What benefits could a homeowner claim if job lost

[Catcream]

Hi

Just wanted to check if you suddenly could not work due to illness/ signed off sick from agency work and had no source of income but had a mortgaged property

Have tried benefits advice calculator which mentions universal credit of £300 is this per week/ month?

Asking as current mortgage is around £700 so if payment is £300 a month obviously this will not cover the cost

Would you get separate benefits for council tax, housing benefits?

I am just looking into this as my worst case scenario while I try to also build up my own savings though I am told that you should also not have more than 3k else you would not be entitled to any support

Try the entitled too benefits calculator
www.entitledto.co.uk/

There isn’t any benefits for mortgages, although there is a mortgage grant - but has to be paid back and you may better off asking your mortgage provider for a payment holiday (again would have to be paid back) or restructure your mortgage.

UC includes everything. If long term sick you might be eligible for contributions ESA.

Thanks and the figure of around £300 is this per week or month?

As a single person or with children?
I believe universal credit has a mortgage allowance part but only for the interest on the mortgage and not the principal and you can't claim it straight away, I think.
If too unwell to work, you can claim ESA which is £75 a week during the assessment phase (DH claimed in August and has just had his assessment last week).
Usually you apply directly to the council for council tax reduction.

That looks like monthly or 4 weekly

I have 2 children and get CB for them

www.understandinguniversalcredit.gov.uk/new-to-universal-credit/housing/www.understandinguniversalcredit.gov.uk/new-to-universal-credit/housing/

Looks like you have to have been out of work for a very long time before they will help with mortgage costs.

If you're not currently in this position and are simply trying to look at what ifs, you really need to consider an income protection policy. LV have a good, simple IP policy that is based on the value of your mortgage repayment and can be paid directly to the lender, meaning it won't be considered as income for universal credit purposes should you find yourself in such circumstances.
For full disclosure, I am a mortgage broker and look at the 'what ifs' on a daily basis.

Basically, you'll be totally screwed. It's a 5 week wait for any money at all through universal credit and you'd have to take a payment holiday from the mortgage as you'd get no help with that for over 6 months.

Although it's £16k of savings before you don't qualify for anything and I think it's £6k before they start reducing your entitlements.

Excellent advice. Is there a minimum term you have to have held the policy before you can use it?

Also interested in this

Are you trying to understand what your fall back position would be in case something happened, rather than trying to understand what you can claim right now?

if this is a “just in case” scenario then you might want to look at income protection insurance. I pay about £100 per month which covers me for £2k per month in case of loss of income.

I was in that situation... Partner on a salary of around £25k, two children and home owners. We got around £500 (but that's only because they helped with nursery costs).

@rachelb76 cross-posted with you, but what you have suggested sounds much more sensible! I might look into it.

Thanks Rachel

I have life insurance with some illness protection from Aviva but want something with immediate cover and where illness doesn't have to be as severe eg the big C, heart attack etc, more like as a contractor I don't get sick leave in case I am ill for a week or so and can't work, I am paid weekly for hours worked

You'd get money for the dc, circa £500 for 2 I think. You might get council tax relief, depends on income. The personal allowance is approx £300 per month. Plus your £140 a month CB. So almost £1k per month, which obviously isn't much if your mortgage is £800.

Above is assuming you are single

Yes, don't want to be in this position without a clue of how to proceed as I have children I am responsible for

4 weeks is the minimum deferred period so it would start paying out if you were unable to work due to illness or injury (not unemployment or redundancy) for longer than that. You don't have to have held the policy for any minimum length of time but it won't cover any pre-existing conditions.

Actually, some providers will allow a 1 week deferred period but it depends on your occupation. The 4 week deferred applies to the LV cover I mentioned as it's 'simplified' cover.
Essentially, income protection can replace up to 60% of your usual earnings. It doesn't have to be a major illness, if it's something that stops you being able to do your usual job for a stretch then that's what it's for. There's a million and one different ways of setting these policies up so that they work for you, I'd advise speaking to an adviser who will help set up something suitable for your circumstances.

I can't see it being worth claiming benefits for a few weeks, as they don't pay anything until about 5 weeks in and it is a LOT of stress and hassle. An emergency savings fund that would cover a few months outgoings would be better.
Would you get statutory sick pay?

And this is what people forget when they say "I've been paying £1100 in rent for 2 years but the bank will only give me £750 a month mortgage". Renters have the option of housing benefit and don't have to pay for upkeep/ maintenance where as those with mortgages don't get financial support for housing.

There's obviously benefits to home ownership, but being aware that there's no benefit help is important.

No mortgage interest help for 9 months.

If self employed and more than 12 months trading they will apply minimum income floor. ( Google it)

If you get an income protection policy and its paid to you it will be considered for UC as income so make sure you get one that is for the mortgage and paid direct to lender.

My brother had income protection insurance. He was paid a monthly income and had his mortgage paid. Not only did it remove the immediate worry of bills, but it gave him time to look for a job he wanted rather than having to take the first thing that came along. However, I doubt he could have got the same deal from doing agency work which I don't think rates as a permanent job. It's definitely worth speaking with a broker to see what is available for your personal circumstances.

I don’t mean to hijack the thread, but is it possible to take out both mortgage protection and income protection insurance? I was told there was a cap of £2k on income protection so am just wondering if taking additional protection for the mortgage is a way around it.

Hmmm, I don't think you could. Income protection factors in any income you continue to receive (excluding SSP), for example if you had sick pay of half your normal salary the IP payment would top it up to 60%, then once on SSP would cover the full 60%, so if you had a separate policy to cover the mortgage I think it would be factored in as income (although this is different for UC if it's paid directly to the lender).
When you are in receipt of a pay out from an income protection policy you shouldn't be in a better position than if you were working, which is why it is capped at 60% of usual earnings, otherwise there's no incentive to return to work!
The £2k cap you've been told might be a cap based on your income or might be a provider cap - I have to say I've never had to consider a provider cap before as I'm generally dealing with incomes on the lower side of things.