Compromise agreement & JSA

abitdown_2

Am I entitled to claim jsa contributions based when I become unemployed after signing a compromise agreement with current employer ? Someone mentioned to me that I can't because I voluntarily left my job and the jsa is sanctioned. Although in theory I am voluntarily leaving my job, its not straightforward as in walking out, its complicated which is why we are going down the compromise agreement route. Not going into details as we both think this is the best option.

But would it indeed mean I cannot claim jsa contibs based ?

GlasweJen

You can claim but you wont necessarily get any money, each case is judged separately. You can get sanctioned for leaving voluntarily or if you are fired on misconduct grounds.

dmg24

The JCP will ask you and your employer for their versions of why you left. They will then decide whether your claim should be sanctioned or not, based on the reasons given. The sanction could be for up to twenty six weeks.

Uncertain

A compromise agreement means, by definition, that your are leaving by mutual consent.

There was quite a bit of talk recently about CA being used in what would otherwise be a redundancy situation. The employer was offering a little above the statutory minimum in exchange for a CA being signed. Obviously this protects the employer against the possibility of just about any possible future claim. However it is not always in the employee's best interest.

The JSA aspect is important if you are only getting a very modest payoff. The problem is that the answer is not clear cut and not always possible to find out for certain in advance.

I'm assuming you know the full implications of a CA? Also, only you will know how strong a bargaining position you are in.

By law you have to receive legal advice for a CA to be valid and it is normal (but not universal) for the employer to pay at least toward this. However, the employer in unlikely to want to pay for your solicitor to do more that the legal minimum. They certainly won't want to pay for your solicitor to argue with them on your behalf! Even small legal firms charge £150 to £200 per hour so, say, £250 won't go far.

Ultimately what matters is the bottom line, not how it is made up.

Finally, take care on the tax position of your payoff. Normally some will be pay in lieu of notice (taxable) and some as compensation (normally tax free). HMRC can look closely at this so take advice.

Uncertain

dmg24 wrote: »

The JCP will ask you and your employer for their versions of why you left.

With a well written CA this should be one and the same thing! It is normal to have an agreed statement about this and a clause preventing either party from speaking ill of the other.

unemployedJCP

I thought sanctions were only applicable to income based JSA.

Contribution JSA is for 6 months from your own NIC's.

Does anyone know whether the sanctions are applicable for Contrib JSA?

dmg24

Uncertain wrote: »

With a well written CA this should be one and the same thing! It is normal to have an agreed statement about this and a clause preventing either party from speaking ill of the other.

Of course it should be, but in reality in often is not. Even if the stories do agree, the decision regarding a sanction would be with the JCP DM.

unemployedJCP wrote: »

I thought sanctions were only applicable to income based JSA.

Contribution JSA is for 6 months from your own NIC's.

Does anyone know whether the sanctions are applicable for Contrib JSA?

This is incorrect. Sanctions are applicable to CB JSA also. NI Contributions are not an unconditional savings account!

unemployedJCP

I agree dmg - but isn't that one of the reasons why we pay N.I.C's?

It is a rather stupid system how rather conveniently what you can claim regardless of your capital etc. is taken away by the sanction lol


If you both agreed it, you weren't dismissed or left voluntary therefore no sanction would apply.

dmg24

unemployedJCP wrote: »

I agree dmg - but isn't that one of the reasons why we pay N.I.C's?

It is a rather stupid system how rather conveniently what you can claim regardless of your capital etc. is taken away by the sanction lol


If you both agreed it, you weren't dismissed or left voluntary therefore no sanction would apply.

No, we do not pay NIC's in order to be awarded benefits unconditionally.

It is not nearly as simple as that. A sanction is decided depending on the reason why the claimant left, irrespective of whether both parties agree to the termination of contract or not.

healy

unemployedJCP wrote: »

I agree dmg - but isn't that one of the reasons why we pay N.I.C's?

It is a rather stupid system how rather conveniently what you can claim regardless of your capital etc. is taken away by the sanction lol


If you both agreed it, you weren't dismissed or left voluntary therefore no sanction would apply.

I think the idea is to deter people from chucking in their jobs for no reason and claiming JSA.

People do receive sanctions for leaving jobs voluntarily ie just resign.

abitdown_2

If sanctions were applied would my national insurance contributions still be paid ? And I assume the sanction period of 26 weeks or whatever would run concurrently with my 6 month ability to claim jsa contrib based ? So in effect my ability to claim jsa contrib for 6 months would be gone ?

The reason for the compromise agreement has to remain private. The agreement itself would not give any reason, simply that I could not bring any legal actions against my employer. A full and final if you like. I am not sure where that leaves me with the jcp.