Once you know the date that your employment will finish, you can make a claim for JSA or ESA if you meet the criteria. These can be set up more quickly than Universal Credit. Payments can start as soon as you are out of work.
Job Seeker's Allowance (JSA)
'New Style' JSA is based on your past National Insurance (NI) contributions. You may be eligible if you have paid the right NI for 2 out of the last 3 years.
If you have been in work for the last 2 or 3 years, you have probably paid enough NI to qualify for JSA. If you are not eligible, you may still be able to claim other benefits.
You can claim JSA and Universal Credit at the same time. Your JSA payments are taken out of your Universal Credit allowance. It's still worth claiming JSA rather than Universal Credit. There are 2 advantages:
JSA pays Class 1 National Insurance contributions. These could help you claim benefits in the future, for example, if you become ill and cannot work.
If you are part of a couple and your partner is working, you can claim JSA without their income being taken into account.
Universal Credit is a benefit for people who are out of work or on a low income. You may be eligible if you have less than £16,000 in savings. There are some things to watch out for when you apply after you've been made redundant.
Apply at the right time
When you are made redundant, you may receive several payments from your employer in a short time. This can mean you have to wait longer to get Universal Credit.
For Universal Credit, your income is assessed each calendar month. Any income you receive in that assessment period is taken into account.
Payments from your employer could include:
outstanding holiday pay
your final salary payment
'payment in lieu,' when you get an immediate payment to cover your notice period, even if you do not work this
These payments are treated as 'capital' when you apply for Universal Credit. If you have more than £16,000 in capital when you apply, you will not be eligible. If you have more than £6,000, you can apply but your payments will be reduced.
When to apply for Universal Credit
It's important that you wait until your last redundancy or salary payment has been paid into your account before you apply. If you are over the income limit on the day you apply, you will have to wait another month before you receive your first payment.
This can be tricky to work out when you are made redundant. You may be worried about your income and want to apply straight away. If you're not sure when to apply, call the Help to Claim line at Citizens Advice.
Your Working Tax Credit will continue for 4 weeks after you finish your job. But, if you apply for Universal Credit, you will lose your Working Tax Credit immediately. This happens even if your application is not successful.
Call the Help to Claim line to check if you will qualify before you apply. You may be better off if you wait to claim Universal Credit.
You can apply for JSA before you finish work. This will not affect your Working Tax Credit.
When you are made redundant, your income is likely to change. If you are already receiving means-tested benefits, you may be eligible for more support while you have less income. Other benefits may change or stop while you are out of work or if you receive a large redundancy payment.
If your income is reduced, you can use a budget planner to help you stay out of debt.
If you get a Council Tax Reduction or Housing Benefit, you must tell your council when you are made redundant. This is called a 'change of circumstances'.
Council Tax Reduction and Housing Benefit are 'means-tested' benefits. This means the benefit depends on how much income or savings ('means') you have.
If your redundancy payments are low and you have no other income or savings, you may be eligible for more support.
If your redundancy payments give you over £6,000 in savings, you may have to pay more Council Tax. Your Housing Benefit may change or stop.
Report your change in circumstances as soon as possible. You can do this before you finish your employment. You must tell your council within 21 days of finishing your job. You can find their contact details on your Council Tax bill or on their website.