Will a loan affect my income based employment Support allowance?

RSISolutions

I am in receipt of income based employment Support allowance and I don't have to pay council tax because of my low income and lack of savings. My savings are less than £6000. If I receive a loan secured on the equity in my house will this affect my benefits?

1. If it takes me over the £6000 limit
2. If I'm still under the £6000 limit

mikehughescq

You get CTR because you get means-tested ESA. You get the latter because if your income and capital. 2 answers to your question. You won’t like either.

1 - equity release is effectively taking out a loan you have no means to repay, Before you do so you need independent financial advice. 

2 - if capital remains below £6k then there’s no issue. After that depends on how much we’re talking and what the purpose is.

BenefitsTrainingCo

Hi RSISolutions

The principle is that savings above £6000 affect means tested benefits like income related ESA. But the rules can be complicated and it may be that there are other issues to consider here. How much do you expect to receive and what will you do with the money?

David

RSISolutions

Hi David. Loan will be paid in monthly Installments to the same value as my monthly mortgage payments and will be used to pay my mortgage. The total value of the loan is below £6000. No need to pay the loan back until I sell the house and the equity is released. My capital will remain under 6k during the period. 

poppy123456

Under £6,000 doesn't affect means tested benefits providing the loan doesn't take your savings over £6,000.