Redundant and benefits

scoop19

Hi all,
I was made redundant last August but due to being pregnant at the time, my maternity was protected and my employer has been paying it since. I am due my final payment in June and my redundancy pay will follow. My question is, we are still on the old system of tax credits rather than universal credits and I can't find any information as to whether I need to declare my redundancy payment as income?

I'm guessing that the government will see this change as a reason to switch us to universal credits and I know it is treated as capital for that. Would we be better off transferring to universal credits before I get the redundancy payment? My redundancy payment has already been earmarked to settle a couple of debts so we wouldn't be above the £6k threshold for long.

davilown

scoop19 said:

Hi all,
I was made redundant last August but due to being pregnant at the time, my maternity was protected and my employer has been paying it since. I am due my final payment in June and my redundancy pay will follow. My question is, we are still on the old system of tax credits rather than universal credits and I can't find any information as to whether I need to declare my redundancy payment as income?

I'm guessing that the government will see this change as a reason to switch us to universal credits and I know it is treated as capital for that. Would we be better off transferring to universal credits before I get the redundancy payment? My redundancy payment has already been earmarked to settle a couple of debts so we wouldn't be above the £6k threshold for long.

It won’t be classed as income for means tested benefits BUT it will be classed as capital so anything above £6,000 will affect means tested benefits as you stated.

definitely worth speaking to an advisor as I think assuming you pay the debts off (and they’re in your name, you should be okay

poppy12345

scoop19 said:

I'm guessing that the government will see this change as a reason to switch us to universal credits

  It's not a change of circumstances that will prompt a move to UC. Whether you'll be better off on UC will totally depend on your circumstances and you should use a benefits calculator to check entitlement. Although you should wait to claim UC once you received your last pay from your employer. Redundancy doesn't affect UC as earned income but it will be classed as savings. Any pay in lieu of notice will affect UC and reduce it by 63% after the work allowance.