Do redundancy payments affect Income Based JSA.

smyffie · 27 January 2011 at 11:05PM

Hi

My redundancy is looming (last day on Sunday followed by 12 weeks gardening leave) and the company had a lady from the Job Centre Plus (amongst others) to give advice etc.

I was told that for the first 6 months I would be entitled to CB JSA, and after that it changes to Income based JSA. IB JSA is dependant on personal savings etc being below £16000. She also said that redundancy payments were totally disregarded for the £16000 cut off which I found impossible to believe. I questioned that this couldn't be right but she was adamant that she was right. Can someone on here please clarify the situation, and before anyone starts having a go I DO NOT intend being on benefits for any longer than necessary but need to make sure I aware of the facts.

Many Thanks

Smyffie

mickey54 · 27 January 2011 at 11:12PM

Firstly - you will not be able to claim JSA for the first three months - as you are on "gardening leave" - therefore you have already been paid for that period.

You will then be entitled to claim CB JSA for 6 months. IB JSA comes into play after that period - and yes, the income of £16K is taken into account.

Also taken into account is any pension that you are being paid...and this is deducted from your JSA - if you receive any.

Of course, you could reduce to less than £16K by paying off any debts. This is not seen as deprivation of capital.

smyffie · 27 January 2011 at 11:29PM

mickey54 wrote: »

Firstly - you will not be able to claim JSA for the first three months - as you are on "gardening leave" - therefore you have already been paid for that period.

You will then be entitled to claim CB JSA for 6 months. IB JSA comes into play after that period - and yes, the income of £16K is taken into account.

Also taken into account is any pension that you are being paid...and this is deducted from your JSA - if you receive any.

Of course, you could reduce to less than £16K by paying off any debts. This is not seen as deprivation of capital.

Thankyou, I know i cannot claim at all till the gardening leave is over, I suppose I should have said that.

I will not be claiming pension for a few years yet but have been told on another post on the benefits forum that paying off any debt (other than minimum payments on credit cards etc.) would be considered deprivation of capital. I had hoped to lop a load off the mortgage but posters thought this also was D of C!!

I just wondered whether the Job Centre rep had got her wires crossed somewhere.

holderness · 28 January 2011 at 12:22AM

Does your notice start after gardening leave? Otherwise it is your notice...?
You can claim JSA during your notice period if you are released with PILON

sleepless_saver · 28 January 2011 at 12:46PM

have taken this from turn2us website:

"Redundancy payments are treated as capital for means-tested benefits. If your redundancy payment takes your capital to over £16,000 and you are aged under pension age, then you are not entitled to means-tested benefits (except maybe second adult rebate for Council Tax Benefit). If your redundancy payment takes your capital to between £6,000 and £16,000, you may be entitled to means-tested benefit. However some income from your capital is assumed and your benefit amount is reduced according.
Contractual redundancy pay is treated slightly differently. The statutory redundancy entitlement is deducted from the contractual redundancy payment and the difference is ignored completely for JSA. For other means-tested benefits it is still treated as capital.
Pay in lieu of notice and holiday pay is ignored for means-tested benefits, provided you make the benefits claim after your employment ends."

getmore4less · 28 January 2011 at 1:05PM

If a company gives pilon but does not expect to to leave(get termianted) immediately then if the redundancy is below £30k negotiate to get some/all of the PILON added to the tax free pot.