Universal Credit and Employment Tribunals

dj9911

Hello,

I've searched and searched for an answer to this and can't find it. I'm hoping someone will be able to help.

Under JSA if you won an employment tribunal you had to pay back any JSA received from the award. But if you settled 'out of court' you didn't have to pay back the JSA from the settlement amount.

Does the same apply to UC? Or would a settlement 'out of court' be classed as earnings? If it is classed as 'earnings.' Does the amount you settled for only count over the one month?

huckster

https://www.citizensadvice.org.uk/work/problems-at-work/employment-tribunals-from-29-july-2013/employment-tribunals-valuing-a-claim/compensation-for-discrimination/employment-tribunals-discrimination-whether-any-welfare-benefits-you-have-received-will-reduce-your-award/


Is this the information ?

I think the answer is that a tribunal decision or outside settlement which is to pay a sum of money as 'earnings' would be counted as 'earnings' by UC.

Anyone receiving such earnings would have to disclose them and they would be considered by UC when they were paid.

dj9911

Thank you for your reply and sorry for the late reply.


It's not really clear enough. The way I read it, it always says 'the tribunal will.' If you make a settlement before the tribunal the tribunal doesn't have anything to do with it.

sammyjammy

If you settle out of court then you are correct there is nothing determined that says you have to pay back UC but the payment may be taken into account as income for UC, you would need to check if its counted as income.

calcotti

sammyjammy wrote: »

If you settle out of court then you are correct there is nothing determined that says you have to pay back UC but the payment may be taken into account as income for UC, you would need to check if its counted as income.

I think that's exactly the question the OP asked in his opening post!

Op, if the settlement does count as earnings (and I don't know the answer to that) then it would be counted in the month you received it. Any amount over your UC award can be carried forward as 'surplus earnings' in the following month but there is a £2,500 disregard. The rules are complex see https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/self-employment/surplus-earnings-and-losses (although this is headed self-employed the same rules apply to employed claimants).

Broadly though if you had a UC entitlement of £1000/month and received a payment of £6,000, as I understand it, it would work like this:
First month earnings deduction is 63% of £6,000 = £3,780.
Your maximum Uc entitlement is £1,000 so have a NIL award. You also have £2,780 of surplus earnings.
Because of the NIL award your UC claims closed but you can make a rapid reclaim.
In the next month the £2,780 of surplus earnings are brought forward less the £2,500 disregard leaving £780 to be treated as earnings. So UC award this month is £1,000 - £491.40 (63% of £780) = £508.60.
The following month you would get the full UC.

dj9911

Thank you for your replies.

I agree with the principle of the 63% reduction. But in this case if it is classed as earnings (which I suspect it will be) it's just daylight robbery. It's not earnings at all. I've fallen foul of it before when I started my claim. My last weeks wages were paid in after the claim started and they took 63% of that. The fact it was for earnings before the start date of UC was irrelevant. The day it was paid was all that counted. Money you have already been taxed on, taxed again at 63%. Also tax rebates, SSP. Total joke, but not a funny one!