at least pays better than benefits within 6mths?

I'm assuming your DH had a reasonable job? Sending off 15 application seems like a poor use of time.

He needs to focus on tailored applications for jobs that are a good fit, contact recruiters and use his network.

If he's only applied in the last two weeks they've possibly not shortleeted yet.

It WILL be okay, it will, you need to plan how to cut expenditure though. Can his car go back?

You make £13K (take home?) and have £3k per month expenses, so £1k from your income and £2k per month from the £43k means 3.5 years and that's before you start cutting back! Am I missing something ??

sorry, correction, that's 1.75 yrs. Surely with cutting back you could extend that, plus he might get another job before then.

He will get the JSA for the first six months assuming the redundancy is compulsory and not voluntary. As for the £43K. The first £30K is tax free and then he will pay 20% tax on the remainder unless he is a higher rate tax payer and then it's 40%. AFAIK but do check this first.

There is also the option of paying all or part of it into his pension scheme as a lump sum which would not be liable for tax if his company will allow this but he should see a financial advisor first. Not sure how old he is but it is an option for some folk. I thought you could pay off your mortgage with a lump sum unless the rules have changed.

I don't think it is wise to spend all that money on living expenses after he has paid his tax and contributed and is now without a job.

Income protection is a bit pointless if he has no income! You will have to cut back at some point, once that £43k is gone and your living on your £13k pa + any benefits you're entitled to you wont be able to keep up the level of expenditure you have currently. Use this as an opportunity to have a family finances review - go through all your outgoings, cancel all you don't need, switch suppliers for utilities, tv, broadband, insurance etc. Cancel gym memberships etc. Look at what you spend on food & toiletries - can you ship cheaper elsewhere? There are loads of online resources for feeding a family on a budget. Can you do a household clear out and eBay/car boot a few things? Might not make much but if you can put away a few hundred for a rainy day you might be grateful for one day!

Sorry, didn't realise my post was so long or I'd have paragraphed!

Sorry didn't see your massive outgoings. People are right lump sum or savings won't last long with these outgoings. And benefits won't even begin to cover them. Hope things work out and he gets a job soon. Sorry.

We did consider paying a huge amount off the mortgage and then remortgaging the remainder for a longer length as this would reduce our outgoings, which would mean DH could look at jobs in a lower price bracket too.