1. Future Benefits and Income Seeing the Whole Picture GARETH MORGAN FERRET INFORMATION SYSTEMS NAWRA SWANSEA MARCH 6 TH 2009 Ferret Information Systems 30/10/2015

2. Starting a New Job Unemployed for some time Couple, 2 kids, partner at home Starts work 27/11/2008 Salary £27,000 gross Mortgage £150,000 Council Tax £1,400 pa 30/10/2015 Ferret 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 CTB£0.00 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87 Other Income£0.00 Total Net Income£667.64£2,893.11

3. Starting a New Job – 3 Year View 30/10/2015 Ferret Information Systems This year Next year 2011 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 Benefits & Credits Income WTC£82.79£358.75£60.84£263.65£0.00 CTC£90.72£393.13£90.72£393.13£19.16£83.02 HB£0.00 CTB£0.00 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£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

4. 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 30/10/2015 Ferret Information Systems This year Monthly Gross Weekly Earnings£173.08£750.00 Net Earnings£154.18£668.13 Benefits & Credits Income WTC£0.00 CTC£21.76£94.28 HB£0.00 CTB£28.77£124.66 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87 Other Income£0.00 Total Net Income£237.91£1,030.93

5. Couple – 1 Loses Job – 3 Year View 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly 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 Benefits & Credits Income WTC£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 CTB£28.77£124.66£9.41£40.80£9.41£40.80 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£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

6. Unemployed Approaching Pension Age 30/10/2015 Ferret Information Systems Unemployed for just over a year Couple, 0 kids, partner at home Mortgage £150,000 Council Tax £1,400 pa 59 years old This year Monthly Gross Weekly Earnings£0.00 Net Earnings£0.00 Benefits & Credits Income WTC£0.00 CTC£0.00 HB£0.00 CTB£28.85£125.00 JSA-IB£200.18£867.45 Pension Credit£0.00 CB£0.00 Other Income£0.00 Total Net Income£229.03£992.45

7. Approaching Pension Age – 3 Year View 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly Gross Weekly Earnings£0.00 Net Earnings£0.00 Benefits & Credits Income WTC£0.00 CTC£0.00 HB£0.00 CTB£28.85£125.00£28.85£125.00£28.85£125.00 JSA-IB£200.18£867.45£0.00 Pension Credit£0.00 £294.58£1,276.52£294.58£1,276.52 CB£0.00 Other Income£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

8. Loses Only Job 30/10/2015 Ferret Information Systems Unemployed for 3 months Single, 0 kids Mortgage £150,000 Council Tax £1,400 pa This year Monthly Gross Weekly Earnings£0.00 Net Earnings£0.00 Benefits & Credits Income WTC£0.00 CTC£0.00 HB£0.00 CTB£28.85£125.00 JSA-IB£165.73£718.17 Pension Credit£0.00 CB£0.00 Other Income£0.00 Total Net Income£194.58£843.17

9. Loses Only Job – 3 Year View 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly Gross Weekly Earnings£0.00 Net Earnings£0.00 Benefits & Credits Income WTC£0.00 CTC£0.00 HB£0.00 CTB£28.85£125.00£28.85£125.00£28.85£125.00 JSA-IB£165.73£718.17£60,50£262.17£60,50£262.17 Pension Credit£0.00 CB£0.00 Other Income£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

10. 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 month A net ‘profit’ of £60 a week 30/10/2015 Ferret Information Systems

11. Homeowners Mortgage Support Scheme 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly 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 Benefits & Credits Income WTC£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 CTB£28.77£124.66£9.41£40.80£9.41£40.80 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£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.

12. Homeowners Mortgage Support Scheme –with housing costs This year Next year 2011 Monthly 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 Benefits & Credits Income WTC£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 CTB£28.77£124.66£9.41£40.80£9.41£40.80 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£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£670.91 Council 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 30/10/2015 Ferret Information Systems The HMSS scheme requirements include “testing the long-term sustainability of their financial position”

13. Sale and Rent Back 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly 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 Benefits & Credits Income WTC£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 CTB£28.77£124.66£9.41£40.80£9.41£40.80 JSA-IB£0.00 Pension Credit£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£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£625.00 Council 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.

14. Sale and Rent Back - Rental 30/10/2015 Ferret Information Systems This year Next year 2011 Monthly 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 Benefits & Credits Income WTC£0.00 £63.44£274.90£63.44£274.90 CTC£21.76£94.28£90.72£393.13£90.72£393.13 HB£75.00£325.00£12.10£52.45£12.10£52.45 CTB£28.77£124.66£9.41£40.80£9.41£40.80 Pension Credit£0.00 JSA-IB£0.00 CB£33.20£143.87£33.20£143.87£33.20£143.87 Other Income£0.00 Total Net Income£312.91£1,355.93£363.06£1,573.27£363.06£1,573.27 Mortgage Interest£0.00 New Rent£100.00£433.33£100.00£433.33£100.00£433.33 Council 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.

15. 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 30/10/2015 Ferret Information Systems

16. 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. 30/10/2015 Ferret Information Systems

17. 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. 30/10/2015 Ferret Information Systems

18. 30/10/2015 Ferret Information Systems Variability of Benefit Income

19. Common Financial Statement 30/10/2015 Ferret Information Systems

20. Sustainability Affordability over a period of time Informed choices for customer Informed choices for provider An early picture of reality Showing predictable changes over time 30/10/2015 Ferret Information Systems

21. Ferret YOU’LL QUICKLY SEE THE BENEFIT Ferret Information Systems 30/10/2015