Reader Question: Are my debts taken into account when I apply for Jobseeker’s Allowance?

1 min Read Published: 28 Jun 2012

Get an answer to your financial question online

Reader Question:

Can you offset debts (eg student loan) against savings for purpose of entitlement to income job seekers allowance?

My response:

Eligibility for you apply for Income-Based Jobseekers Allowance depends on your personal circumstances. In particular if you have savings over £16,000, you can’t usually get incomebased Jobseeker’s Allowance. Below this limit, for each £250 of your savings over £6,000, your benefit is reduced by £1 a week.

However, there is no explicit offset made for debts as part of the means test. In theory you could use savings to clear your debts but you could fall foul of the deprivation of assets rules.

As an aside most full-time students at college or university aren't eligible for get Jobseeker’s Allowance.

However, you can use the official online Benefits Adviser tool to determine what/if you are entitled to any benefits.

I hope that helps

Damien

The material in any email, the Money to the Masses website, associated pages / channels / accounts and any other correspondence are for general information only and do not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation. See full Terms & Conditions and Privacy Policy.

Looking for a financial adviser near you?

Do you need financial advice? An independent financial adviser can show you how to make the most
of your money. Find your nearest qualified and regulated adviser using this VouchedFor search tool.

Alternatively, Hargreaves Lansdown, one of the UK’s largest firms providing restricted financial advice, is offering a £200 John Lewis voucher* to new clients.

  1. Post graduation, with no job, all the advice is NOT to pay off student loans. But if you can’t get income based JSA with savings over 16k, might be wise to use all but 6k to reduce student loans? Surely debts should always be part of means testing?

Comments are closed.