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Benefits and tax credits when you’ve lost your job

Sharon McDougall - Updated - 1st May 2024 - 3 minutes to read

If you’ve lost your job, state benefits and tax credits can provide vital financial support to see you through this tough time and help you avoid taking on too much debt while you look for more work.

As far as your old employment is concerned, it’s important that you check your final wage slip to make sure you’ve received the correct pay, and that you’ve been paid for any outstanding holidays, or bonuses and commissions that you’ve earned.

But what benefits and tax credits are available to you in Scotland when you’ve lost your job, and how do you apply?

Can I claim Jobseeker’s Allowance/Universal Credit?

Universal Credit has replaced some state benefits, including income-based Jobseeker’s Allowance (JSA), Housing Benefit, Income Support, Working Tax Credit, and income-related Employment and Support Allowance (ESA).

This means if you’re claiming any of these individual benefits already, you won’t be able to claim Universal Credit. You may be able to claim a new style of Jobseeker’s Allowance, however, alongside or instead of Universal Credit.

Jobseeker’s Allowance

If you’re actively looking for work and have made National Insurance Contributions in the past, you could be eligible to claim a new style contribution-based Jobseeker’s Allowance for up to six months. Unlike Universal Credit, eligibility isn’t affected if you have savings, and payments are made into your bank account every fortnight.

Universal Credit

Universal Credit is a payment to the household rather than to you individually, and may be paid once or twice a month. You could be eligible if you have less than £16,000 in savings, but if you live with a partner their income and savings are also taken into account.

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Am I eligible for Council tax benefits?

Scotland’s Council Tax Reduction scheme (CTR) reduces your liability for council tax when you’re on a low income or have lost your job. Each local authority in Scotland applies its own scheme, so you would need to contact your local council to find out whether your council tax payments could be reduced, and by how much.

Can I use Housing Benefit?

If you rent your home from your local council or a housing association, Housing Benefit can help you keep up with your rent payments and avoid going into arrears. It’s slightly different if you’re a private tenant – local housing allowance (LHA) covers rent in this case, and in some instances, service charges.

How do Tax credits work?

If you’re aged over 16 and have lost your job, Working Tax Credits and Child Tax Credits can help increase your income. Working Tax Credits are available for people working more than 16 hours per week, so if you have another job alongside the one you lost you may be able to make a claim. If you have one or more children under 16, you could also be eligible for Child Tax Credit.

For more information on claiming benefits and tax credits following the loss of a job, please contact one of our experts at Scotland Debt Solutions. We work from five offices around Scotland, and can offer a free same-day meeting to discuss your situation.

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Sharon McDougall


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