When you are made redundant, there are payments to which you are entitled.

Your employer should pay:

• any wages you are owed
• holiday pay (for holidays you are entitled to but haven’t taken)
• in lieu of notice if you have not been given the proper period of notice
• redundancy payment.

Your redundancy package is likely to include financial compensation. At this point, it may be tempting to go out and blow the lot. The sensible short-term policy would be to put it into a high-interest account in the building society or bank, dream a little, then after some distance is put between your turbulent emotions and your money — take rational action.

Redundancy payments under the statutory scheme are not taxable. An employee may be entitled to a redundancy payment if they were dismissed from their job and:

• have been continuously employed in the job for at least two years since the age of 18
• the dismissal was for redundancy; and
• they were not covered by any of a number of specific

exclusions, eg:

• people 65 and over; or
• a lower age if the employer has a lower retirement age;
• people working outside Great Britain; and
• people who unreasonably refuse an offer of suitable alternative work.

If the employer does not make the redundancy payment at the time of dismissal, you must claim the payment in writing within six months of the date of dismissal. The amount of a redundancy payment is a multiple of your normal weekly gross pay, depending on your age and length of continuous employment with the employer.

Look for DTI employment legislation booklet PL808 on ‘Redundancy Payments’.

If you require further guidance about statutory redundancy entitlement, consult a Citizens Advice Bureau or seek independent legal advice. Any dispute about entitlement should be referred to an employment tribunal. Redundancy booklets can be ordered from:

DTI Publications
Tel: 020 7215 6024
Website.dti.gov.uk/publications

If you have lost your job and your former employer owes you money which the company cannot pay because of insolvency, the Employment Department may be able to settle the debts, or part of them. Self-employed people do not qualify. The main debts you can claim include: any wages you are owed, holiday pay and compensation for financial loss you may have suffered by not being given a proper period of notice or pay in lieu of notice.

Checkpoints for your redundancy package

• Can you retain your company car for a while?
• Could you purchase your company car at a favourable rate?
• Can you negotiate the continuation of life or health insurance cover for a short time after you leave?
• Is there payment for career counselling or outplacement assistance?
• Are you owed holiday pay?
• What happens to your pension?

Using your redundancy money

Make your money work for you:

• pay off any hire purchase
• don’t rush into buying a business
• don’t take the first person’s advice that you speak to
• don’t be speculative
• check to see if your loan agreement has any insurance cover against unemployment
• put your money into a high interest account until you have had the best advice.

Organising your personal budget

• keep outgoings minimal
• look at your expenditure
• you may be able to take a private pension from age 50
• your work pension is likely to be frozen
• keep your life insurance going.

Using the benefit system

Your redundancy payment does not affect your entitlement to unemployment benefit. For advice and information on benefits, talk to a claimant adviser at the Jobcentre.

Facts about Job Seekers Allowance (JSA)

JSA is paid if you are under 65 (for men) or under 60 (for women) and not working (but are capable, available and actively seeking work), or working on average less than 16 hours a week. Further facts include:

• If you have been paying NI contributions you may be able to get contribution-based JSA. If you are on a low income you may get income-based JSA, even if you have not paid NI contributions. Income-based JSA is based on how much the law says you need to live on.
• Redundancy payments and other money you get when a job ends may affect JSA and the date you can get JSA from.
• If you take voluntary early retirement you may not get JSA straight away. If you get an occupational or personal pension, it may reduce your JSA.
• Men aged 60 to 64 who do not want to sign on at the Jobcentre every 2 weeks can claim income support instead.
• You cannot usually get JSA if you are studying full-time. If you are one of a couple that are both full-time students and one of you is responsible for a child, you may be able to get JSA during the summer vacation. For more information about how studying affects JSA and other benefits, see leaflet GL19: School-leavers and students. If you are studying part-time, but are still available for and actively seeking work, you may be able to get JSA. This will also depend on the number of hours you study and your other circumstances. If you are aged 25 or over and have been unemployed for 2 years or more, you may be able to do a full-time employment-related course for up to a year and still get JSA. You may be able to do an Open University course and still get JSA.

Other useful benefits include:

• Back to Work Bonus
• Business Start Up
• Budgeting Loans
• Council Tax Benefit
• Employment on Trial
• Income Support
• Job Grant
• Mortgage Interest Run-On
• New Deal
• Working Families’ Tax Credit

Checkpoints

• Doing voluntary work should not affect your benefit as long as you are still actively searching for work.
• If you have a mortgage, see your building society or bank to discuss rescheduling your repayments.

YOUR LOW COST OR NO COST LIFESTYLE

DEFINING YOUR NEEDS AND WANTS

It is easier to look at what others want and need instead of looking inside ourselves. We are often taught to ignore our own needs and focus on others. Society and conditioning contribute to what we believe we must have in order to be happy. Of course we need a roof over our heads and food in our mouths, but there are many appendages we believe we cannot survive without.

Needs are associated with what humans require for their physical survival. According to the psychologist Abraham Maslow, there are five levels of human needs:

• Physiological needs — food, water, sleep, oxygen
• Safety needs — shelter, stable environment, income
• Belongingness — support from others, a sense of belonging
• Esteem needs — self-respect, skill, status, a sense of accomplishment
• Self actualisation — fulfilment of your potential in life, self determination.

Projects

• 1.Make two separate lists — the ten things you most want to do and the ten things you most often do. Compare.
• 2.Spend a whole day paying attention to how many times you say ‘I want’ or ‘I need’. What do you want and need?
• 3.Take ten blank postcards and write on each card ‘What I need is —’ and complete the phrase without judgement. Take another ten postcards and write on each card ‘What I want is —’ and complete the phrase without judgement. Prioritise each section. What do they tell you?

REDEFINING YOUR MATERIAL VALUES

Most of us seek attachment to the external world via money, our home, a car and other possessions. We believe that our survival depends on us having these things. We believe that our possessions are a gauge of who we are and whether we are accepted by others.

Some of us are ruled by what we see as the importance of money: ‘others will like me if I have lots of money’ or ‘If I had more money, I could do more things/buy more things and then I would be happy’.

• We are fearful about money. If we don’t have enough, we are afraid that we won’t have what we need. If we are rich, we are afraid of losing it. We may have lots of money but feel guilty about it or we may have less and feel resentful about it. In the area of work and money you may have to be willing to take risks. If you do only what you think you should in order to earn a living, then you won’t be listening to your inner voice that tells you what you really need to do. Our hopes and fears around money tend to come from our conditioning as seen through the eyes of our first family as well as what we as a society tend to view as the ‘norm’ e.g. owning a car (or two), and an annual holiday abroad.

Self-assessment

• 1.Reflect on the things you believe you need to have in your life and list ten things that you feel are indispensible to your well-being.
• 2.Tick those needs you feel are not being met right now.
• 3.List ten things you most want. Brainstorm without judgement.
• 4.Tick those wants that you feel you deserve. Compare how deserving you feel with how difficult you think your wants are to obtain.
• 5.Compare the two lists of wants and needs. On a separate sheet, put your two lists in descending order of importance. Note any changes.

In summary, if you organise sensible budgeting, money should be no problem. You may have to tighten the belt a little and not indulge in luxuries as you used to. But the good times will come back with patience and forethought. You may see your redundancy money as a safety net, you may use it to pay off some debt or it might give you the opportunity to make changes you’ve always wanted — and change is what redundancy is offering you.