In yesterday’s post I gave an example of how difficult it can be to claim Housing Benefit and how this can cause problems with managing one’s cash flow.
Today, let’s look at it from the other end.
Please note: this is not about me. It is an EXAMPLE.
I am a single mother. I have been out of work for a while. I’m on Jobseeker’s Allowance and I have 3 school-age children. My rent and council tax are completely covered by my benefit.
I have been looking for jobs, but I need to find something that fits in with school hours, and pays enough for us to live on. Eventually, I find a job temping in a factory.
The day I start my new job, my Jobseeker’s Allowance stops.
I am now entitled to claim Working Tax Credits; to get this, I have to tell them how much money I think I will earn for the remainder of this tax year. If I under-estimate how much I think I will earn, I will receive too much in Working Tax Credits, and will be asked to pay it back in April. Therefore it’s better to over-estimate how much I think I will earn. Ultimately though, I’m plucking a figure out of thin air. This is a temping job; I have no idea how long they will need me.
My Housing Benefit continues to cover my rent, until I submit my first payslip to the Council office. Then they take a couple of weeks to re-assess my claim, and I get one of their unintelligible letters. The letter says that since my first day back at work, I am only entitled to Housing Benefit to cover half of my weekly rent. But for the past 6 weeks they have been over-paying my benefit, so for the next few weeks I will receive only a quarter of my weekly rent in benefit, in order to claw back the overpayment.
Last week, I was up-to-date on my rent but now with this amendment in my benefit, I’m behind.
Now the factory have caught up on their backlog, and they don’t need me any more, so I am unemployed again. I go back to set up my Jobseeker’s Allowance again, but I know this can take up to 15 working days.
Once my Housing Benefit is re-assessed (which they can’t do until my Jobseeker’s Allowance claim is finalised), it will be backdated to the date I stopped work, and will once again cover my rent.
Now I am in a position where my rent and council tax are covered, but I’m living on Jobseeker’s Allowance, and I still owe rent from the brief period I was in work.