Being unemployed makes you eligible for a host of state benefits that can help you with managing your living expenses as well as keeping up with National Insurance contributions. Through this article, we will discuss whether someone can register as unemployed and yet not claim state benefits. For an overall view of the topic, we will explore other circumstances that bear an impact on one’s finances while being unemployed. Additionally, we will also review the state benefits one can claim while being unemployed.

Can I Register As Unemployed Without Claiming Benefits?

Yes, you can register as being unemployed with HMRC without claiming benefits. However, without having any income, you will not be able to make National Insurance contributions and your state pension will be affected. 

Certain individuals who intend not to claim benefits also choose not to get registered as unemployed which is not advisable as they are unable to claim National Insurance credits.

Should you choose to claim benefits while being unemployed, you may be able to claim the following:

  • New Style Jobseeker’s Allowance
  • New Style Employment and Support Allowance
  • Universal Credit
  • Pension Credit

However, there are certain conditions that will apply for each benefit to be claimed. For instance, in the case of JSA, you should be under State Pension age, unemployed or working for less than 16 hours per week. Additionally, you should have made sufficient National Insurance contributions over the recent 2 to 3 years.

In the case of New Style Employment and Support Allowance, all of the above conditions will remain applicable; additionally, the claimant must be able to provide proof of a disability or health condition that has an impact on the number of hours that they are able to work. 

In order to claim Universal Credit, you or your partner are required to be under State Pension age and have saving equal to less than £16,000.

For Pension Credit, both you and your partner should have reached State Pension age. Otherwise one of you should be claiming Housing Benefit for people above the State Pension age.

In addition to benefits claim, you may also be eligible for an income tax refund after your resignation and until you are able to find another job.

Do I Pay National Insurance If I Am Unemployed And Not Claiming Benefits?

If you do not pay National Insurance while being unemployed and not claiming benefits, it will lead to gaps in your National Insurance contribution. These gaps mean that you will not have sufficient National Insurance contributions to claim the following:

  • full state pension
  • certain benefits that you may qualify for 

In order to avoid these gaps, you may choose to make voluntary contributions. Other reasons may include any of the following: 

  • individuals are close to the State Pension age and do not have the required number of qualifying years to get the full State Pension
  • individuals are aware that you are unable to achieve the qualifying years that are needed to get the full State Pension during your working years
  • individuals are self-employed but you have low profits due to which you do not have to pay Class 2 contributions
  • individuals live outside the UK, but you want to qualify for some benefits

How Can I Get A P60 If I Am Unemployed?

If you are unemployed and need access to your P60 form, you can log in to your personal tax account and gain access to the information that you require. You can also print the page that appears on the screen.

If you have forgotten your login details, you can contact HMRC and request the desired information. 

To claim a tax refund using the P60 form, claimants will need to share the following details with HMRC:

  • their earnings in total
  • the amount of income tax that they have paid
  • the amount of income tax that they have paid in excess

Additionally, they must also provide details of their National Insurance number and employer reference number.

Can You Claim Universal Credit If You Quit My Job?

Yes, you can claim Universal Credit if you quit your job voluntarily. However, it is essential that are able to prove a “good reason” for quitting your job if you want to continue receiving your Universal Credit payments without any deductions from the Department for Work and Pension.

You must be able to provide evidence of the reason that you claim for your resignation. If you are unable to claim a “good reason” for leaving your job and it appears to the DWP that you have voluntarily become unemployed, you will possibly face a sanction on your Universal Credit payments. This means that you will be paid a reduced amount of the benefit for a period of three months before you become entitled to the original amount.

In addition to Universal Credit, you may also be able to claim certain income-based state benefits while you are unemployed. You may also be eligible for an income tax refund after your resignation and until you are able to find another job.

Who Is Eligible For Universal Credit?

To qualify for Universal Credit, claimants must be able to fulfil the below eligibility criteria:

  • aged between 18 (in some cases it may be 16 or 17) and state pension age
  • unemployed or on low income
  • between the claimant and their partner, total savings are less than £6,000
  • experiencing high costs for childcare
  • suffering from a disability or health condition
  • caring for someone else

The amount of Universal Credit that an individual receives depends on their personal circumstances and income (if any). For instance, someone who is single and younger than 25 years of age will be eligible for Universal Credit amounting to around £257 per month. Meanwhile, this amount will rise to around £509 for someone who is living with a partner and either one of them or both of them are above the age of 25.

Who Is Eligible For Job Seekers’ Allowance?

Those seeking job seekers allowance must be able to fulfil the following criteria:

  • aged 18 years or above
  • under state pension age
  • currently unemployed or working for less than 16 hours per week
  • previously held a job
  • available for and looking for work
  • have employment rights in the UK
  • previously paid National Insurance (in the recent 2 to 3 years)
  • currently not in full-time education
  • do not have an illness or disability that prevents being employed
  • live in England, Scotland or Wales

Should the above criteria be fulfilled, candidates will be able to claim JSA for 6 months; after which they will be advised by their work coach with regard to employment options.

It must be noted that the claimant’s or their partner’s savings do not disqualify them from receiving JSA.

What Changes Need To Be Reported For Benefits Claim?

Claimants need to inform the local council authorities in case of any of the below listed circumstantial changes to their conditions as they will bear a direct impact on their benefits claim:

  • one’s name or gender
  • finding a new job or ending a previous one
  • different working hours
  • increase or decrease in income
  • an increase or decrease in pension, savings, investments or property
  • salary arrears (this applies to you and your partner)
  • beginning or ending an educational degree, training or apprenticeship
  • home address
  • extended stay out of the UK
  • number of people in the household 
  • marital status
  • physical and mental health conditions
  • extended hospital stay or moving into a care home
  • starting or stopping caring for someone
  • change of medical adviser 
  • increase or decrease in benefits you or anyone else in your household receives
  • your immigration status (in case you are not a British citizen)

What Is Classed As Low Income?

Households in the UK are classified as being on low income if they live on less than 60 per cent of the median net disposable income earned. As per recent data gathered and analysed by the Department for Work and Pensions People in low-income households – GOV.UK a household with a couple having no children would be considered to be in low income if their annual household income is less than £17,100 BHC (before housing costs) and £14,800 AHC (after housing costs). 

According to a DWP report titled Households below average income: an analysis of the income distribution FYE 1995 to FYE 2020 median income for the term 2019-2020 has been taken as £547 per week. This value serves as the basis for measurement of which income bands fall within the median range and which exceed it. 60 per cent of the median income mark falls at £328 during the last fiscal. This means that any household with a combined income of less than £328 is considered to be of low income.

Can I Get Council Tax Reduction On Low Income?

Yes, you can get a council tax reduction on your bill if you are on low income. If an individual is earning 60 per cent below the median income threshold, they become eligible for a council tax reduction on their bill. However, they must contact their local council office to apply for council tax reduction and share relevant details regarding their income and circumstances. The council will then proceed with their application to decide the percentage of discount that will be applicable. 

You may be low on income but if you jointly hold capital with someone, you will be considered as half owner of it. For instance, if someone has joint ownership of an asset or they share joint savings account with someone (other than their partner), they will be considered as half owner of the total amount of saving in that account.

Conclusion:

From the above discussion it has become clear that while it is possible to register as being unemployed without claiming state benefits, most individuals find themselves financially better off when they do claim benefits as they help to meet living costs. However, it is not mandatory to do so even though having an extra income helps in maintaining your NI contributions towards your state pension.

FAQs: Can I Register As Unemployed Without Claiming Benefits?

What can I claim if I’m unemployed?

If you are unemployed, you can claim New Style Jobseeker’s Allowance, New Style Employment and Support Allowance, Universal Credit and Pension Credit.

Can you claim Universal Credit if you quit your job?

Yes, you can claim Universal Credit if you quit your job. You may also claim New Style Jobseeker’s Allowance, New Style Employment and Support Allowance and Pension Credit. Additionally, you can also claim an income tax refund until your find another job. However, it is not essential to be unemployed to claim Universal Credit.

How Many People Are Claiming Out of Work Benefits In The UK?

According to statistics shared by BBC, around 2.6 million people were seeking Job Seeker’s Allowance or Universal Credit in April 2021. It does not mean that all of these claimants are completely out of work; it just happens that the pandemic has led to a rise in many individuals cutting short their working hours by working part-time and that has led to low incomes.

When Do I Tell DWP That I Have A Job?

You should inform the Department for Work and Pensions immediately when you have a job, an increase in pay or any other change in circumstances that affect your eligibility criteria for benefits.

Can you pay NI contributions if not working?

Yes, you can make NI contributions if you are not working. These are termed voluntary contributions.

References:

How do I register as unemployed but do not want to claim Universal Credit — MoneySavingExpert Forum

How to register as unemployed

What Is A P60?.

National-insurance_help-if-you’re-not-working

National-insurance-credits

How-do-i-claim-jsa-when-ive-not-paid-enough-national-insurance-contributions

Being made redundant: finding work, claiming benefits and managing debts – GOV.UK

Jobseeker’s Allowance (JSA) – GOV.UK (www.gov.uk)

Council Tax Support | Claiming Benefits

Universal Credit and you – GOV.UK

Can I claim Universal Credit if I leave my job voluntarily?

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.