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: 15 Mar 2018 | 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.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
Hi I'm taking M.A.R.S from work mutually agreed resignation through Ill health I have been off work so far 15 weeks and when my chemo starts another 8 months all I'm getting at no is child tax and child benefit and sick pay my resignation layout it only a thousand pound but I have cancer and am bringing up 2 sons one of who h is on the spectrum I have been told that I can't claim d.l.a for him am I entitled to claim any benefits as bills need paying I've been told I'm not allowed I font know where else to go for help
Eggy - 15-Mar-18 @ 2:25 PM
Hi I'm considering taking voluntary redundancy, mainly due to ill health,however my husband is disabled and receives PIP,we are making enquiries as to we would stop receiving these payments if I was to take the redundancy.We also need to know what benefits we would get as an income to live on . I do possibly plan on continuing to work,on a part time basis,so once again would need to know how we'd stand financially. Thanks
Tina - 8-Mar-18 @ 11:26 AM
Hi my boss has lost the contract for where I'm working but there is a new company taking the contact and is willing to keep me on. If I wasnt willing to go with the new company and my boss was to say he had to pay me off cause he didn't have the hours for me woukd I be able to sign on?
Ciara - 28-Nov-17 @ 6:50 PM
Goochie - Your Question:
Can you help.i was made redundant it the begining of the year.my redundancy is almost gone.my wife does not work.can I claim job seekers or Esa?

Our Response:
You would have to speak to the JobCentre Plus regarding this and much depends upon your circumstances and whether you are looking for work etc. JSA is a non-means-tested benefit, so it is not affected by the amount of savings that you have, redundancy settlements or your partner's earnings/savings.
RedundancyExpert - 21-Nov-17 @ 3:48 PM
Can you help...i was made redundant it the begining of the year ..my redundancy is almost gone...my wife does not work...can i claim job seekers or Esa?...
Goochie - 21-Nov-17 @ 11:44 AM
Rufas - Your Question:
I was forced to resign after11 years my boss has two companys one is a subsady and I was working for that one I refused to do a job one day as it was not safe I went home my boss then rang me up gave me an ultimatum I either go back or iwas I going to resign I said id do other jobs but not that one he replied it was all there was to do so what was I going to do so I said well I will have to resign then. So am I able to take him to a tribuneral to get my redundancy money or have I got no chance ?

Our Response:
Usually, you have three months less one day from when the event happened to make a claim to the tribunal. You can see more via the CAB link here , which will tell you all you need to know. I advise you give ACAS a call in order to see whether you have any options. If you were dissatisfied with the way your employer was acting, prior to your employer asking you to resign, you could have raised the issue as a grievance instead of accepting the resignation.
RedundancyExpert - 3-Nov-17 @ 12:24 PM
I was forced to resign after11 years my boss has two companys one is a subsady and i was working for that one i refused to do a job one day as it was not safe i went home my boss then rang me up gave me an ultimatum i either go back or iwas i going to resign i said id do other jobs but not that one he replied it was all there was to do so what was i going to do so i said well i will have to resign then . So am i able to take him to a tribuneral to get my redundancy money or have i got no chance ?
Rufas - 2-Nov-17 @ 8:24 PM
I am looking to request VR March 2018. I am concerned that if the date is put back to later in 2018, that due to new government legislation, the whole amount could be taxed, rather than just the amount over 30000 as it is at the moment. Please confirm this information. Thanks
JY - 20-Oct-17 @ 10:00 PM
Northampton - Your Question:
Hi im due to be made redundant just before christmas ive been tild my redundancy will be 2027.50 for 10 years of work for the company I have 3 children and my partner isnt currently working hes a stay at home dad as we have small children and nobody who can help us with childcare the rendancy money wont last us long with paying bills and living could you please tell mewhat help will I be entitled to thank you Worried mother

Our Response:
I am sorry to hear this. You can also find out what you may be entitled to via the link here . Unless you have combined savings over £16,000, you will be able to claim.
RedundancyExpert - 29-Sep-17 @ 2:03 PM
Hi im due to be made redundant just before christmas ive been tild my redundancy will be 2027.50 for 10 years of work for the company i have 3 children and my partner isnt currently working hes a stay at home dad as we have small children and nobody who can help us with childcare the rendancy money wont last us long with paying bills and living could you please tell mewhat help will i be entitled to thank you Worried mother
Northampton - 28-Sep-17 @ 9:26 AM
Jacsel - Your Question:
The department I work in is closing in Dec. I was given the option of 1 redeployment and if I didn't get a job by oct it would turn to compulsory and leave in Dec. 2 voluntary which would mean I still leave in Dec.I opted for 2 as I didn't want to risk the chance of loosing the 22k payoff as this will pay off our dept. Now I have concerns about signing on, there will be nothing left to live off, will I be able to claim job seekers?

Our Response:
If you have paid National Insurance for the past two years, you should be able to claim Jobseekers Allowance regardless of how much savings or redundancy you have. You can use the benefits calculator here to see whether you are eligible.
RedundancyExpert - 1-Sep-17 @ 11:18 AM
Kj - Your Question:
Taking voluntary redundancy. Will get approx 13k. I worked 21 hours a week and was claiming working and child tax credits. I am wanting to work immediately after either temping or if I am lucky gettin a part time job straight away. Will I still be able to Claim working and child tax credits if I get a redundancy pay out ? I am married and my hubby works full time.

Our Response:
You can see more via the Turn2Us link here, which should help answer your question.
RedundancyExpert - 31-Aug-17 @ 12:51 PM
The department I work in is closing in Dec. I was given the option of 1 redeployment and if I didn't get a job by oct it would turn to compulsory and leave in Dec. 2 voluntary which would mean I still leave in Dec. I opted for 2 as I didn't want to risk the chance of loosing the 22k payoff as this will pay off our dept. Now I have concerns about signing on, there will be nothing left to live off, will I be able to claim job seekers?
Jacsel - 31-Aug-17 @ 7:03 AM
Taking voluntary redundancy. Will get approx 13k.I worked 21 hours a week and was claiming working and child tax credits.I am wanting to work immediately after either temping or if I am lucky gettin a part time job straight away.Will I still be able to Claim working and child tax credits if I get a redundancy pay out ? I am married and my hubby works full time .
Kj - 30-Aug-17 @ 3:19 PM
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
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the RedundancyExpert website. Please read our Disclaimer.