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Voluntary Redundancy: How Long Before Benefits Claim?

By: Maggie Lonsdale BA (hons) - Updated: 8 Aug 2017 | comments*Discuss
 
Voluntary Redundancy Work Job Seekers

Q.

If I take voluntary redundancy, how long is it before I can sign on and receive any benefits?

(S.H, 21 February 2009)

A.

Unfortunately, the issue of redundancy and claiming benefits is gaining speed with the current global economic crisis, so you are right to look into the facts before you commit.

It is worth taking stock of your overall situation before you take voluntary redundancy – both financial and emotional – as there are a number of issues than run parallel with your ability to claim benefits.

A New Opportunity?

It is a good idea to think about how happy you are in your job, the long-term stability of the company you work for, your total household income, and the security of your partner’s job.

If, say, you don’t really love your job and were thinking about leaving anyway, especially if you were planning to go freelance or self employed or start your own business, taking voluntary redundancy can actually be a really positive step. You get a lump sum and some paid time off, essentially, and often access to training courses, careers advice and all sorts of other ‘perks’.

With regards to Claiming Jobseeker's Allowance (JSA) and other benefits after taking voluntary redundancy, the situation is pretty complex. Without knowing the exact details of your financial situation, including that of your total household, it is hard to be able to say what you would or wouldn’t get, but we can certainly take an overview.

For detailed advice for your personal situation, you can ask to speak to an advisor at your local Job Centre before you decide to take voluntary redundancy. You can also go onto the website for the Government’s Department of Work and Pensions to get advice and see what you may be entitled to in terms of benefits.

Facts and Figures

It is worth remembering that JSA and many other benefits are means tested, so if you have a great stash of savings (currently the threshold is over £16,000), you are unlikely to be able to claim anything other than benefits such as child tax credits.

It is common for voluntary redundancy to include a lump sum payment and then a number of months fully paid. While you can sign on as unemployed straight away, if you wish, you are unlikely to be able to claim JSA or other benefits, such as housing allowance, until the period of time that you have effectively been paid for is over (e.g. 2 months) regardless of how much of the money you actually spent, or what your salary was.

Think about what your long-term future is with the company and what you could do instead, rather than simply focus on claiming benefits, and you may find that taking voluntary redundancy is an interesting prospect.

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After nearly 2 decades of service, a friend of mine has asked me to accompany him to a redundancy meeting, which is being refused by employer (I'm not a colleague or a TU rep). Can this be refused? Can this accompaniment be refused if a grievance is brought against the employer on grounds of unfairness (meaning if a redundancy meeting cannot be accompanied, can a grievance meeting accept a 3rd party joining the meeting?) The process thus far has been shoddy, unclear and not taken into account some of the basics, and is not transparent. Worst of all the employer has had disregard for any history and arrangements in place for my friend whose working life is bound by a compromise agreement arranged some years ago, which put aside a multiple discrimination case. The fear here is that my friend has been singled out, and a lack of trust exists due to the original discriminations and way of being treated at that time. The company could have asked for voluntary - they have not. They could consider early retirement as part of a redundancy package, knowing my friend has little chance of fresh work due to age, health, very specialist industry knowledge, location, mobility etc. Any pointers welcome on rules around accompanying my friend whose wellbeing is shattered by this situation. Also - as process thus far is unclear and not transparent enough and not within normal guidelines, can a grievance be brought in order to influence a better outcome than looks likely? Thank you all very much .
Backstreet - 8-Aug-17 @ 10:04 AM
trev. - Your Question:
I am being made redundant at 58 years old and working for the company for ten years. I will receive statutory redundancy payment set out by government guidelines. They have also offered me an extra thousand pound if I take voluntary redundancy but my question is how will this affect claiming of any benefits that I may be entitled to and would it also look bad for prospective employers?

Our Response:
The article: Can I Claim Benefits If I Have Volunteered for Redundancy? here. I hope this helps.
WorkingRights - 15-Sep-16 @ 11:24 AM
I am being made redundant at 58 years old and working for the company for ten years. I will receive statutory redundancy payment set out by government guidelines. They have also offered me an extra thousand pound if I take voluntary redundancy but my question is how will this affect claiming of any benefits that I may be entitled to and would it also look bad for prospective employers?
trev. - 14-Sep-16 @ 3:01 PM
Annie - Your Question:
Hi. I work for a company with a 20hr flexi contract although I do the same hours and days, have been for years. Now I am being asked to change my hours or they will cut my contract. Can they do this? And how long grace do I have to decide?

Our Response:
Please see link: Can My Employer Reduce My Working Hours, here which should answer your questions. I hope this helps.
WorkingRights - 11-Jan-16 @ 2:32 PM
Hi. I work for a company with a 20hr flexi contract although I do the same hours and days, have been for years. Now I am being asked to change my hours or they will cut my contract. Can they do this? And how long grace do I have to decide?
Annie - 10-Jan-16 @ 7:25 PM
@Ricky - I don't see why not. Paying your mortgage off can impact on some benefits as it could be classed as 'notational capital' which means you have deliberately deprived yourself of the money in order to claim benefits. But I think if there is a gap between you paying your mortgage off and applying for tax credits then you should theoretically be ok. You might want to make doubly sure though by giving them a call.
Nina - 18-Feb-15 @ 12:22 PM
I'm taking voluntary redundancy soon and will be receiving 30k, I have a partner and two hound children! My plan is to use the 30k to put on my mortgage and get another job asap, when I get my new job will I be entitled to child and working tax credits? Thank you Ricky
Rickygee - 16-Feb-15 @ 4:37 PM
I have divorced 2012 finally me and my ex wife have 3 children and I started paying 2010 and still paying .. now my employers condiniton not well and cutting down job and privitation as well. They offered me voluntary redundancy payment and I accepted figure quite nice money till to get another job. my question is....!is my ex wife take money off my voluntary redundancy payment . I have been search so many legal advise site but not the very clear f advise .. Thanks very much yoursincelery.
moonlighting - 29-Nov-14 @ 11:40 PM
I think the information given is dangerously wrong. There are two JSA benefits, one contributory and one means tested. While the £16000 would affect non contributory JSA it would not affect Contributory based JSA -if you've paid or had credited enough contributions in the relevant tax years you can have as much in the bank as you want
Whitehaven - 15-Jun-14 @ 5:55 PM
I left my wife on November 12th November 2008. From then on I paid the mortgage( which was in joint names) and the bills for the property. About 1 year ago I spoke to a solicitor who told me I shouldnt be paying the bills and that I should be going through CSA which I did. This turned out to be more expensive, but I persevered and did this. The CSA reduced my payments because I was paying the mortgage after I called them. My wife lives in a 3 bed semi with two daughter aged 17. January of this year my boss was looking for people for to take voluntary redundancy as part of my workplace was closing down and therefore there was excess staff. I volunteered as I had pretty much enough of the place and I was offered a redundancy package. I had been in my job over 23 years. What I would like to know is, is my wife entitled to any of my redundandancy after we have been apart so long and I have been paying the bills etc?
Stevehull - 25-Feb-13 @ 5:01 PM
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