Settlement payment/ tribunal claim. Affected my universal credit
Posted , 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
0 likes, 28 replies
david9482
Edited
It really isn't earnings its compensation
denise15811 david9482
Posted
It impossible for it to have been compensation because if it was it would have been tax free...
david9482 denise15811
Posted
This is the point I'm making. It is compensation. I never paid tax on it. The company did and paid me the money with no tax being paid through my national insurance.
mark12977 david9482
Edited
The company always pays an employees income tax and national insurance, regardless who pays it it was paid that means a proportion of your payout was income or no tax would of been paid by anyone. In your own words you took them to a tribunal because they did not pay you when you left the company.
denise15811 david9482
Posted
UC check earnings through RTI as explained above in a previous comment of mine. Your employer reported the payment to HMRC because deduction were made... earnings affect the amount of UC you're entitled to.
mark12977 david9482
Posted
hi again i do think the dwp are correct regarding your uc payment, as if this was not earning it would never of showed up on the system. one thing you could try is contacting hmrc and ask if you have over paid your income tax as employers pay a percentage of your earnings each month and if you have earned less than £12500 you could be due a tax rebate.
But everything I and denise have told you is correct, you may disagree but that too dont make you correct.
david9482 mark12977
Posted
No I never said I was correct I was merely asking for advice. And I was the under impression it was an out of court settlement and was advised by acas that it would be a tax free payout I was completely unaware of what my ex employer had actually done. I hadn't been employed since last September so I had no reason to believe that they would pay as a wage and also I was told it was a compensation payout if you like. Anyway I have managed to log onto hmrc this morning and I can see clearly what my ex employer has done and it is exactly what you and Denise have said. And I understand this is why universal credit are paying me nil. But do you understand where I was coming from with it all as I wasn't employed by them and it was a claim and I was assured by acas that it was a tax free sum to myself to do as I pleased and not to cover my benefits. Anyway thanks for replying and your help. All I can do now is try and plead with universal credit to help me somehow. But I really can't see that happening. What a mess
denise15811 david9482
Posted
My knowledge is fairly good on the benefit system and i definitely wouldn't have given the advice in the first place, if i didn't think it was correct.
I'm sorry to hear the ACAS advised you incorrectly and made you believe that it wouldn't affect the amount of UC you were entitled to.
Regarding the tax rebate advice from Mark, yes you can request the rebate, if you're entitled to it from HMRC BUT do be aware also that a tax rebate will affect the amount of UC that you're entitled to in the month that you receive it. I certainly don't agree with this and think it's totally wrong but that's the rules.
Regarding the budgeting advance if you're a single person and you've been claiming UC for more than 6 months then you can ask for this but you'll only be entitled to £348, if they agree to give it to you. It will reduce future payments so do be aware of that.
One question, in previous comments i've mentioned New Style ESA, may i ask if you claim this? If you don't then it maybe worth you apply for this. It won't make you financially better off because the amount you receive will be deducted from your UC total. As it's not means tested then it could be useful in the future.
If in the future you have a works pension then this will reduce the amount of UC £1 for £1 BUT if you're claiming New style ESA then only pensions over £85 per week will affect the amount you're entitled to. Pensions that are less than £85 per week will not affect the amount you're entitled to.
Claiming New style ESA will depend on your NI Contributions from working in tax years April 2017 to March 2019. You already have LCWRA so this will mean you'll be placed in the relevant group for ESA, which is Support Group.
In the meantime if you're renting your house then you may need to speak to your landlord about your rent payments.
Hope this does help and i'm sorry i couldn't give you any good news about the payment you received.
mark12977 david9482
Posted
1st see if you can get an hardship loan from universal credit
2nd see if your entitled to a tax rebate from hmrc
good luck
david9482 mark12977
Posted
Yes mate thanks. I've done the tax application already and I've left a message in my journal for universal credit. Cheers
denise15811 david9482
Posted
As you have LCWRA then messages on journals are very often not answered so please do be aware of that. Ringing them may take a while too because of the 1 million people that have applied for UC in the past 2 weeks, phone lines are crazy right now, so i've heard. I hope you get something sorted soon. Good luck.
david9482 denise15811
Posted
Thanks Denise this is interesting. I am on universal credit at the moment and receive lcwra and housing benefit elements too. I didn't realise I could claim new style esa. I thought once I was on universal credit then that would be it. Is it possible to change from lcwra to the new style esa and would I be entitled to the disability premiums that go with esa. I don't want to cause myself more stress if I don't have too as the universal credit is paid on the same day every month and it makes things easier for me.
denise15811 david9482
Posted
You can apply for New style ESA but as i advised, it won't make you financially better off and you won't receive the disability premiums because they are not payable to new style.
Your ESA will be deducted £1 for £1 from your UC entitlement but it could be helpful in the future if you claimed for it.
It's also useful because ESA is paid fortnightly and UC is paid monthly. Lots of people have issues managing the monthly payments for UC.