How does redundancy pay affect benefits




















Contact your local Jobcentre and ask for their Rapid Response Service - they specialise in helping people who have been made redundant. They will help you find a new job and may even pay for training. You should also ask your employer for a written reference, as you can send this with your job applications. You can take the time off at any time in normal working hours. For example you could be paid at your normal hourly rate for up to 2 days if you work 5 days a week. You can take 'reasonable' time off once your employer has given you a date for when your employment will end.

Ask your employer before you take any time off. Try to give them as much notice as possible and tell them what you need the time for - for example a job interview. Giving notice and a reason will make your employer more likely to agree. Start by talking to your employer if they refuse to pay you for time off to look for work. You could speak to your human resources HR department, if there is one. Not all employers know about this right - they might change their mind if you explain the law to them or show them online information on your rights for example, the Acas guide to redundancy.

After Acas early conciliation, your final option is to take your employer to an employment tribunal. If you pay a higher tax rate, you need to call HMRC to arrange to pay the extra tax. You might also be able to get a higher amount of benefits you already get, for example:. If you have a mortgage, check your mortgage protection policy to see what it says about redundancy. You might get some money towards your mortgage while you look for a new job. For more information about help with mortgage costs and mortgage arrears, see How to sort out your mortgage problems.

These can be set up more quickly than Universal Credit. Payments can start as soon as you are out of work. You may be eligible if you have paid the right NI for 2 out of the last 3 years. If you have been in work for the last 2 or 3 years, you have probably paid enough NI to qualify for JSA.

If you are not eligible, you may still be able to claim other benefits. There are 2 advantages:. Employment Support Allowance. You will be in the Support Group if you are assessed as having limited capability for work-related activity. People in this group:. You must tell the DWP immediately if you are made redundant. This is called a 'change of circumstances'. Your benefits will change and may increase.

Report a change to your circumstances DWP. Universal Credit is a benefit for people who are out of work or on a low income. There are some things to watch out for when you apply after you've been made redundant.

When you are made redundant, you may receive several payments from your employer in a short time. This can mean you have to wait longer to get Universal Credit. For Universal Credit, your income is assessed each calendar month. Any income you receive in that assessment period is taken into account. Check how much redundancy pay you can get Citizens Advice.

These payments are treated as 'capital' when you apply for Universal Credit. It's important that you wait until your last redundancy or salary payment has been paid into your account before you apply. If you are over the income limit on the day you apply, you will have to wait another month before you receive your first payment. This can be tricky to work out when you are made redundant. You may be worried about your income and want to apply straight away.

If you're not sure when to apply, call the Help to Claim line at Citizens Advice. Contact Help to Claim Citizens Advice. Your Working Tax Credit will continue for 4 weeks after you finish your job. This happens even if your application is not successful. Call the Help to Claim line to check if you will qualify before you apply.

You may be better off if you wait to claim Universal Credit. Universal Credit. Benefits and tax credits when you've lost your job Money Advice Service. When you are made redundant, your income is likely to change. If you are already receiving means-tested benefits, you may be eligible for more support while you have less income.

Other benefits may change or stop while you are out of work or if you receive a large redundancy payment. Budgeting tools. If you already get tax credits, you must tell the tax office HMRC that you are no longer in work.

Report a change to your circumstances for tax credits HMRC. Working Tax Credit will continue for 4 weeks after you finish work, unless you apply for Universal Credit. For most people, tax credits have been replaced by Universal Credit. This means that you may not be able to make a new claim for tax credits when you get a new job.

When people are made redundant their final pay may include pay in lieu of notice, holiday pay and other payments. Not everyone gets redundancy pay when they are made redundant.

If you received redundancy pay and think we haven't worked out your benefit start date correctly, you can complete our enquiry form. We'll contact you if we need more information, and check whether your redundancy payment was treated correctly.

Redundancy payments and benefits 03 June Information There are no stand-downs from 23 March to 23 November In November , the special redundancy stand-down was removed and a 10 week High Income stand down was introduced.



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