Settlement payment/ tribunal claim. Affected my universal credit

Edited , 3 users are following.

I'll make this as easy as possible.

Been off work for over 12 months due to anxiety and depression and having a breakdown.

I claim universal credit and receive lcwra element and housing benefit.

Finally ceased employment August 19 after my ssp had fully exhausted.

Received final pay from employer which was £0 as they said they had overpayed me and that I owed them.

Went through ACAS conciliation and had a tribunal claim which was due to court in February 2020.

Employer settled out of court and admitted they was wrong and I we agreed on a sum of £2200. They paid the tax on it and it was directly paid to my account on the 4th march 2020. I also received my full universal credit award on the 10th that month.

I have today looked to see if my payment is available for April and it is showing as £0 due to a reported earnings by my employer of £2200.

Yes I did receive £2200 which was a compensation /settlement payout and I was under the full impression that this was my money to do as I wish as it was a payout not an actual wage. The money has all been spent on various things and I was expecting my normal pay this month to continue but as I've explained above it has been reduced to zero pounds because of my payout. Can anyone help or has anyone been in this situation and what was their outcome. I didn't realise the dwp could do this and I'm hoping it maybe a problem with their system where it sees an amount of money as a wage whether it's compensation or not. I'm really stressed as I have my 13 year old son up for easter and with all this covid19 situation too it is making feel really ill plus seeing my payment today is really not helping my mental health. I look forward to any replies thanks

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  • Posted

    Hi,

    It's a final pay from your employment, which you should have been entitled to at the time your employment ended. A final pay would have affect your UC at the time you should have received it, so i'm afraid yes it will be counted as earnings in the month you received it.

    As you have LCWRA then you will have a work allowance of £287 per month, which means you can earn that much before you see a reduction of 63% in your UC. However, because the money you received was over £2,000 then it will have most likely reduced your UC to zero, which is correct.

    Unfortunately, you can't expect to have those earnings and your UC amount to because UC is a means tested benefit.

    You maybe eligible for a budgeting advance, if you've been claiming UC for at least 6 months but this isn't guaranteed and if you have and outstanding amount from a previous budgeting loan advance then you won't be able to have another until that loan is paid back.

    I'm sorry i couldn't give you any good news.

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    • Posted

      I can see what your saying and don't want to offend if you've misunderstood.. I had ceased employment and the case lasted 6 months. My employment had finished last August. The payment wasnt a final pay it was a compensation payout or a settlement out of court payout. Although I understand why you say it is a final wage. Which it should have been but it wasn't cos they paid me nothing hence me going down the employment tribunal claim route. Either way its left me in the lurch and not feeling too good atm

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    • Posted

      Was it for ? you say it was a compensation pay out but you haven't given any further details, other than to say that it you should have received a final pay but didn't, so you took them to an employment Tribunal.

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  • Posted

    The amount you received would have been reported to HMRC for tax purposes. DWP would have then looked at the Real time information (RTI) to see what earnings you received during your assessment period. Even though it was a Tribunal it was earnings which you should have received some months ago but didn't.

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  • Posted

    It was an out of court settlement 6 months after my employment ended. In really confused by it now and it is not earnings

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  • Posted

    I still don't think it's right and I should of been informed in advance either way as that was money that I won in a claim that is for me to spend however I like. ( it isn't earnings) I will just have to see how it pans out over the next few days but I'm not expecting much tbh as the dwp are inundated with things as it is. But I'll keep my finger ls crossed and I will report back on this and let you and the site know the outcome incase the same situation arises in the future

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  • Posted

    Also I'd likd to add. I have received ppi refunds in the past that have been paid into my bank account and my universal credit was not affected. And I see this as the same thing as I wasn't employed and it was money that I won in a claim. Money that is meant to be for my use on what I see fit. Not to cover my rent or lcwra or housing benefit. And if I had savings of 16k I could still claim money so I do not understand this as it is a lot less than 16k and it is 100% not earnings from my employer as I did not work there

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    • Posted

      PPI is not the same as this. PPI is classed as savings and the reason why it didn't affect your UC when you received it was because your savings were most likely less than £6,000. Savings of more than £6,000 will reduce the amount of UC you're entitled to. Savings of more than £16,000 will mean you're not entitled to any UC or any other means tested benefits.

      Even though you weren't working when you received that money it was paid from your employer, the payment was reported to HMRC by your ex employer, which means it's classed as earnings. DWP received the information from RTI.

      You don't have to be working at the time of receiving money for it to be classed as earnings. For example. A claimant could receive a tax rebate from HMRC and this would be classed as earnings for UC in month it's received, which will likely reduce the amount they are entitled to that month.

      I have asked you a few times what the money was for and you haven't answered my question. If you want help from a forum you have to give all the information because it makes it extremely difficult to help without all the information.

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  • Posted

    I have explained exactly what it is. I wasn't employed by the company and I won a case against them and they paid money into my bank. They are not my employer and I am not employed by them and haven't been for over 8 months. So it isn't earnings and therefor should not be any reduction in universal credit. I don't know what other inform you need from me as that is everything there is to it?

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    • Posted

      It makes no difference whether or not you are still working for them or not. It would be exactly the same if a person left work because of health reasons and had a final payment BUT they hadn't worked for that employer for several months or more..... the money would be classed as earnings and reduce the amount of UC they are entitled to in the month they receive it.

      8 months ago you left work and you didn't receive any final pay from your employer so you took them to Tribunal because of this reason, correct?

      In my opinion the money you received from your employer for the out of court settlement is money that you should have received 8 months ago.... final pay.

      Even if it was a payout for discrimination it would still have reduced the amount of UC you were entitled to in the month you received it.

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    • Posted

      If however, you were claiming New style ESA then it would have been a very different story. One of the benefits of claiming a Contribution based benefits, they are not means tested.

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    • Posted

      As you have said there it is "in your opinion" and I have "my opinion" the fact and bottom line is it is not "earnings" it is my money to do what ever I feel I need to it is nothing to do with my benefits. But like I said earlier I will see what happens over the next few days and report back. I asked for advice and I'm grateful and I also asked if anyone had been in the same situation. I didn't really want an opinion I wanted an actual fact which I still don't think we have got. But I will certainly find this "fact" out.

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  • Edited

    it was earnings or why would your employer of settled out of court, they settled out of court paying you any earnings and holiday pay you had not been paid prior to you leaving your employment. All because its gone to a tribunal and they settled out of court means they paid what they owed you and maybe a little compensation too, but being tax was paid on that amount does mean it was paid as earnings

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