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Dismissal and benefits
What can a dismissed worker claim
If you have been dismissed from work, you will need to claim either contribution-based or income-based jobseeker’s allowance, and/or housing benefit, and/or council tax benefit.
You will usually not be able to claim income support. This is because you must be available for work. However, you should check whether you or your partner can claim income support as this does not require ‘signing on’ at the jobcentre.
For information about jobseeker’s allowance, see Jobseeker’s allowance (JSA) .
For information about income support, see Income support .
This information explains how dismissal can affect the benefits that you can claim.
If you are a worker who has been dismissed from a job where you were working less than 16 hours a week, the rules are different. You should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Contribution-based jobseeker’s allowance (JSA)
If you were dismissed for misconduct, contribution-based JSA may not be paid for up to 26 weeks. Misconduct means that, in your employer’s opinion, you did something wrong. You can appeal against the 26 week sanction.
Contribution-based JSA is not paid for any week covered by a payment in lieu of notice. For example, if you get four weeks pay in lieu of notice, you will not get contribution-based JSA for those four weeks.
Compensation for unfair dismissal may cover a period in which you have been getting contribution-based JSA. If this happens, the JSA may have to be paid back out of the compensation money. If compensation has already been paid when you claim JSA, it may prevent you receiving it for a period.
Redundancy pay does not affect contribution-based JSA. However, if you get redundancy pay in excess of the statutory amount, you will not get contribution-based JSA for the period covered by the extra payment. If you received holiday pay as part of your final wage, you cannot get contribution-based JSA for up to four weeks after your job ends.
The rules about contribution-based jobseeker’s allowance and payments at the end of a job are complicated. You should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Income-based jobseeker’s allowance (JSA)
If you are dismissed for misconduct, your income-based JSA may not be paid for up to 26 weeks. This is called a sanction. You can appeal against the sanction, or may be able to claim a hardship payment.
Pay in lieu of notice is treated as earnings. Holiday pay in the first four weeks after leaving work counts as earnings when working out entitlement to income-based JSA. After the first four weeks it is treated as capital. You will not be entitled to any JSA for the weeks covered by payments which are treated as earnings.
Redundancy pay almost always counts as capital when working out entitlement to income-based JSA. However, redundancy pay in excess of the statutory amount can prevent you getting any JSA for a period. If you get redundancy payments periodically, these count as income, but they are very rare.
Compensation for unfair dismissal may cover a period in which you have been getting income-based JSA. If this happens, the JSA may have to be paid back out of compensation money. If compensation has already been paid when you claim JSA, it may prevent you receiving it for a period.
The rules about income-based jobseeker’s allowance and payments at the end of a job are very complicated. You should consult an experienced adviser, for example, a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
 Housing benefit and council tax benefit
When working out entitlement to housing benefit and (in England, Wales and Scotland only), council tax benefit, redundancy pay is usually treated as capital. Other payments (for example, holiday pay) are usually disregarded unless you are already getting housing benefit and council tax benefit when you are dismissed.
For information about housing benefit, see Housing benefit .
In England, Wales and Scotland only, for information about council tax benefit, see Council tax benefit and second adult rebate .
If you want to know the amount of housing benefit and/or, in England Wales and Scotland only, council tax benefit you can receive, you should consult an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB .
For information, see Housing benefit and, in England, Wales and Scotland only, Council tax benefit and second adult rebate .
 Insolvency payments and benefits
If you are dismissed because your employer is insolvent, then you may get a payment from the Department for Trade and Industry’s redundancy payments service (RPS) to cover wages owed, pay in lieu of notice, and so on. If you also claim JSA, you will not be paid any benefit for the weeks covered by the insolvency payment. Or, if you have already had some JSA when the insolvency payment is due to be paid, the benefit will be deducted from the insolvency payment. If you had an insolvency payment and it comes to the end of the period in which you are entitled to JSA, you will have extra weeks added to your entitlement period to make up for the weeks of benefit you lost at the beginning of your claim.
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