You should be prepared to claim benefits until you find another job.
If you are facing redundancy, you may well have to claim some benefits in the interim period before finding another job.
There are two types of Jobseeker's Allowance:
Contribution-based Jobseeker’s Allowance
If you have paid enough National Insurance contributions you may be entitled to make a claim. This benefit is not means tested, so will not be affected by any redundancy payment you have received.
If eligible, you can be paid this allowance for up to 6 months and after this time, if you are still unemployed, you may be able to claim Income-based Jobseeker’s Allowance.
Income-based Jobseekers Allowance
This is based on your income and savings. You may get this if you have not paid enough National Insurance contributions and you are on a low income.
This benefit is means tested. Any redundancy payment you receive might affect your entitlement. For example, if you have more than £16,000 of savings, you are not eligible to claim. However, it is still important to continue to sign on at the Jobcentre to protect your National Insurance contributions.
Other benefits
You may also be able to claim Council Tax Benefit and, if you are renting your home, you may be able to claim Housing Benefit. Again, any redundancy payment you receive might affect your entitlement. If you have more than £16,000 of savings, you are not eligible to claim.
If you are a homeowner you may also be able to get help from the schemes mentioned in the ‘Paying your mortgage’ page of this guide. If you receive Child Tax Credits, these will also need to be recalculated.
Further advice regarding benefits can be found by visiting www.direct.gov.uk.
To find out if you are eligible for other grants and benefits you can contact Action for Employment (A4e) on 0800 345 666 or visit their website at www.mya4e.com.
Tax rebate
If you pay tax under the PAYE (Pay As You Earn) scheme and the date of your redundancy was not the end of the tax year (usually the 1st week in April), you may be entitled to a tax rebate. Contact your local tax office or visit www.direct.gov.uk to find out how much rebate you may get.
Other ways to increase your income
There are other ways to improve your income. For instance:
- Can you obtain a short-term job until you find a long-term position? This may be on a much lower salary than you are used to but will help you to manage.
- Can another member of your household earn extra income by taking on a second job or weekend work?
- Do you have a spare room that you could rent to a lodger?
- Is everyone who is living with you and earning a wage contributing to the household income?