Advice NI produce ‘Universal Credit & redundancy payments’ briefing paper: fears grow about job loss spike in NI as ‘furlough’ scheme winds down

It has been estimated that approximately 200,000 local workers in NI are on the Government's job retention (furlough) scheme, which covers 80% of wages up to £2,500 a month. 
Therefore fears are growing about a huge job loss spike in NI as this ‘furlough’ scheme winds down.
 
Advice NI has produced a ‘Universal Credit & redundancy’ Briefing Paper to assist employees and advisers where a redundancy situation arises. 

Speaking about the Briefing Paper, Advice NI’s Head of Policy, Kevin Higgins explained:
 
“There is no doubt that there are difficult times ahead, and sadly this will involve significant job losses as the economy contracts due to the current coronavirus crisis.
 
“In general, when someone is made redundant the social security benefit that will most often be claimed is Universal Credit. There are special rules around how redundancy payments should be treated. People need to be aware that redundancy payments should be treated as capital and ignored as earnings for Universal Credit (UC). If a redundancy payment is not treated correctly for example if it isn’t laid out clearly in the Real Time Information sent by HMRC to Universal Credit, and ends up being treated as earnings, this can have significant implications and lead to a significant reduction in any Universal Credit award.”
 
END
 
Notes
  1. For further information contact Kevin Higgins, Head of Policy, Advice NI on 02890 645919
  2. Click the link for a full copy of the Briefing Paper - Advice NI Universal Credit and Redundancy Briefing paper June 2020
  3. Whether paid as a lump sum or over a given period, redundancy payments count as capital for UC purposes and not as earnings. So if a redundancy payment takes a claimant’s savings over £16,000, they would no longer be entitled to UC from the beginning of the monthly assessment period in which they receive this payment. If it takes their savings to between £6,000 and £16,000 then the amount of UC they are entitled to will reduce due to the ‘tariff income’ that these savings are deemed to generate. If your capital is below £6,000, universal credit is unaffected.
  4. Tariff income (between £6,000 and £16,000) is calculated by assuming a monthly income of £4.35 for each £250 above £6,000.
  5. Other ‘cessation of employment payments, for example holiday pay and pay in lieu of notice count as earnings under UC rules.
  6. Advice NI is the umbrella body for the Independent Advice Network in Northern Ireland and its members dealt with 404,594 enquiries in 2018/19, the majority being social security benefits related.
  7. To find out more about the work of the Independent Advice Network or to obtain copies of the various publications produced by Advice NI, please contact us on 028 90 645919, email comms@adviceni.net or visit our www.adviceni.net