Going through a divorce or separation can be an emotionally draining time. And while you’re dealing with the aftermath of the end of your relationship, your finances may not seem a priority. However, safeguarding your financial future is vital. If you’re worried about money during this time, then read on to find out what financial support is available following a separation.
What financial support is there?
Recent reports from the Office of National Statistics show that divorces between opposite-sex couples increased by 18.4% in 2019. Meanwhile, divorces among same-sex couples nearly doubled.
Separating from your spouse or partner can result in your income dropping. But as a newly single person, there are benefits that you are entitled to claim. This is particularly the case if you’re now a lone parent and your children live with you all or most of the time.
Let’s take a look at the financial support available following a separation:
Universal Credit is the large umbrella that covers a lot of legacy benefits, such as income support and housing benefit. For a full list of the legacy benefits covered, the money advice service has a guide.
You could be entitled to different parts of Universal Credit if you’ve separated and are now looking for work. You could also be entitled if you’re on a low income.
However, if you’re already receiving these legacy benefits and your partner leaves the family home, you’ll have to tell the Department for Work and Pensions (DWP) or HMRC about the change to your circumstances.
Universal Credit as a lone parent
One element of financial support following a separation is Universal Credit. If you’re eligible to claim and are a solo parent, then you’ll be put into one of four groups depending on the age of your children. Basically, the younger your children are, the less requirement there is to actively seek employment. This is due to childcare costs and restrictions.
Once your child turns three and the free childcare hours come into effect, the system expects you to look for work if you aren’t already working.
You’ll most likely have a work coach guiding you through what is expected of you. Once you’ve agreed what you’ll do to find or prepare for work, this will form part of your claimant commitment.
Jobseeker’s Allowance (JSA)
Depending on whether you’ve paid enough in National Insurance Contributions and worked for two full years before claiming, you could qualify for the new style JSA alongside Universal Credit.
Employment and Support Allowance (ESA)
If you’re unable to work because of illness or disability, then you may be entitled to claim ESA as well as Universal Credit.
Housing cost element of Universal Credit
If you’re renting and not already claiming Housing Benefit, then you can make a claim for the housing cost element of Universal Credit. This will just provide you with a little extra to help ensure you can make your rent payments.
However, if you’re already receiving Housing Benefit and your partner or spouse leaves the family home, then you’ll need to tell your local council. You’ll most likely then be transferred from Housing Benefit and encouraged to make a claim through Universal Credit instead.
Council Tax reduction
This is an area of financial support following a separation that you may not have thought of. But if your partner or spouse moves out and you’re the only adult living at the property, then you can claim a 25% discount on your council tax bill. You’ll need to apply for this through your local council.
It depends on your personal circumstances, but if you’re now a lone parent, you could consider claiming child benefit.
If your income has dropped below £50,000 and you were already claiming child benefit, contact the Child Benefit Office and tell them about your change in circumstances.
Alternatively, if you haven’t been claiming because your ex-spouse had been earning over the threshold, then you may want to speak to the Child Benefit Office to make a claim.
Just be aware that it can take up to 12 weeks to process a claim. So if you need the money urgently, action this as soon as possible.
Other financial considerations
Financial support following a separation doesn’t just need to come from the government. You could receive spousal maintenance as well as child maintenance.
Making these arrangements doesn’t need to happen in court. In fact, if you can agree on a voluntary agreement, you could save yourself costly solicitors’ fees. But if you do need some outside counsel, then mediation is an option.
You’ll also have joint finances to consider. Consider checking your credit score, as this will show you how you and your ex-spouse are financially connected.
If you have any joint loans or overdrafts, you will need to act quickly if you think your ex-partner could run up debts. This is because you are jointly responsible for the debt.
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