Redundancy Payments from National Insurance Fund

thecoffeehouse204

Bit of an odd question but i've not been able to find any info online so thought someone on here might be able to shed some light.

The small firm I worked for went into voluntary liquidation in early January and the 8 employees made redundant with immediate effect. I was sent an RP1 form by the liquidation firm which I filled in and sent back and received my confirmation letter last week that payment would be made in the next 4 days and my RP2 form to claim PILON was sent back on Monday.

Now i'm a bit concerned as a few of the employees met up yesterday and one of the lads has said he didn't bother sending off his RP1 form as because the payments come from the National Insurance Fund if you do claim for lost redundancy pay they take off whatever you get paid from your NI contributions already made which means you end up with less pension later on. He was very insistant that this was the case making the point that the insolvency service can't just be giving you this money for free so it has to come from somewhere!

I can't find any reference to this online and i've checked the copy I made of my RP1 and there's no mention of it on there. If I'd been made aware of this I probably wouldn't have bothered applying either we could have managed without at present but may end up missing the money when it comes to pension time. Can anyone confirm if this is the case or if this other lad has just done himself out of £2k redundancy. If it is I might try and get in touch with the insolvency service to put a stop to my PILON claim so I don't lose out on any more pension.

TIA

toddle2u

Hi
Your colleaugue is incorrect and the repayment does not come from your NI contributions already made. So do not cancel your PILON claim

thecoffeehouse204

Thanks for the reply - I thought he was talking rubbish but he seemed so convinced it did start to make me worry. Not sure I want to be the one to break the bad news to him though as he's lost out on quite a big payout with redundancy and the PILON.