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Redundancy payments and benefits

(13 Posts)
Snorbs Thu 13-Aug-09 10:24:07

I've just found out that I'm being made redundant in a month and with the market being as it is, it could be a while before I find another job that will fit with childcare requirements.

It looks like I'll be getting around £10K net in redundancy payments. My question is, what effect will that have on me claiming benefits? Am I expected to live off that until it's all gone and then claim, or can I make a claim before it's all gone and keep some as savings in case of emergencies?

expatinscotland Thu 13-Aug-09 10:36:28

It depends, but in general, a sum like that can indeed impact any means-tested/income-based benefits you claim.

Snorbs Thu 13-Aug-09 11:49:33

Thanks expat. I'm going to the Job Centre next week to find out what I need to do and when (I've got a month left in work) so I'll raise the question there as well.

I've had a quick look at entitled.to and the CAB website but all the different benefits are confusing the hell out of me. It looks like I could get either JSA (if I'm looking for work) or Income Support (as a lone parent for young DCs) but entitled.to says nothing about Income Support. Gah! I'm sure they make these things so complicated just to put people off...

expatinscotland Thu 13-Aug-09 11:52:03

Problem with IS is that it is affected by capital/savings or what have you above a certain amount. Housing/council tax benefit is as well, but that can vary by council as to how much.

Going on IS is not always an option if your child is over a certain age.

expatinscotland Thu 13-Aug-09 11:52:40

Good call to see the JobCentre and, in particular, a lone parent advisor.

LadyMuck Thu 13-Aug-09 11:56:22

If you've paid enough NI then you'll be entitled to contributory JSA for 6 months - after that you would go onto means tested benefits.

Do talk to the tax credits people once you are redundant though as you will need to ensure that they calculate these correctly asap. This is in addition to going to the JobCentre.

Snorbs Thu 13-Aug-09 19:31:50

expat, I think my youngest is young enough for me to claim IS. If the redundancy cash is too much for IS then I'll just live off the cash until I've burnt through it enough to fall below the threshold.

LadyMuck, thanks for that. I should be ok for NI as I've been PAYE for ages. I didn't realise JSA had a six month limit though. Does that mean that JSA is worth more?

crawk Thu 13-Aug-09 19:57:33

Second what Lady Muck said about contributions based JSA and getting onto the Tax Credits people quick pronto. Good idea to see Jobs Centre now as they can process you and line you up for your JSA (contribution based) to start paying.

Here's info on JSA:
www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Employedorlookingforwork/ DG_10018757

Also definitely talk to CAB. And here are a couple of articles worth looking at:

www.guardian.co.uk/money/2009/jan/20/how-to-cope-with-redundancy

www.moneysavingexpert.com/protect/redundancy-help
you need to scroll down the article to the bit relevant to you.

Good luck!

crawk Thu 13-Aug-09 20:00:26

hmmmm my computer is showing weird space in midst of posting -- apologies for that, don't know what I've done.

jenwyn Thu 13-Aug-09 20:05:34

You can do a claim online here
rather than trek down to the jobcentre. Its unlikely that you will get any information actually at the office beyond the web address and phone number to call if you prefer speaking to someone as you make a claim.

benefits-adviser.direct.gov.uk/index.html

LadyMuck Thu 13-Aug-09 20:07:40

No, JSA is £64.30 if you are over 25, and you have to be available to work (at a week's notice if you have caring responsibilities). You are entitled to 6 months of JSA at the end of which, if you had not found a job, you would be on income based JSA or income support.

There are rules about signing on for JSA and you will have a Jobseekers agreement stating how often you have to sign on and what proof of job seeking you need to supply. It is this level of redtape that puts some people off applying.

If you have capital of less than £16k, and are a lone parent with a child under 10 then you would be immediately entitled to income support, which is means tested. For each £250 of savings which you have over £6,000 you are "deemed" to receive £1 per week in interest.

There are pros and cons to each route that you go down. It is easier, or at least quicker, to claim HB and CTB if you are on IS ime. If you have a mortgage then I would look at transferring to IS as soon as possible in order to get your mortgage payments covered.

But talk to Jobcentre when it all happens.

jenwyn Thu 13-Aug-09 20:13:30

Sorry -pressed the wrong button.
I would advise you to opt for the telephone method if you've never made a claim before as the agent taking your claim can (usually) answer questions as they come up during the call.

Always make a claim even if you think you might not qualify as your claim may still go through .If it doesnt go through then at least you know for sure and have information necessary for another time.

If you are a lone parent then income support may be payable but;(taken from direct.gov.uk)
from 24 November 2008, if your youngest child is aged 12 or over, or will be 12 in the next year, your Income Support may stop during that year if you are only claiming it because you are a lone parent.
from 26 October 2009, if your youngest child is aged ten or over, or will be ten in the next year, your Income Support may stop during that year if you are only claiming it because you are a lone parent.
from 25 October 2010, if your youngest child is aged seven or over, or will be seven in the next year, your Income Support may stop during that year if you are only claiming it because you are a lone parent.

Snorbs Thu 13-Aug-09 22:37:55

Thanks everyone. My head's still reeling a bit and I'm still not sure if I should go for JSA or IS. My youngest is only just 8 so I'm eligible for IS as a lone parent (at least until 2010). I will be looking for work though, so maybe JSA will be more appropriate. I'm renting privately and my rent is only about a fiver a month over the limit so if/when my funds get depleted HB will hopefully be able to keep a roof over our heads.

I'm going to give Gingerbread (the single parent's association) a call as they may have some clues as to the best way forward for me. And I'll make an appointment with the CAB, too.

I'll also chase up CTC - I stopped claiming it a couple of years back as it was a huge hassle for very little benefit. The amount I was receiving was tiny and dwarfed by the amount of time and energy I had to put in to correct their mistakes. As CTC seems to be calculated on prior year's earnings then I doubt I'll get much but at least I'll now have the time to phone them every day...

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