Home > About Redundancy > Can I Claim Benefits If I Have Volunteered for Redundancy?

Can I Claim Benefits If I Have Volunteered for Redundancy?

By: Emma Eilbeck BA (hons) - Updated: 3 Jul 2017 | comments*Discuss
 
Redundancy Redundant Claim Jobseeker’s

Being able to claim benefits after you have been made redundant is often a vital part of financial survival if you are short of funds.

Taking voluntary redundancy should not hinder your chances of being able to claim benefits, but there are some circumstances in which your redundancy may be affected.

There are mountains of benefits on offer to newly redundant employees and these few questions should help you decide what you are entitled to.

1) How Much Was Your Voluntary Redundancy Pay?

  • A) Under £16,000
  • B) Just under £16,000
  • C) Over £16,000

2) Does Your Partner Work?

  • A) No
  • B) Yes but less than 24 hours a week
  • C) Yes, more than 24 hours a week

3) Are You Able to Work?

  • A) No, I took voluntary redundancy because of my health
  • B) The work I can do is limited
  • C) Yes I am fully capable

4) Do You Plan to Retire?

  • A) No
  • B) I am considering retiring
  • C) Yes, I plan to use voluntary redundancy as a means for retirement

Your Answers

Mostly A – Your Benefit Claims Will Not Be Affected

Voluntary redundancy is normally classed just the same as normal redundancy and you will be viewed the same by the government. Although you have volunteered for redundancy there was still the need to make redundancies by your employer, so in most cases it will be treated the same.

You sound like you would benefit from being able to claim some benefits and this is exactly what you should do. If you did not receive a large lump sum when you took voluntary redundancy or this was less than £16,000 and you don’t have a lot in savings, you should be able to claim jobseeker’s allowance. Even if you are not eligible for contributions based you will be eligible for incomes based.

If you are eligible for jobseeker’s allowance you will also be eligible for employment and support allowance, providing you meet all the necessary criteria. This is normally awarded to households that have no income coming in and those that have a “limited capability for work”.

This benefit works in the same way to jobseeker’s allowance. You may also be eligible for housing and council tax benefit if you are in dire straits with your finances and cannot meet your rental payments.

Mostly B - Your Benefit Claim Could Be Affected

To claim most kinds of benefits you will need to have savings of less than £16,000. Problems often arise when employees opt for voluntary redundancy and receive a substantial payout.

If this combined with your savings means you have savings of over £16,000 you will not be eligible for income based jobseeker’s allowance and you will need to rely on contributions base jobseeker’s allowance, which relies on you having contributed enough national insurance.

If you are considering retiring or giving up work altogether your voluntary redundancy decision will not impact this but you will have to prove to the government that you are unable to work in order to claim any benefits. If you plan to retire your voluntary redundancy package may be taxable if you do not plan to work again.

Mostly C– Some Benefits May Be Off Limits

From your answers it sounds like you may have trouble claiming some types of benefits. This is not necessarily because you have chosen to take voluntary redundancy but it could be because of the impact voluntary redundancy has. If your redundancy pay is over £16,000 this will automatically rule out some types of jobseeker’s allowance. Also if you are planning to use your voluntary redundancy money towards retirement it will be taxable.

If you are financially well off then it is unlikely that you will qualify for any other benefits even if you are facing retirement.

Voluntary redundancy will in most circumstances be classed as any other type of redundancy when it comes to claiming benefits. You should be able to start claiming benefits from the day you are made redundant. What you need to take into consideration is that voluntary redundancy will often result in a heftier payout which could make you financially better off, which in turn could limit the benefits that are available to you. Have a glance at our case study about what happened after one reader took voluntary redundancy.

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[Add a Comment]
What are the rules when/if I can claim JSA if I have been made voluntarily redundant. I received a cash pay out of £30k but then added more into my pension.
deegee - 3-Jul-17 @ 8:33 PM
Char- Your Question:
Hi I am looking to take vr, I will come out with nothing. I have one child under 5. Will I get help?

Our Response:
I can only direct you to the Entitled To website here which should give you more information.
RedundancyExpert - 20-Jun-17 @ 1:42 PM
Hi I am looking to take vr, I will come out with nothing. I have one child under 5. Will I get help?
Char - 19-Jun-17 @ 1:48 PM
HotlinetoHel Back - Your Question:
I am considering taking VS the amount will be approx £11,000, I have chosen to do this due to chronic arthritis and can currently only work for 4 hrs a day caring for children. My wife works 22.5 hours a week, and we have about £2,000 savings, we live with parents, so thankfully have low overheads. Would I be entitled to any benefits? Thanks in anticipation.

Our Response:
If you have been made redundant help may be available to you, depending on your income, savings, health, family and type of accommodation, please see Turn2Us link here.
RedundancyExpert - 31-May-17 @ 2:13 PM
I am considering taking VS the amount will be approx £11,000, I have chosen to do this due to chronic arthritis and can currently only work for 4 hrs a day caring for children. My wife works 22.5 hours a week, and we have about £2,000 savings, we live with parents, so thankfully have low overheads. Would I be entitled to any benefits? Thanks in anticipation.
HotlinetoHel Back - 30-May-17 @ 10:39 PM
Edinburgh - Your Question:
I am 55 and taking voluntary severance (package of £28k) and my company pension lump sum (£22k), and intend on paying off debts of £21k (credit cards) and £25k off of my mortgage which leaves £4,000 to pay for my monthly mortgage, bills and live on etc until I find suitable part-time work.Can I claim benefits until I find another job? I have never claimed benefits before but have paid tax and National Insurance for 40 years.

Our Response:
You should be eligible able to claim Jobseekers Allowance, please see link here.
RedundancyExpert - 25-May-17 @ 10:56 AM
I am 55 and taking voluntary severance (package of £28k) and my company pension lump sum (£22k), and intend on paying off debts of £21k (credit cards) and £25k off of my mortgage which leaves £4,000 to pay for my monthly mortgage, bills and live on etc until I find suitable part-time work. Can I claim benefits until I find another job? I have never claimed benefits before but have paid tax and National Insurance for 40 years.
Edinburgh - 24-May-17 @ 3:51 PM
Rastus Pestus - Your Question:
I recently took voluntary exit (not redundancy) from the Civil service and received c £30,000. I'm not retiring so can I claim JSA?

Our Response:
If you are up to date with your national insurance contributions and are actively seeking work, you should be able to claim, please see link here.
RedundancyExpert - 4-May-17 @ 3:02 PM
I recently took voluntary exit (not redundancy) from the Civil service and received c £30,000. I'm not retiring so can I claim JSA?
Rastus Pestus - 4-May-17 @ 9:31 AM
I will be made redundant on June 23 2017.I have volunteered for redundancy due to my wife being on pip so I will be her full time carer, what are my entitlements.
Billy - 4-Apr-17 @ 8:29 AM
Both me and my husband have been accepted for vr.My husband will also be taking his pension with his vr as he will be taking retirement. I am only entitled to my vr payment which is less than £16k. We also gave 1 dependant.Our we entitled to any benefits?
Carol2807p - 10-Feb-17 @ 1:18 PM
C21 - Your Question:
Hi, My company is relocating to another area of the country and my job has been put at risk. I have been given a redundancy letter with the option to choose voluntary redundancy or redeployment. We have been told that even if we tick redeployment there are not any jobs there for us. There are approx. 10,000 people being made redundant and only a handful of jobs. I want to tick voluntary redundancy but I am concerned that I will not be able to claim JSA if needed. I will initially have over 20k in my bank account but if I cannot find a job before this runs out will I be able to claim Job seekers? Many thanks.

Our Response:
If you have been paying National Insurance, your savings should not affect your ability to claim Jobseekers Allowance if you are actively seeking work, please see gov.uk link here which will tell you if you are eligible.
RedundancyExpert - 29-Nov-16 @ 11:58 AM
Hi, My company is relocating to another area of the country and my job has been put at risk. I have been given a redundancy letter with the option to choose voluntary redundancy or redeployment. We have been told that even if we tick redeployment there are not any jobs there for us. There are approx. 10,000 people being made redundant and only a handful of jobs. I want to tick voluntary redundancy but I am concerned that I will not be able to claim JSA if needed. I will initially have over 20k in my bank account but if I cannot find a job before this runs out will I be able to claim Job seekers? Many thanks.
C21 - 28-Nov-16 @ 2:06 PM
I took voluntary redundancy, on the 23 October 2016,work ed for the company for ten years. Only get child benefit. My partner works 40 hours, 225000 per year. I amactively seeking work, am I entitled to any benefits.
Bali - 22-Nov-16 @ 5:35 PM
Noeyy - Your Question:
Hi, thinking of taking my vr, they are lookin around 20, I live on my own, my kids stay with me at the weekends, I would only get around 6000, I have no savings at all either

Our Response:
You will be eligible to apply for Jobseekers Allowance if you have paid National Insurance for the past two years and you are seeking another job.
RedundancyExpert - 12-Oct-16 @ 12:45 PM
Hi, thinking of taking my vr, they are lookin around 20, i live on my own,my kids stay with me at the weekends,i would only get around 6000, i have no savings at all either
Noeyy - 11-Oct-16 @ 8:19 PM
I have been offered sevens to leve the company I'm working for can I get any job seekers or any other payments as I'm in a wheelchair Thanks Tony
Tony heath - 12-Jul-16 @ 8:51 PM
kaaob - Your Question:
HiI have taken VR from my company. My VR package was £10800 and I received 12 weeks PILON on top of that plus holidays accrued. Taking my final salary to 17K. My last working day is 30/06/2016. Is the total amount classed as redundancy or only the VR payment?Do I need to sign to get my NI paid and would I be entitled to JSA?Karen

Our Response:
You may be entitled to JSA regardless of your redundancy package, if you have paid NI over the previous two years and you are actively seeking work. However, other requirements may apply here. To find out for sure, you would need to contact the JobCentre Plus or fill in the form, they will let you know pretty quickly if you are eligible to apply.
RedundancyExpert - 1-Jul-16 @ 10:12 AM
Hi I have taken VR from my company. My VR package was £10800 and I received 12 weeks PILON on top of that plus holidays accrued. Taking my final salary to 17K. My last working day is 30/06/2016. Is the total amount classed as redundancy or only the VR payment? Do I need to sign to get my NI paid and would I be entitled to JSA? Karen
kaaob - 30-Jun-16 @ 10:25 AM
Hi, I was issued with a redundancy notice and my last day of employment is 31st August. ( I work in school)last week I was told the redundancy notice has been retracted but I can still take voluntary redundancy if I want to. In January I had a total knee replacement and needed three months off. Due to the way my redundancy notice was handled I'm now signed off with work related stress. I am currently also waiting for a date for my other complete knee replacement surgery, so will need another chunk of time off to recover. Altogether my sick leave is going to go over my allowed time so the time needed for the second op they will only pay me half pay. I'm on my own with a mortgage and bills and half pay will not cover it all. Without the second op I will end up unable to walk. The redundancy package is only three months wages, would I be entitled to benefits until I'm in a position to apply for jobs?
JAC - 26-Jun-16 @ 6:16 PM
My company is making 88 people redundant. I'm classed as "affected" if I ask for voluntary redundancy & am accepted will this affect claiming contribution based job seekers allowance? Thanks
G - 22-Apr-16 @ 10:36 AM
I'm taking voluntary Redundancy in July due to ill health. My partner works full time and we have a daughter in Uni. Will I be entitled to any benefits.
J - 2-Apr-16 @ 8:23 AM
joey - Your Question:
I have been off work long term with severe fatigue, heart and liver disease, Voluntary redundancy has came up in work, Can I take it whilst still off and will I be able to claim any benefits.

Our Response:
Yes, you can. The benefits you would receive would depend upon your savings and whether your illness can be assessed as disability and/ or whether you may wish to look for another position, in which case you can claim Jobseekers Allowance. Please see EntitledTo link here.
RedundancyExpert - 29-Feb-16 @ 12:26 PM
I have been off work long term with severe fatigue, heart and liver disease, Voluntary redundancy has came up in work, Can I take it whilst still off and will I be able to claim any benefits.
joey - 28-Feb-16 @ 4:22 PM
I took VR in August after my post was disestablished and the responsibilities condensed into a new role with vast responsibilities. I have recently discovered that the original job has now been given back to one person. How do I stand? Is that legal?
MC - 11-Jan-16 @ 8:41 PM
hi i will receive just under £10,000 voluntary redundancy pay and i have about £6000 savings, my partner is in full time work and i have no mortgage.Can i still claim job seekers allowance or some kind of benefit. i have worked over 30 years mostly full time
binardoneto - 27-Nov-15 @ 3:05 PM
Hi If you take Voluntary redundancy as opposed to compulsory redundancy and the payoff is more than £16K will I be sanctioned by DWP if I claim contribution based JSA as that may be seen as making myself redundant rather than being made compulsory redundancy? Regards
nashil - 1-Jun-15 @ 3:42 PM
@Em - I have included a link to Turn to Us link here which should be able to help calculate your entitlement.
RedundancyExpert - 1-Jun-15 @ 11:43 AM
Hi I am considering VR.I will receive less than £16000. My husnand weeks full time but we cannot survive solely on his wages as we have a mortgage and the usual gas electric bills. We have two young kids under the age of seven, so going back to work that will pay enough for childcare will be difficult. Will I be eligible for any financial support to help towards mortgage and bills?
Em - 28-May-15 @ 1:40 AM
@List80 - Sorry to hear you are being made redundant. Benefits such as JSA allow you to have £6,000 in savings before you are penalised. In addition, I have directed you to the Entitled To site which can tell you exactly what you can receive by filling out its questionnaire, link here. I hope this helps.
RedundancyExpert - 16-Jan-15 @ 10:47 AM
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