Made redundant while having a second job

clayrelou

Hi,
I was just looking for some advice on what to do. I've been made redundant from my main job which I was there for 7 years so am entitled to 7 weeks notice period pay. I also have a second job in a bar which I earn around £50 a week after tax. What I'd like to know is am I still allowed to work my second job and claim job seekers allowance? Is there any point me working for just £50 a week when I can claim benefits until I find a new job?

P.s I've never claimed any benefits in all my working life.

jdturk

I don't know the answer but in your answer to whether its worth working for £50 instead of collecting JSA which I think is £64 a week I would suggest yes for the following reasons.

1) If you carry on working at least on your CV you will be able to put this and not have a long gap out of work if you are unable to find something quickly.
2) It keeps you social/active and you are less likely to become cooped up at home
3) Theres also a differance to earning £50 compared to recieving £64 in a person mindset (a positive one IMO)
4) Keep working as you may keep options open for more hours to tide you over
5) Rememer your second job is taxed at 40% if I am correct and thus if you aren't working your tax should reduce dramatically and if you are under the weekly threshold you may not pay tax at all

Hope that helps

Andy_L

jdturk wrote: »

5) Rememer your second job is taxed at 40% if I am correct

No, 2nd job income is only taxed at 40% if, when added to income from the 1st job, it takes you into the higher rate band

jdturk

Andy_L wrote: »

No, 2nd job income is only taxed at 40% if, when added to income from the 1st job, it takes you into the higher rate band

Oh right, I'd always heard that a second job always got taxed more but I will take your word on it.

sulkisu

clayrelou wrote: »

Hi,
I was just looking for some advice on what to do. I've been made redundant from my main job which I was there for 7 years so am entitled to 7 weeks notice period pay. I also have a second job in a bar which I earn around £50 a week after tax. What I'd like to know is am I still allowed to work my second job and claim job seekers allowance? Is there any point me working for just £50 a week when I can claim benefits until I find a new job?

P.s I've never claimed any benefits in all my working life.

Have you checked whether you would be penalised (as far as claiming benefits are concerned) for giving up your job? I realise that it is your second job and that you were made redundant from your main job, but it is still paid employment. I would have thought that you woul be in the same position as anyone else who has a job and walks away from it. Perhaps someone with more knowledge of the JSA rules, can clarify this point? Is it possible for you to increase your working hours?

kelloggs36

How many hours per week is your second job? If it is under the limit (it used to be 16 per week), you can still work, but will need to declare it when you sign on, and you will be left with an extra £10 per week (?) as they will deduce penny for penny what you earn over and above the first £10 per week (unless the limits have increased).

ceridwen

Its a fair point to think in terms of the fact that if the main job goes then there will be no tax on the secondary job - which might mean that it paid at least the £64.30 due in benefit money.

I think its only £5 per week that a childless person is allowed to keep from any earnings they get on top of benefit - not £10. The way these things go I wouldnt be surprised if it stays at £5 for quite some time too.

I guess one thing to take into consideration is whether the secondary job is at least 16 hours per week - I'm not sure whether OP would be deemed eligible for benefit if she loses that job as well if it IS less than 16 hours. That needs checking-up on. I believe that DWP counts any job that is 16 hours or more per week as being full-time these days - and therefore full benefit is due if one loses it (wierd idea - as full-time jobs are 35-40 hours a week ITRW - but there you are....).

rupee99

jdturk wrote: »

Oh right, I'd always heard that a second job always got taxed more but I will take your word on it.

A second job is taxed at your highest rate of tax, e.g. if your first job pays you £40,000 and your second one £5,000, you would use your personal allowance and most of the 20% band on your first job, and the last c.£2,000 would be taxed at 40%. However if your first job paid £25,000 all of your second job would be taxable at basic rate.

Although for the OP tax is not a consideration as it is unlikely that s/he will be liable to any other than a possible refund should they not find a full-time job before April. In fact will not have to pay tax on the notice or redundancy pay.

anamenottaken

rupee99 wrote: »

In fact will not have to pay tax on the notice or redundancy pay.

May well have to pay tax in respect of notice pay - depends on contract and custom & practice.

If the part-time job pays £50/week after tax then that suggests earning over £62/week gross, with (as stated above) all of that but for £5 being offset against JSA payments.

However on that level of earnings, NI contributions would not be paid. So, if you sign on you get credit for the missing NI contributions from not having a higher income. Worth signing on for that.

ceridwen

anamenottaken wrote: »

May well have to pay tax in respect of notice pay - depends on contract and custom & practice.

If the part-time job pays £50/week after tax then that suggests earning over £62/week gross, with (as stated above) all of that but for £5 being offset against JSA payments.

However on that level of earnings, NI contributions would not be paid. So, if you sign on you get credit for the missing NI contributions from not having a higher income. Worth signing on for that.

Oops overlooked that point - but it is a good one. Didnt think of that because it doesnt apply to me (as I've got in my 30 years+ of NI contributions that I need for my State Pension).

Though - quite apart from that - there is the thing that if one is in a job that pays too little to cover ones NI contributions - then presumably one also needs to "sign on" anyway - in order to ensure a full NI contribution record for the last 2(?) years to make sure that you get the first 6 months unemployed on non means-tested JSA (rather than means-tested JSA) - so that you have 6 months leeway in which it doesnt matter whether you have savings over £6k and/or are living with a partner.

Wonderful100

Although it may sometimes seem like the better option you can't leave your job anyway as doing so usually means that all benefits are suspended altogether for a period of at least a few months.

The only option would be to continue to work and to look into claiming working tax credits to top up your income, I don't know the set criteria but know that hours worked and age come into it. As you are working the JSA is not an option as you will not be entitled to it but may well be entitled to another benefit instead.

An informal chat with the CAB would be very beneficial prior to making any decisions or making any claims with the benefits office.

I wish you well.