Redundancy and signing on
What you can claim if your employer lays you off
Redundancy is a form of dismissal from your employment. It doesn't mean that you've done something wrong, just that your employer, for whatever reason, has decided to reduce the size of the workforce.
However, these reasons must be genuine and your employer must follow certain procedures, including carrying out a proper consultation, giving adequate notice and not discriminating against anyone on grounds such as their sex or race.
Your employer must also consider whether they have alternative work available if you want it.
You are still entitled to any holiday and statutory sick pay, even after you've been told you will be made redundant.
Redundancy pay
You might be entitled to redundancy pay as compensation for losing your job. There are two sorts of redundancy pay:
- Statutory redundancy pay, which is set down by law
- Contractual statutory pay, which you may get if there is a redundancy scheme in place where you work. The details will be in your contract of employment.
You'll be entitled to statutory redundancy pay if you've worked for your employer for at least two calendar years continuously since the age of 16, and are classed as an employee.
If you qualify, you have the right to:
- Half a week's pay for each complete year of employment when you were below the age of 22
- A full week's pay for each complete year of employment when you were between the age of 22 and 40
- A week and a half's pay for each complete year of employment when you were above the age of 41.
Amounts less than £30,000 are tax free.
Claiming benefits
If you're not able to find another job after you've been made redundant, you might be able to claim benefits.
For example, depending in your circumstances you might be entitled to Jobseeker's Allowance (JSA), Housing Benefit, Council Tax Benefit, free school meals for your children and help with NHS costs.
Benefits depend on your circumstances. You should claim benefits as soon as you can - you can make a claim on your first day of unemployment.
Claiming Jobseeker's Allowance (JSA)
To claim JSA, contact your local Jobcentre Plus as soon as possible after being made redundant. You can also call them on: 0800 055 6688 to find your nearest office.
You will be given a JSA claim pack and an appointment to discuss your job seeker's agreement. This will indicate what steps you will take to find work.
You must 'sign on' at the job centre once a fortnight. You will have a short interview to check your situation, job seeking progress and any change of circumstances. You should receive payments within a few days of signing on.
There are two types of JSA:
- Income-based JSA
- Contributions-based JSA
If you've received redundancy pay this might affect your right to claim income-based JSA since it is dependent on the level of your income and savings.
Eligibility for contributions-based JSA depends on the level of your National Insurance contributions in the previous two tax years.
There are various factors that can complicate JSA claims, such as your partner's income and whether or not you are a student.
If you are refused JSA, you might still be able to get a hardship payment.
Other benefits
If, having been made redundant, you are able to claim income-based JSA, you will be able to get maximum Housing Benefit (to help with rent) and Council Tax Benefit (which reduces your Council Tax bill). You will also be entitled to other help, for example, free prescriptions, free school meals for your children, and help with the costs of a newborn baby. If you are on contribution-based JSA, you may be entitled to some of these benefits and help, depending on your income.
If you are not eligible for JSA you might still be able to claim some of these other benefits, however, this depends on your income and other factors, such as whether you have a dependent child or are caring for someone.
Other help for people on low incomes is available through the Social Fund.
Employment and Support Allowance (ESA)
The other main benefit for people of working age is the Employment and Support Allowance ESA). This has replaced Incapacity Benefit and Income Support paid to people who aren't well enough to work.
If, having been made redundant, you develop sickness or disability that prevents you from working, and you satisfy certain tests, you can claim ESA by contacting Jobcentre Plus , tel: 0800 055 6688.
Tom Green
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