future benefits and income seeing the whole picture gareth morgan ferret information systems nawra...

Future Benefits and IncomeSeeing the Whole Picture

GARETH MORGANFERRET INFORMATION SYSTEMS

NAWRA SWANSEA MARCH 6TH 2009

Ferret Information Systems 20/04/23

Starting a New Job

Unemployed for some time

Couple, 2 kids, partner at home

Starts work 27/11/2008

Salary £27,000 grossMortgage £150,000 Council Tax £1,400

pa

20/04/23Ferret Information Systems

This year

Monthly

Gross Weekly Earnings £519.23£2,250.00

Net Earnings £460.93£1,997.36

Benefits & Credits Income

WTC £82.79 £358.75

CTC £90.72 £393.13

HB £0.00 £0.00

CTB £0.00 £0.00

JSA-IB £0.00 £0.00

Pension Credit £0.00 £0.00

CB £33.20 £143.87

Other Income £0.00 £0.00

Total Net Income £667.64£2,893.11

Starting a New Job – 3 Year View


This year Next year 2011

Monthly Monthly Monthly

Gross Weekly Earnings £519.23 £2,250.00 £519.23 £2,250.00 £519.23 £2,250.00

Net Earnings £460.93 £1,997.36 £393.03 £1,703.13 £393.03 £1,703.13


WTC £82.79 £358.75 £60.84 £263.65 £0.00 £0.00

CTC £90.72 £393.13 £90.72 £393.13 £19.16 £83.02

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CTB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87

Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Total Net Income £667.64 £2,893.11 £577.79 £2,503.78 £445.39 £1,930.03

Monthly drop in net income of £963,08. Starting net is 50% higher than steady-state

Couple – 1 Loses Job

Just lost job at £27,000

Couple, 2 kids, partner earns £9,000 full time

Stops work 27/11/2008

Mortgage £150,000 Council Tax £1,400

pa


This year

Monthly

Gross Weekly Earnings £173.08 £750.00

Net Earnings £154.18 £668.13


WTC £0.00 £0.00

CTC £21.76 £94.28

HB £0.00 £0.00

CTB £28.77 £124.66

JSA-IB £0.00 £0.00


CB £33.20 £143.87


Total Net Income £237.91 £1,030.93

Couple – 1 Loses Job – 3 Year View




Gross Weekly Earnings £173.08 £750.00 £173.08 £750.00 £173.08 £750.00

Net Earnings £154.18 £668.13 £154.18 £668.13 £154.18 £668.13


WTC £0.00 £0.00 £63.44 £274.90 £63.44 £274.90

CTC £21.76 £94.28 £90.72 £393.13 £90.72 £393.13

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CTB £28.77 £124.66 £9.41 £40.80 £9.41 £40.80

JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87

Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Total Net Income £237.91 £1,030.93 £350.96 £1,520.82 £350.96 £1,520.82

Monthly increase in net income of £489.89. Steady-state is 47% higher than starting rate

Unemployed Approaching Pension Age


Unemployed for just over a year

Couple, 0 kids, partner at home

Mortgage £150,000 Council Tax £1,400

pa59 years old

This year

Monthly


Net Earnings £0.00 £0.00Benefits & Credits Income

WTC £0.00 £0.00

CTC £0.00 £0.00

HB £0.00 £0.00

CTB £28.85 £125.00

JSA-IB £200.18 £867.45


CB £0.00 £0.00


Total Net Income £229.03 £992.45

Approaching Pension Age – 3 Year View





Net Earnings £0.00 £0.00 £0.00 £0.00 £0.00 £0.00


WTC £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CTC £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CTB £28.85 £125.00 £28.85 £125.00 £28.85 £125.00

JSA-IB £200.18 £867.45 £0.00 £0.00 £0.00 £0.00

Pension Credit £0.00 £0.00 £294.58£1,276.52 £294.58£1,276.52

CB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Total Net Income £229.03 £992.45 £323.43£1,401.52 £323.43£1,401.52

Monthly increase in net income of £409.07. Steady-state is 41% higher than starting rate

Loses Only Job


Unemployed for 3 months

Single, 0 kidsMortgage £150,000 Council Tax £1,400

pa

This year

Monthly


Net Earnings £0.00 £0.00Benefits & Credits Income

WTC £0.00 £0.00

CTC £0.00 £0.00

HB £0.00 £0.00

CTB £28.85 £125.00

JSA-IB £165.73 £718.17


CB £0.00 £0.00


Total Net Income £194.58 £843.17

Loses Only Job – 3 Year View



Monthly Monthly MonthlyGross Weekly Earnings £0.00 £0.00 £0.00 £0.00 £0.00 £0.00Net Earnings £0.00 £0.00 £0.00 £0.00 £0.00 £0.00Benefits & Credits Income

WTC £0.00 £0.00 £0.00 £0.00 £0.00 £0.00CTC £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00CTB £28.85 £125.00 £28.85 £125.00 £28.85 £125.00

JSA-IB £165.73 £718.17 £60,50 £262.17 £60,50 £262.17Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 Total Net Income £194.58 £843.17 £89.35 £387.18 £89.35 £387.18

Monthly drop in net income of £455.99. Starting net is 117% higher than normal

New SMI Rules

Mortgage Interest, a long time ago, was linked to the amount paid.

Then it became linked to base rate, 1.58% above.

Now, for an indefinite period it is set to a notional rate of 6.08%

A mortgage of £150,000 at 4% will cost £500 a month

The SMI figure in benefits will be £760 a monthA net ‘profit’ of £60 a week


Homeowners Mortgage Support Scheme





Net Earnings £154.18 £668.13 £154.18 £668.13 £154.18 £668.13


WTC £0.00 £0.00 £63.44 £274.90 £63.44 £274.90

CTC £21.76 £94.28 £90.72 £393.13 £90.72 £393.13

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CTB £28.77 £124.66 £9.41 £40.80 £9.41 £40.80

JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87

Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

Total Net Income £237.91 £1,030.93 £350.96 £1,520.82 £350.96 £1,520.82

Back to the 1 of a couple loses a job example, with a 5% interest rate.

Homeowners Mortgage Support Scheme –with housing costs

This year Next year 2011 Monthly Monthly MonthlyGross Weekly Earnings £173.08 £750.00 £173.08 £750.00 £173.08 £750.00Net Earnings £154.18 £668.13 £154.18 £668.13 £154.18 £668.13Benefits & Credits Income

WTC £0.00 £0.00 £63.44 £274.90 £63.44 £274.90CTC £21.76 £94.28 £90.72 £393.13 £90.72 £393.13

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00CTB £28.77 £124.66 £9.41 £40.80 £9.41 £40.80

JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 Total Net Income £237.91 £1,030.93 £350.96 £1,520.82 £350.96 £1,520.82 Relevant Mortgage Capital £150,000.00 £45,000.00 £161,018.84 Mortgage Interest £144.23 £625.00 £43.27 £187.50 £154.83 £670.91Council Tax £28.85 £125.00 £28.85 £125.00 £28.85 £125.00

Disposable Income £64.83 £280.93 £278.84 £1,208.32 £167.28 £724.91


The HMSS scheme requirements include “testing the long-term sustainability of their financial position”

Sale and Rent Back



WTC £0.00 £0.00 £63.44 £274.90 £63.44 £274.90CTC £21.76 £94.28 £90.72 £393.13 £90.72 £393.13

HB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00CTB £28.77 £124.66 £9.41 £40.80 £9.41 £40.80

JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 Total Net Income £237.91 £1,030.93 £350.96 £1,520.82 £350.96 £1,520.82

Existing Housing Costs £144.23 £625.00 £144.23 £625.00 £144.23 £625.00Council Tax £28.85 £125.00 £28.85 £125.00 £28.85 £125.00 Disposable Income £64.83 £280.93 £177.88 £770.82 £177.88 £770.82

As in the HMSS example but with constant interest payment.

Sale and Rent Back - Rental



WTC £0.00 £0.00 £63.44 £274.90 £63.44 £274.90CTC £21.76 £94.28 £90.72 £393.13 £90.72 £393.13

HB £75.00 £325.00 £12.10 £52.45 £12.10 £52.45CTB £28.77 £124.66 £9.41 £40.80 £9.41 £40.80

Pension Credit £0.00 £0.00 £0.00 £0.00 £0.00 £0.00JSA-IB £0.00 £0.00 £0.00 £0.00 £0.00 £0.00

CB £33.20 £143.87 £33.20 £143.87 £33.20 £143.87Other Income £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 Total Net Income £312.91 £1,355.93 £363.06 £1,573.27 £363.06 £1,573.27

Mortgage Interest £0.00 £0.00 £0.00 £0.00 £0.00 £0.00New Rent £100.00 £433.33 £100.00 £433.33 £100.00 £433.33Council Tax £28.85 £125.00 £28.85 £125.00 £28.85 £125.00 Disposable Income £184.06 £797.60 £234.22 £1,014.93 £234.22 £1,014.93

Based on a rent of £100 per week and a LHA limit of £75 per week.

Past Performance is no Guarantee

Assessments are still being made on the basis of past performance and status

does not consider changing circumstances or the future situation


Understanding Sustainability

Not enough to consider the different types of income: earnings, benefits, tax credits, pensions, interest, dividends etc. We also need to understand which of them are long term, which short term and which of them will change, predictably, in the future.

The same is true for outgoings. We should recognise the impact of taxes and national insurance, of contributions to savings and pensions, of housing costs, household expenditure, repayments and whether they will vary in the future in ways that can be foreseen.


The Snapshot Advice Session

The figures were going to be the same until something happened to the client and then they could come back for another session.

Now much more interaction between the tax, benefits, credit and other systems with increasingly complex rules determining how incomes and expenses in one area are treated in another.

The client needs a holistic view which takes account of their overall circumstances and, ideally, gives them a bottom line picture of their entitlements, rights and responsibilities.



Variability of Benefit Income

Common Financial Statement


Sustainability

Affordability over a period of timeInformed choices for customerInformed choices for providerAn early picture of realityShowing predictable changes over time


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Ferret Information Systems 20/04/23

future benefits and income seeing the whole picture gareth morgan ferret information systems nawra...

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net earnings0

net earnings460

net earnings154

total net income237

total net income667

total net income229

benefits credits incomewtc0

benefits credits incomewtc82