Effect on benefits of redundancy payment

Ponsienella

Due to my brother being on long term sick leave his company's Independent Occupational Health Advisors have told him his employer is now going doing the Capability route. They have been given permission to access his medical records and have applied to his Psychiatrist for them.

In the meantime they are undergoing a company-wide consultation with workers with a view to decreasing hours and he had a 1-2-1 discussion last week.

There is a possibility of him being made redundant rather than being dismissed as incapable of doing the job through ill health. He has 8 full years of service and, as he's only on minimum wage, his payout wouldn't be substantial although terms haven't yet been stated.

I am wondering what the situation would be regarding the benefits he is on. He was recently awarded Income-related ESA and he also receives full HB and maximum CTR allowed by his council. He also receives PIP (which I know would not be affected by other income).

Does this just affect his capital amount and therefore reduce his benefits by £1 per £250 over the allowed amount or would benefits be cancelled until he has used up any redundancy pay or pay in lieu of notice from dismissal for capability reasons?
(He has about £7k in his bank at the mo before the potential redundancy payment).

Thank you to anyone who can offer any advise.

TELLIT01

The redundancy payment will be treated as capital. From what you say, the amount of redundancy pay isn't likely to be large, certainly not close to the £9k it would take to push him over the £16k upper limit on capital.