Voluntary Redundancy - 2 Questions

[EuanC]

Is a lump sum paid as voluntary redundancy taxable ??

Would an individual accepting voluntary redundancy be eligible for benefits (e.g. Jobseekers Allowance, Housing Benefit & Council Tax Benefit) ??

Thanks.

[WendyS]

My understanding is that redundancy payments up to a maximum of �30,000 are tax free.

It is probablethat any redundancy payments would put the individual's savings level above the allowance when any state benefits are payable. I'm not sure what level this currently is but there is probably a Benefits telephone helpline which could give specific details.

[buildersmate]

The �30k figure is correct.
You earn the entitlement to JSA based on NI contributions in the relevant year (which if you've been working you would have). However if under the terms of your redundancy, part of it was a payment in lieu of notice then will not be able to claim JSA until the end of that notice period. This is probably one week for each of employment with the company but it may be more than this - refer to your Contract of Employment. All other benefits are means-tested and if you are asking questions about the �30k limit you would seem to have adequate resources to not be entitled to those benefits.

[EuanC]

Thanks peeps.

buildersmate - The redundancy payment would be nowhere near 30K, in fact it would be less than a 3rd of that.

I think that it may be the case that if an individual has over 16K savings (which I wouldn't have anyway) they wouldn't be entitled to benefit - but my main concern is how I would stand with regard to my NI contributions being made etc.

Would I have to pay these myself until I found another job ??

[buildersmate]

If you are registered with the JS for work, irrespective of whether you are entitled to JSA, your NI contributions are credited to you.