A stunned former storeman has been left out of pocket for NOT claiming benefits after he was made redundant following 25 years in the job.

Terry Hudson, 65, has hit out at the government insolvency service after it deducted £780.84 from compensation owed for loss of notice - because he declined to claim Jobseekers' Allowance.

Mr Hudson, of Sussex Gardens, Herne Bay has slammed the move as "shameful and disgusting".

He was made redundant from Hersden-based Blighline in October last year, but ordered to leave the same day he was given notice. The company was in administration.

He said: "I knew I would be getting loss of notice money through the government scheme, so in theory I was getting paid to the end of last year and I was due to reach retirement age in March.

"I went to Herne Bay Job Centre the next day to find out about procedure and was offered Jobseekers' Allowance, but because I was near retirement I declined. They seemed satisfield with this.

"Now I discover I have been stopped £780.84 because I have not claimed benefits I am entitled to. If I had gone on Jobseekers' Allowance I would not have had this money stopped.

"It seems the government has saved £780.84 by not paying me and gained another £780.84 by fining me."

Mr Hudson feels he has been harshly treated after almost 50 years continuous employment after leaving school at 15.

He said: "I’ve paid my taxes, now I’m being punished for not claiming benefits and none of this was explained to me at the Job Centre."

Bay MP Sir Roger Gale, who stepped in to help, was told by Insolvency Service policy advisor Jessica Bradbury that calculation for loss of notice compensation took into account any income that had been, or could have been, received in the notice of payment.

This included state benefits if an employee was unable to find new employment.

She said: "I am sorry if Mr Hudson was unaware of the fact that unclaimed Jobseekers' Allowance has to be taken into account."

But Mr Hudson said: "I’m not satisfied. If I had worked my normal notice of redundancy I would have received this payment, but as the company could not offer me this choice I have ben financially punished by the government at a time when I most needed support.

"When somebody like me has chosen not to depend on others, to then find money stopped in thuis way is a national disgrace."