Severance pay following redundancy....

R.O.S.S.I · 23 Mar 2017 at 11:22

Hi all, was very recently made redundant and offered a severance package of 3 months salary which was generous as they didn't have to give me much more than a couple of weeks I believe.

Anyway, i've just got the final payslip calculation and they are paying me it all in one go as a lump sum (tomorrow I think). Its a few hundred less than what my actual 3 x separate monthly wages would have been and it looks as though this is due to my student loan payment having jumped up to more than double to what they would normally be.

Can I do anything to reclaim some of that back as its a few hundred more than I would have paid normally? Everything on my pay slip checks out but its just annoying as I could have really done with that extra. Or will I have to chalk it up to a bad do and just think of it as a boost to paying off my student loan (lol)?

Maccy · 23 Mar 2017 at 11:29

R.O.S.S.I said:
Or will I have to chalk it up to a bad do and just think of it as a boost to paying off my student loan (lol)?

I would suggest that to be honest! Although the mrs got paid her commission in January (for the whole year!) so had a lot of extra tax and student loan deductions, come February her tax and student loan deductions had gone down compared to what was usually taken, so things may work themselves out when you move on to your next role?

dirtychinchilla · 23 Mar 2017 at 11:38

Your student loan payment is ALWAYS 9% of your income, unless you're beneath the payment threshold, so I suspect you don't have any room to maneuver.

Hades · 23 Mar 2017 at 11:53

I'm not an expert but my understanding is that student loan repayments are due on the redundancy payment. However tax and NI are exempt for up to the first £30k. So it's worth checking whether you're being taxed too.

tom_e · 23 Mar 2017 at 11:58

My student loan payment doubled when I got my bonus at the end of last year, nothing you can do unfortunately.

R.O.S.S.I · 23 Mar 2017 at 11:59

Bah, no worries, thought it was worth an ask either way. Cheers guys.

BigT · 23 Mar 2017 at 12:08

Check whether your payroll provider has looked at your larger income this month and deducted tax and NI as if you you're paid 12x what you got this month. It probably would equate to you going through tax band thresholds which may be a contributory factor. If that's the case then you'll be able to claim it back in next year's tax code or ask HMRC for a refund at the end of the tax year. Often this is not clear if there some portion of a PILON or tax free ex-gratia payment when redundancies are involved.