Benefits following redundancy and/or finishing work
You may need to claim one or a combination of the following benefits:
- Jobseekers Allowance - if you are looking for work
- Employment and Support Allowance - if you are not fit for work
- Income Support - if you do not have to sign on e.g. you are a carer.
- Housing Benefit - for help with rent
- Council Tax Benefit - for help with Council Tax
- Pension Credit - if you are aged 60 or over and do not wish to claim
- Jobseekers Allowance
- Other benefits such as Carers Allowance.
Jobseekers Allowance - Claim by telephoning 0800 055 6688
You must be available for and ‘actively seeking work.’
There are 2 types of Jobseeker’s Allowance.
- Contribution based/ JSA (c): Paid for up to 26 weeks if you have paid sufficient
National Insurance credits. Final payments from your employer will not affect this
type of benefit however only the first £50 per week of any personal or occupational
pension will be ignored.
- Income based/ JSA (IB): Means tested; claim includes an amount for your partner
and mortgage costs (if applicable)
You may be unable to claim Jobseeker’s Allowance for a fixed period of time if you
chose to give up your job or were dismissed due to poor conduct. The period disallowed
is called a 'sanction period.' N.B. Sanction periods do not apply to people leaving
employment because of voluntary redundancy or severance.
Income support- claim by telephoning 0800 055 6688
Income Support (IS) is a means tested benefit for people under pension age on low
or no income who do not have to be available for work. E.g. carers or lone parents
with children under aged 7yrs (5yrs from October 2011) As with Jobseeker’s Allowance
there is provision to claim an amount for your partner and mortgage interest if
Pension credit: claim by telephoning 0800 991 234; Textphone: 0800 169 0133
Means tested benefit for people that have reached the qualifying age. The qualifying
age will be between 60 to 66 years between 6/4/10 until 6/4/20 as it is increasing
alongside the women’s state pension age.
When your job ends you may be entitled to statutory redundancy pay or an agreed severance
package from your employer.
It is important to be aware that payments from your employer may affect benefit
Any lump sum payment received due to redundancy or voluntary severance is treated
as savings for benefit purposes.
Means tested benefits such as Income Support, Employment and Support Allowance (income
related), Jobseekers Allowance (income based), Pension Credit, Housing Benefit and
Council Tax Benefit are affected by savings or ‘capital’ in the following way:
- Up to Pension credit age; no benefit will be paid if you or your partner’s capital
is £16,000 or more and there is an assumed income of £1 for every £250 called ‘Tariff
income’ for any savings between £6,000 and £16,000.
- Over Pension credit age; Tariff income begins from £10,000. Pension service will
count you as having an income of £1 for every £500 worth of savings over £10,000.
N.B It is important to keep receipts for any items purchased from your lump sum
as the Department for Work and Pensions may wish to see them. DO NOT give money
to friends or family as a gift if you intend to claim a means tested benefit as
the DWP may decide that you still have the money and assume Tariff income from it.
Entitlement to Working Tax Credit may be affected - you should notify them as soon
as possible by telephoning them on 0345 300 3900 (textphone 0345 300 3909).
Entitlement will continue if your partner works full-time hours
Working Tax Credit can then continue to be paid for 4 weeks after stopping work.
It will count as income for any means tested benefits claimed. NB Working Tax Credit
is only payable to people in work. (Child Tax Credit may be payable if you have
Holiday pay or Pay in Lieu of Notice: may affect entitlement to benefit. The rules
vary depending on when paid and what period they cover. Check with DWP when making
your claim to benefit.
Any private pension or occupational (works) pension received after stopping work
will be taken as income when calculating all benefits except Carers Allowance or
State Retirement Pension.
- Employment Support Allowance based on contributions: The first £85 per week of any
work or private pension paid is ignored. Any income above £85 is reduced by 50 pence
for every pound. Eg If your works pension is £95 per week the first £85 will be
ignored leaving £10 in excess of £85. This amount is then halved giving an income
of £5. £5 per week will then be deducted from your weekly benefit.
- Jobseekers Allowance based on contributions: The first £50 per week of your occupational/
private pension will not affect benefit. Any monies over this will be wholly taken
- Means tested benefits will take your full pension as income.