Voluntary redundancy

alexthecheese

Hi all

Have searched the forums for this and have been reading up in entitlements, but it's difficult to see where you lie from others specific situations.

I am considering applying for voluntary redundancy at my current employment. The terms are 6 months pay, £15200, leaving at the end of February.

I have a mortgage to pay of £350quid per month, plus £350 bills and £100 food, say.

I have about £8k on credit card, which is on a barclaycard at 0%, being paid off at £200 pounds per month.

My questions are:
- can I claim benefit after taking voluntary redundancy?
- what level of assets/cash do I state I have when applying? I would not like to pay off the credit card immediately, instead leave it ticking over at £200 per month, and live off the redundancy money. Would this affect my entitlement?
- will the £15200 be entirely tax free, ie regardless of my earnings so far this year?
- would I be forced to apply for full time Jobs, or could I accept part time jobs?

I figure I can live for at least a year on that sum, whilst retraining and looking for a new job in the meantime.

Any advice greatly welcomed, thanks.

RAS

Redundancy money is supposed to cover your living costs until you can get a new job.

You need to goto https://www.turn2us.org.uk to find out about benefits but basically if you have more than £16k in any form of saving, you get nothing, below that you get reduced support until the money is less than £6K.

However, if you use the VR money to reduce your debts for anything that is not strictly due (so Council Tax, utility debts, normal monthly debt payments) or necessary, they may consider it deprivation of capital. If they do that, you get treated as if you stiull had the money.

So no money and no benefits.

alexthecheese

Indeed. So if I have £15k in my pocket, there's no benefits to be had? I read on another thread that there is a calculation of losing £1 per week per £X savings. Is this applicable?

Hmm71

Your redundancy money will be tax free, you would only pay tax if it was over £30,000 and then only on whatever was over the £30,000.

Whether you can claim anything would depend on your reason for leaving. I took voluntary redundancy last year and got a letter to show to anyone concerned that it was part of a management headcount reduction which meant that, if I'd needed to, I should still have been able to claim JSA as they would have got rid of me sooner or later anyway.

Hmm71

alexthecheese wrote: »

Indeed. So if I have £15k in my pocket, there's no benefits to be had? I read on another thread that there is a calculation of losing £1 per week per £X savings. Is this applicable?

I'm not exactly sure what calculation they use but yes, they will look at your capital of anything over 6k and they will assume an amount of income from that and that will be included in your benefit calculation.

As RAS said if you had over £16,000 you won't get anything at all.

xylophone

http://www.south-ayrshire.gov.uk/welfarerights/redundancy.aspx

Be aware of the difference between contrib JSA and income based JSA.

Caz3121

My husband took voluntary redundancy a couple of years ago

1) "Redundancy pay" is not taxable (up to £30k)
2) any PILON or holiday pay will be taxable
3) you can claim Contribution based JSA for 26weeks - £71 per week

hopefully by the end of the 6 months you should have a job. If not you would claim for Income based JSA and they would want bank statements and information on where the money has gone.....some spending is allowed, others not...it is up to the decision maker.
Keep details/receipts of your spending

If you qualify for income based JSA, you could then receive SMI - which is help with the interest on your mortgage

rogerblack

Addressing the unanswered bit of the query - yes - unless you have disabilities or caring responsibilities, you will usually be expected to be available for fulltime work.

Nick_C

Caz3121 wrote: »

2) any PILON or holiday pay will be taxable

In my experience, PILON is generally non taxable. Your employer should be able to advise.

BigAunty

Why would you not want to pay off your credit card debts especially as you've indicated you may enter part time employment?

I'm not fully sure of the position of paying off debts and then claiming benefits, it's a complex area, do get expert advice. The paying off of some debts ahead of their term *may* get classed as intentionally depriving yourself of capital when it comes to applying for means tested benefits. 8k is presumably actually due for repayment imminently, and it is your own repayment schedule of £200 per month rather than one requested by the lender?

rogerblack

BigAunty wrote: »

Why would you not want to pay off your credit card debts especially as you've indicated you may enter part time employment?

I'm not fully sure of the position of paying off debts and then claiming benefits, it's a complex area, do get expert advice. The paying off of some debts ahead of their term *may* get classed as intentionally depriving yourself of capital when it comes to applying for means tested benefits. 8k is presumably actually due for repayment imminently, and it is your own repayment schedule of £200 per month rather than one requested by the lender?

The amount due on a credit card is the minimum payment.
The full amount only becomes immediately repayable if you default on the minimum payment, and don't pay for some time.