Am I allowed to work or claim unemployment benefit

kawan2 · 4 January 2005 at 11:07PM

I am being made redundant. Company has offered an enhanced package. Money is given in lieu of notice period (3 months). Total package amount is below the allowed tax free sum of £30,000.

Questions:

(1) If my last day is 31 Jan 2005, and miraculously, I start on a new job on 1 Feb 2005, will my package amount be subjected to tax as the company has paid me 3 months in lieu of notice period?

(2) If I do not have a job and I signed up at Social Security on 1 Feb 2005, will I get any money immediately or once again I will have to wait 3 months before any benefits kick in?

Thanks.

Fran · 4 January 2005 at 11:14PM

This REDUNDANCY HELP website might be useful.

Spendless · 4 January 2005 at 11:37PM

I am being made redundant. Company has offered an enhanced package. Money is given in lieu of notice period (3 months). Total package amount is below the allowed tax free sum of £30,000.

Questions:

(1) If my last day is 31 Jan 2005, and miraculously, I start on a new job on 1 Feb 2005, will my package amount be subjected to tax as the company has paid me 3 months in lieu of notice period?

(2) If I do not have a job and I signed up at Social Security on 1 Feb 2005, will I get any money immediately or once again I will have to wait 3 months before any benefits kick in?

Thanks.

Q1 - Redundancy payments did not used to get taxed on even the 'in lieu of' bit. That was the case when i was made redundant in Dec 1997. But that's a while ago now and things might have changed since :-/

Q2 - I wasn't able to claim anything as i had had 6 weeks money in lieu of notice as part of my redundancy package. I still informed the Job Centre though and i used to sign on every fortnight anyway so my stamp was paid even though i didn't receive any benefits till after the 6 weeks were up.

Good Luck in your job hunting

Ted_Hutchinson · 5 January 2005 at 12:43AM

Details of Jobseekers Allowance here Jobcentre website

Contribution-based JSA is paid at a fixed rate based on your age for up to 26 weeks. However if you have been paid money in lieu of notice this will stop JSA being paid for that time so in order to extend the 26 weeks it may be prudent delay claiming JSA until the payments in lieu of notice period has expired.

kawan2 · 5 January 2005 at 11:02PM

Thanks, folks for your replies. Some of your answers have raised some other questions that I will raise with the lawyer (if there is time) when s(he) goes through the compromise agreement with me.

camper · 7 January 2005 at 1:00AM

JSA Contributary is payable for a total of 182 days in any tax year, starting once claim is made and after any pay in lieu or holiday pay period. Credits will be awarded for each full week from date of claim.

Any other disallowance, will run alongside the 182 days count, even though benefit is not in payment. Credits will also not be awarded (which may affect pensions).

So do not delay claims because of pay in lieu.

Alternatively, you can apply at the Jobcentre direct, to have National Insurance credits awarded for the pay in lieu notice period. This means you won't need to sign on each fortnight for that period but must still be job ready when you eventually ring!

Also note that any holiday pay is taken into account after pay in lieu, and credits are not awarded for this period unless you are already registered as unemployed.

CAMPER

Am I allowed to work or claim unemployment benefit

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free