Will I lose out on benefits if I leave my job voluntarily?

When you leave your job, you may need to claim benefits until you find work again. Your eligibility for benefits will depend on your means and on the details of how your job ended. 

You are likely to be penalised by the loss of benefits for around three months if you left your last job voluntarily, unless you can show that you did so for “good reason”. This is called a “sanction”. These sanctions already existed under the old-style Job Seekers Allowance system and have been replicated under Universal Credit. 

Citizens Advice has put together some guidance (‘Deciding whether to resign’) explaining the circumstances in which you might be able to challenge a benefits sanction imposed because you resigned from your job, and how to go about proving to the DWP why you quit. Everything depends on your personal circumstances, but some of the reasons that Citizens Advice suggest might be accepted by the DWP include that you: 

  • took voluntary redundancy 

  • weren't getting the National Minimum Wage 

  • didn't feel safe working in the conditions because they didn't meet health and safety standards 

  • didn't feel safe because you were bullied or harassed 

  • had a zero-hour contract

You will need evidence to show why you left your job. You can find the guidance from Citizens Advice on their website. 
You may qualify for a “hardship payment” from the DWP while sanctioned but if you do, this will have to be repaid through lower future Universal Credit payments. 

Your trade union can give advice if you are making a claim for benefits and think you might face sanctions. If you live in a town or city with an Unemployed Workers' Centre, it is also worth checking out their services. 

Some trade unions have special community-based sections with very low rates, aimed at giving a voice to the unemployed and helping unemployed members back into work. 

The Benefits sections of the GOV.UK website have some useful information for people who haven't claimed benefits before. 

Note that if you are made redundant and your employer is insolvent, you must always claim benefits from the date you lose your job, even if you don’t think you are going to be entitled to them. The Insolvency Service will always deduct from your notice pay the state benefits you could have claimed. If your claim for benefits is rejected, you will need to provide evidence to prove this to the Insolvency Service who will refund the difference.   

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

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