Underpayed WFTC lump sum and HB?

ivan_the_not-so-terrible

Hi,

I'm self employed and have earned a lot less this year than I expected. This will generate a WFTC underpayment sum to be payed to me when I send in my renewal pack. What I want to know, is will the lump sum (probably over £1000) be classed as income, or a capital gain? Obviously, if we'd have had the money payed over the year, it would have been classed as income for our HB calculation. But as a lump sum, it will squew our income figure to look like we've had a much higher income for the month it's payed. That would probably drop our HB for the next few months by a silly amount (I earned more than usual one month last year when I covered someones holiday. I then lost more in HB than I'd earned!). The HB calculation for self employed people is hard to fathom at the best of times, and can lead to real hardship for those of us with incomes that vary wildly over the year.

I tend to slightly under-claim WFTC every year for fear of having to make repayments, but this year my income is well down. It's also the first time I've been claiming HB when this has happened, so wonder how this lump sum will be viewed?

Ivan

[Deleted User]

HB dont take one off payments from TCO in to consideration when calculating your benefit.

ivan_the_not-so-terrible

Great! Thanks for the info :beer:

Macro_3

subsoniccoyote wrote: »

HB dont take one off payments from TCO in to consideration when calculating your benefit.

One-offs are taken into account - the way in which one-offs are used is fairly complicated and depends on the amount, period for which they apply and how they fit into the pattern of payments.

Payments of arrears are treated as capital but disregarded for 52 wks if the arrears have been caused by a change of circumstances within the award.

[Deleted User]

The OP should speak to HB for confirmation but in my 3 years they have never been interested in any one-off payments and are only interested in the regular amounts.

Obviously if it is a very large amount this may affect any benefit due to rules on capital/savings.

Macro_3

subsoniccoyote wrote: »

The OP should speak to HB for confirmation but in my 3 years they have never been interested in any one-off payments and are only interested in the regular amounts.

Obviously if it is a very large amount this may affect any benefit due to rules on capital/savings.

That's strange - we definitely take them into account. I'd be interested to know if any other HB assessors would ignore them?

paulofessex

I was advised by a benefits advisor approx. 6 months ago that l am entitled to more CTC but the extra income would effect HB entitlement so if l could manage without it wait to receive the underpayment as this wouldn't have any effect on my HB claim

Macro_3

paulofessex wrote: »

I was advised by a benefits advisor approx. 6 months ago that l am entitled to more CTC but the extra income would effect HB entitlement so if l could manage without it wait to receive the underpayment as this wouldn't have any effect on my HB claim

That would be a payment of arrears - not a one-off - so correct.