Am I Entitled To Any Redundancy Money & How Much?
Redundancy payments are compensation because your job no longer exists within the company. You may have rights to redundancy pay from your employer and there are two types of redundancy pay:
This is redundancy pay, which is set out by law.
This is dependent on your company and details of this if offered will be in your contract of employment issued when staring employment with your company.
So the first thing you need to know is you cannot be paid less redundancy than the amount of the statutory redundancy pat you are entitled to. If your contractual redundancy scheme gives you less money than the statutory amount, you must still get the statutory amount.
Who has the right to statutory redundancy pay?
Only some people are entitled to this. You will be entitled if:
- You’re an employee, and
- You’ve worked for your current employer for at least two calendar years since school leave age.
If you’re self employed, freelancer or a short-term casual worker on an independent contract for example, you are unlikely to be an employee and you wont be entitled to statutory redundancy pay.
Some agency workers and freelance workers count as employees but not all of them.
If you’re on a fixed term contract, you may be entitled to statutory redundancy pay. Your contract needs to be at least two years long or more. This also applies if you have shorter contracts, which follow on from each other, as long as the total period of time is at least two years. If the contract runs out and is not renewed because your job is no longer required. You will be entitled to statutory redundancy pay.
There are some workers who are never entitled to statutory redundancy pay.
Even if you’re note entitled to statutory redundancy pay, you may be able to get contractual redundancy pay. Must public employees, including civil servants, have a right to contractual redundancy pay, which gives them similar or better rights. You should check your contract of employment to find out more.
How much will I get for statutory redundancy pay?
You’ll normally be entitled to statutory redundancy pay if you’re an employee and you’ve been working for your current employer for two or more years.
- Half a weeks pay for each full year you were under 22.
- One week’s pay for each full year you were 22 or older, but under 41.
- One and a half weeks pay for each full year you were 41 or older.
Your length of service will be capped at 20 years and weekly pay is capped at £479.00. The maximum amount of statutory redundancy pay is £14.370.00
Do I need to pay tax on my redundancy money?
No, not on statutory redundancy pay.
You will pay tax on a redundancy payment if it is more than £30,000 for which you may need tax advice.
If your payment is less than this, but more than the statutory amount, you may have to pay tax depending on the circumstances. This is because some payments you are given when you are made redundant, aren’t treated as redundancy payments.
How and when will I get paid?
Your employer is responsible for making a statutory redundancy payment to you on, or soon after the date of your employment ends. You don’t need to make a claim for your redundancy statutory payment unless your employer fails to pay you or claims that you don’t have a right to the payment.
When your employer makes the redundancy payment, they must give you a written statement saying how they have calculated the amount.
How to claim redundancy pay if my employer has stopped trading?
If your employer has gone out of business (is insolvent) and an administrator or liquidator has been appointed, they should give you form RP1. If they haven't, you should contact them at their registered office. The liquidator will then claim it from the National Insurance Fund.
If you don't know who the liquidator is, you can call the Redundancy Payments Office (RPO) Helpline on 0845 145 0004, or, in Northern Ireland, the Redundancy Payments Service Helpline on 0800 585 811.They will be able to advise you on what to do and may be able to send you a copy of the form.
If your employer has stopped trading but is not insolvent, write to your employer claiming your statutory redundancy pay. If your employer doesn't make the payment, you can make a claim to an employment tribunal. You must do this within six months of the date your employment ends.
If an employment tribunal decides that you have the right to statutory redundancy pay but your employer still doesn't pay it, you can make an application to the National Insurance Fund for your redundancy payment.
Please note the information provided is based on UK law as of 28th June 2016. This data may be out dated and you should always consult UK law's for current advice. Hashtag CV shall not be held liable for any information detailed on this page. If you require more up to date information, please visit www.gov.uk.