Post-redundancy support

Once you have been made redundant, there are guidelines that your employer should follow to assist you in returning to work.  Listed below are some examples of what to expect:

Claiming benefits

If you are unemployed, you can find information about Jobcentre Plus services and claiming benefits, such as Jobseekers Allowance. You will be given an appointment to come into one of over 750 job centres for personal help and advice on finding work.

To make a claim for Jobseekers Allowance (JSA) you will need the following information:

  • National Insurance Number
  • Details of rent or mortgage
  • Details of past or present employment
  • Adults who live in your home
  • Details of other income and savings, including those of a spouse or partner

You can call 0800 0 55 66 88 (8am-6pm Mon-Fri) or claim online.

Extra support is available if you are still unemployed and claiming JSA after 3 months and intensive support is available after 6 months of unemployment. This support can include:

  • Help setting up a new business – advice on creating a business plan, plus funding for the first few months of trading
  • New training places - extra funding for training places to help you to increase your chances of getting a job. You can enhance your current skills with additional qualifications and training or try out new sectors and gain new skills
  • Volunteering options – more opportunities to volunteer to help keep your skills and experience up to date as well as developing new skills
  • Recruitment subsidies – the opportunity to work with an employer who receives a subsidy to take on redundant staff and supplies an in-house training support package

For more information on any of the above, visit the Back to Work section on the Direct Gov website.

Income Tax and Relocation Packages

If a job requires that you move to a new area, the first £8,000 of any help that you receive from your employer is exempt form tax, providing that certain conditions are met. Expenses associated with buying and selling a home, moving and travelling are included.

On your return to employment

When you are made redundant your employer should give you a P45 form. Give this to the benefits office or your next employer. If you do not, you will be placed on an emergency tax band and pay additional tax until you have contacted your Inland Revenue.

More information is available from Her Majesty’s Revenue and Customs’ Redundancy Factsheet.

Redundancy Pay

Under the Employment Rights Act 1996, if you are made redundant you have a right to a payment from your employer if you have had 2 or more years of continuous service. 

  • Exemptions from redundancy pay
  • Timescales for claiming
  • Tax and benefits
  • Insolvency

If you are unsure of what redundancy pay you are entitled to,  you can get help from the Department for Business, Innovation and Skills (BIS) Redundancy Helpline on 0845 145 0004 or use their Redundancy Pay Calculator.

Redundancy Tax

Redundancy payments up to £30,000 whilst working for any one company are normally free of tax, however any payment above £30,000 is taxed at your highest rate. Some redundancy payments are not tax free, such as when your employment contract specifies any redundancy pay or benefits. Although, it may be possible to negotiate with your employer to made additional payments into your pension instead of making a redundancy payment. This will enhance your pension and help you avoid paying tax on those payments above £30,000.

If you have received a lump sum from your employer as a redundancy or compensation payment you will need to complete a tax return form.

Right to appeal

Any employee who has been issued with a formal notice of redundancy will have the right to appeal if they feel the redundancy is unjustified or the selection process was unfair.

  • Your rights
  • Employment tribunal
  • Employee representatives

The Trade Union Congress (TUC) is made up of 58 unions that represent over six and a half million people across the UK. The TUC  campaign for a fair deal at work for people from all walks of life and can provide expert advice in redundancy situations.

To find out reasons to join a union and to find the right union for you and your job, visit www.worksmart.org.uk/unionfinder

Tax and benefits

Jobseeker's Allowance replaced Unemployment Benefit and Income Support for unemployed people in October 1996. Unemployed people can claim this allowance for themselves and one adult dependent. This allowance is a taxable income. If you are not working at the end of the year (April 5th) you will get a P60U form. This details the taxable benefits you have received and the tax that you have paid.

You can not claim a PAYE tax refund while you are claiming benefit. When you get a job, complete the form at the back of booklet ES40 (which gives details about signing on) and return it. The job centre will then give you a P45 for your new employer. If you have paid too much tax your new employer or your job centre will give you a refund.

Tax credits

If you are responsible for at least one child or young person who normally lives with you, you may qualify for Child Tax Credit. This is a regular payment made to support families with children, including 16-19 year olds in full-time education or approved training. The amount you receive is based in your income and you can receive help whether or not you work.

If you work and are receiving Child Tax Credit, but earn low wages or work less than 16 hours a week, you may qualify for Working Tax Credit. You can also qualify for Working Tax Credit if you are over 25 and work more htan 30 hours a week.

If your circumstances change, for example your income falls, you may be entitled to more help. Call the Tax Credits helpline on 0845 300 3900 or visit the website for more information.

The Redundancy Service

The Redundancy Service is provided by VT Group on behalf of Jobcentre Plus to help individuals who have been made redundant and left their company within the last 6 months. The support offers allows redundant individuals to:

  • Refresh their existing skills
  • Gain help with job searching
  • Learn new skills
  • Access flexible training
  • Try out new market sectors

The aim of the package is to equip individuals with the employment skills in line with emerging skills shortages and job opportunities, helping individuals to get into more sustainable employment.

For more information on how to access the service contact your local Next Steps centre quoting the Redundancy Service.

Time off to find other work

If you have been continuously employed for more than 2 years by the date your notice expires, you are entitled to time-off during your notice period to look for another job and arrange training if necessary.

  • Amount of time off
  • Entitlement
  • Payment
  • Refusal

Starting a new job before your notice has expired

If you leave your job early before the end of your notice you may lose your redundancy payout.  However, try and negotiate with your employer for early release, most employers are happy to do so.

  • Negotiating with your employer
  • Losing your redundancy pay

Find out more information from the TUC