State Entitlements You may be eligible for a range of state benefits if you have been made redundant.
State Entitlements The main benefit you may be able to claim while out of work is jobseeker s allowance. But, if your income is low, you may be able to claim a range of other benefits as well, such as council tax benefit and housing benefit. There are also special schemes to help homeowners facing problems meeting their mortgage payments for details, see the Your Home section of this handbook. If you have been claiming tax credits, you will need to report the change in your circumstances and the amount you get is likely to change it may go up or down depending on your circumstances. National insurance credits The amount of state retirement pension you eventually get (and also state bereavement benefits) depends on your record of national insurance contributions. Usually you are paying contributions while you are working. In some situations, for example while unemployed, you are credited as if you had paid contributions. You get these credits automatically if you are unemployed and actively seeking work while claiming jobseeker s allowance. If you are an unemployed man who has reached a qualifying age (set equal to women s state pension age which is currently just over 60 but gradually increasing to 65 by April 2020), you automatically get national insurance credits without having to seek work or claim benefits. You can get further information about all state benefits and how to claim them by visiting the DirectGov website (see Useful Contacts). Getting advice The UK benefit system is complicated, so this handbook can give only an outline of what you might be able to claim. For more information and guidance based on your own personal situation, contact Jobcentre Plus or, in Northern Ireland, your local Jobs and Benefits Office or Social Security Office, or a specialist benefits adviser (see Useful Contacts).
Out-of-work benefits Jobseeker s allowance (JSA) is the main benefit for people who are out of work. To qualify, you must be under state pension age and available for, and actively seeking, work. You will not count as available for work if you are studying full-time. If you are on short-time work (see Job Worries) or laid-off, you are treated for a maximum of 13 weeks as if you are available for work. There are two types of JSA: contribution-based and income-based (see below). Type of state benefit There are broadly two types of benefit: Contribution-based (non-means-tested). You get these if you have paid enough national insurance contributions while working (or been credited with contributions, for example, while on maternity leave). You are entitled to these benefits regardless of your household savings, but some types of income such as pension payments or earnings from part-time work may affect the amount you get. Income-based (means-tested). Your eligibility for these depends on your household income and savings being low and not your national insurance contribution record. Contribution-based JSA You will normally be able to claim this if you have been paying national insurance contributions as an employee for the last two complete tax years. (A tax year runs from 6 April one year to 5 April of the next). Contribution-based JSA is paid for up to six months and is not affected by your household savings. In 2010-11, JSA is paid at a flat rate of 65.45 a week ( 51.85 a week if you are under 25). The amount of JSA you get is reduced by any earnings you have in excess of 5 a week and any occupational or personal pension of more than 50 a week. Other income for example interest from savings does not affect the amount of JSA you get. The earnings of your partner, if you have one, do not affect your contributionbased JSA. If your partner is also unemployed, they may be able to make their own claim for contribution-based JSA.
Income-based JSA This is a means-tested benefit, based on your household rather than individual circumstances. This means that income-based JSA is affected by the income and savings of your partner, if applicable, as well as you. One person makes a claim for the whole household. If you have a partner who works this will affect how much you get. If your partner works 24 hours or more a week, you are unlikely to qualify for income-based JSA. You may get income-based JSA if you have not paid enough national insurance contributions to be entitled to contribution-based JSA or if your six-months entitlement to it has come to an end. Income based JSA is payable for as long as you satisfy the entitlement conditions. The amount you get depends on your household s deemed income needs (called an applicable amount ) less any income you have. Although savings are not taken into account directly, you are treated as receiving income from them. In 2010-11, savings of 16,000 or more disqualify you from getting income-based JSA at all. Otherwise, the first 6,000 of your household savings are disregarded. Savings between 6,000 and 16,000 are deemed to provide you with income of 1 a week for each 250 of savings see table. In 2010-11, the applicable amount for single people aged 25 is 65.45 a week and for couples, both aged 18 or over, 102.75 a week. Examples of the income you are deemed to get from your savings for income-based JSA purposes If you have savings of: You are treated as having this much weekly income from them: 6,000 or less 0 7,000 4 7,100 5 10,000 16 16,000 or more Not applicable you cannot get income-based JSA
Working and claiming JSA Provided you are still available for work and seeking work, you may work under 16 hours a week while claiming either contribution-based or income-based JSA. Whatever you earn over 5 reduces the JSA you get. For example, if you have a part-time job and earn 25 a week, your contribution-based JSA would be reduced to 64.30 ( 25 5) = 44.30 a week. If your part-time earnings are high enough, your JSA may be reduced to zero but you still remain technically eligible and your JSA can increase when your earnings fall or stop. If you take on work for 16 or more hours a week, you must tell your local Jobcentre Plus and your JSA will stop. However, if this work finishes, provided there has been no change in your circumstances and you are returning to the same benefits within 26 weeks of your previous entitlement ending, you can reclaim by a simpler, shorter method. This is either by telephone or a shorter claim form, which enables you to reclaim your JSA and other benefits, such as housing benefit and council tax benefit. Benefits to help with housing costs The benefits described on this page are all means-tested. Help with rent housing benefit If you live in private rented housing the full rate of housing benefit is currently based on average rents for homes in your area. From April 2011, it will be based on the cheapest three-tenths of rents and capped according to the number of bedrooms you have. You may get less than the full rate depending on your income and savings. You have to make up the difference yourself or negotiate a rent reduction with your landlord. If you rent from a housing association or council, full housing benefit will meet your total rent bill. But you may get less, depending on your income and savings. Housing benefit only covers the cost of accommodation and any service charges, such as for lifts and communal play areas. So if your rent includes heating, lighting and water bills you will not get housing benefit for these. From April 2013, your housing benefit will be restricted if your home is considered larger than you need and cut by 10 per cent if you have been on jobseeker s allowance for 12 months or more. Council tax benefit Full council tax benefit meets your whole council tax bill. If you do not qualify for the full amount, you may still get benefit to meet part of your bill.
Claiming housing benefit and/or council tax benefit If you qualify for income-based JSA, you will automatically also qualify for full council tax benefit and, if applicable, housing benefit. You can make a combined claim through Jobcentre Plus (or Jobs and Benefits Office in Northern Ireland). Jobcentre Plus can also pass on your details so that you do not have to make a separate claim for tax credits. If you are not getting incomebased JSA, but your income is low, you may still qualify for council tax benefit and/or housing benefit and can claim through your local authority (see phone book). Your local authority will use a means test very similar to that used for incomebased JSA to decide whether your household is eligible and for how much. You can continue to claim council tax benefit and housing benefit while working, if your income and savings are low enough. Help with mortgage costs Homeowners on certain meanstested benefits, including incomebased JSA, may be able to get help with their mortgage interest payments, called Support for Mortgage Interest (SMI). However, SMI is not paid for the first 13 weeks of your claim check whether you have any mortgage payment protection insurance to cover this gap (see the Managing Money section of this handbook). SMI covers only mortgage interest. It will not meet your capital repayments, any insurance you took out with your loan or any mortgage arrears. You can normally claim for mortgage interest payments on up to 200,000 of your mortgage. If you are claiming JSA, SMI is paid for a maximum of two years. There are other government initiatives to help you pay your mortgage if you lose your job. For more details see the Your Home section of this handbook. Benefits to help with other costs If you are claiming income-based JSA, you may be eligible for these other means-tested benefits. Social Fund This can help you by making loans and grants to cover emergency expenses and large one-off payments. However, some of this help comes from a cash-limited fund, which means that even if you have a valid claim, there will not necessarily be any money available.
Social Fund help can include: Maternity grant. You can get 500 to help with the cost of clothes and equipment needed for a new baby. From April 2011, this is restricted to your first child. Cold weather payments. These aim to help you meet extra fuel costs during spells of very cold weather. If the temperature in the area where you live falls to 0 degrees centigrade or lower for seven consecutive days you will automatically be sent 25 (in winter 2010-11) for this period. Funeral costs. If you are responsible for paying for a funeral you may get money to pay for necessary costs such as burial or cremation, plus up to 700 for all other expenses. Budgeting loan. This is an interest-free loan of a lump sum to pay for essentials such as furniture and household equipment, clothing and footwear. You must have been receiving a means-tested benefit, such income-based JSA for at least six months to qualify. Crisis loan. This is an interestfree loan if you need money in a hurry for an emergency and have no other way of getting cash. For further information and to claim any of these grants and loans, contact Jobcentre Plus (or the Jobs and Benefits Office in Northern Ireland) or a benefits adviser see Useful Contacts. Free school meals, school clothing grants and bus passes If you are on a low income and receiving certain benefits you may be able to get help with the cost of school meals, school uniform and travel to school for your children. Contact your local education authority (see phone book) to find out more. Healthy Start free vitamins and vouchers for milk, fruit and vegetables Expectant mothers and families with children under four are entitled to free vitamins and vouchers for milk, fruit and vegetables if they are on certain benefits. Your midwife or doctor can tell you more about this. NHS costs If you are on a low income and receiving certain benefits you may be entitled to free prescriptions, dental treatment, eye tests and vouchers for glasses. You can get a form for these from Jobcentre Plus. Prescriptions are free in Wales and Northern Ireland. This is due to apply also from 2011 in Scotland.
Tax credits Tax credits are benefits for households that have children (child tax credit and the childcare element of working tax credit) and/or households in work but on a low income (working tax credit). They are means-tested so that the lower your income the more you are likely to get. In 2010-11, families with incomes over 50,000 can qualify for at least some child tax credit but eligibility is being cut back from April 2011. If you have been getting tax credits, you (or your partner if you have one and they are the main claimant) must tell the Tax Credits Office (see Useful Contacts) that you are no longer working. This may affect your eligibility for working tax credit see table. However, your reduced household income may mean you can claim extra. You can get a rough idea of how much your tax credits might change by using the tax credit tables on the HM Revenue & Customs website (see Useful Contacts). From April 2011, eligibility for tax credits is being restricted. They will not normally be available for families with an income of more than 41,329 and will be cut back further in 2012-13. Also from April 2011, extra credit to help over-50s returning to work will be abolished. These are two of several changes that may reduce your eligibility or the amount of tax credits you can claim. Example John and Shivani have two children. At the start of 2010-11, they were both working full-time and had a joint income before tax of 825 a week and had childcare costs of 120 a week. Their income was too high to qualify for working tax credit but they received 10 a week in child tax credit. When John was made redundant, the household income fell to 288 a week, including 65.45 that John could claim in contribution-based JSA. Although the couple were not entitled to help with childcare costs (because they were not both working at least 16 hours a week), they qualified for 24 a week in working tax credit because of the family s low earnings and their child tax credit rose to 99 a week.
Eligibility for tax credits Type of tax credit What it does Main groups who can claim it [1] Working tax credit Working tax credit childcare element Child tax credit Tops up low earnings from work Helps with cost of childcare so you can go to work Helps with cost of raising children Age 16 or over, lone parent or couple with child(ren). Claimant or partner working at least 16 hours a week. Aged 25 or over, single person or couple without children. Claimant or partner working at least 30 hours a week. Aged 60 or over working at least 16 hours a week. Aged 50 or over, returning to work after at least six months claiming means-tested state benefits. [2] Lone parent working at least 16 hours a week. Couple with children, both working at least 16 hours a week. Nine out of ten families with children in 2010-11, but fewer from April 2011 onwards. [1] People with disabilities may qualify under different rules. The rules are complex and only an outline is given here. [2] This entitlement is due to be abolished from April 2011.
What happens at Jobcentre Plus As soon as you stop work you should contact Jobcentre Plus or Jobs and Benefits Office in Northern Ireland (see Useful Contacts). This is the government agency which helps people find work and handles benefit claims. If you phone, expect the call to take about 40 minutes. During your call you will be asked to provide information including: Your national insurance number Your rent or mortgage Your past employer Any income and savings you have The person you speak to will tell you what will happen next with your claim. If you are claiming JSA, you will need to attend an interview at the Jobcentre. This is called a new jobseeker interview. A personal adviser will help you draw up a jobseeker s agreement. This sets out the steps you agree to take to find work. You will have to confirm your benefits claim in person every two weeks, and your situation will be reviewed at regular interviews. You will have a longer review if you have been getting benefit for 13 weeks. As well as providing help and advice on claiming any benefits you may be entitled to, your personal adviser can also offer support in helping you find a new job and can tell you about training opportunities. State help finding and starting a job Your local Jobcentre Plus will give you help and advice on getting back to work. This includes: Job vacancies. Jobcentre Plus has the UK s largest database of job vacancies. Help and advice on writing a CV, applying for jobs, filling in application forms and preparing for interviews. Your Jobcentre Plus (or Jobs and Benefits Office in Northern Ireland) personal adviser can also talk to you about the extra help that may be available to you if you need help with your reading, maths or English, or if you need help looking for professional or executive jobs.
Getting a job When you start a new job, this will usually affect the state benefits you can claim, but you may still be entitled to: Help with your rent or mortgage interest and council tax benefit. If you have been claiming income-based jobseeker s allowance (or certain other means-tested benefits) for at least 26 weeks before going back to work, these benefits can carry on for up to four weeks, or longer if your pay is low. Tax credits. The amount you claim will not necessarily fall during your first year back at work. You may get extra if you can now claim working tax credit which aims to top up low pay. For an estimate of the benefits you can get, contact a benefits adviser (see Useful Contacts) or use the online tool at www.direct.gov.uk/benefitsadviser
If you are still unemployed after six months, Jobcentre Plus (Jobs and Benefits Office in Northern Ireland) will ask you to attend a restart interview. As well as looking at what you are doing to find work and whether Jobcentre Plus is giving you all the help you need, your adviser will be able to tell you about the extra help that is available. This can include: Help to set up your own business or become self-employed. Training that is available if you need to improve your skills or develop new ones to increase your chances of getting a job. Voluntary work you could do to help improve your skills and experience so that you have more chance of finding a job. Access to jobs where an employer receives a 1,000 recruitment subsidy and in-work training support in some areas. Jobcentre Plus may also be able to arrange a work trial for you. This is where you get to try out a job to see if you are the right person for the vacancy. Work trials can be for up to 30 working days and your benefits continue throughout this period. If the trial doesn t work out and you are not offered a job, this won t affect your benefits. Jobcentre Plus can also organise financial assistance to help with the costs of getting a job.