Carers Allowance & Bonus From Ex Employer

Robot27

Hi.

I'm caring for my Dad who is terminally ill with cancer.

1) I left my job on 02/01/2019;

2) I applied for Carers Allowance (£65 per week) on 01/02/2019 - backdated to 02/01/2019;

3) I sent P45 (which stated I left job 02/01/2019) and final payslips;

4) out of the blue, I received an unexpected payslip from my ex employer on 28/02/2019. This payslip is a one off payment of a 'bonus' for work I did in 2018. This is taxed on an emergency tax code and after tax it is £3,000;

5) whilst processing my Carers Allowance claim, they have detected this payslip and have asked me to send it to them which I have done.

So to recap, I left my job on 02/01/2019 and I've made a claim for CA allowance backdated to this date. However I've received this unexpected payment from my ex employer for bonus from 2018s work of £3000. I've paid this out on debts.

Will this unexpected bonus effect my Carers Allowance claim?

Thanks.

calcotti

Is the information you have sent to DWP clear about the period of time the money was earned for? If not I suggest you try and get something from your employer.

Working out earnings for CA is quite complicated, however where earnings are attributable to a particular period of time they are are supposed to be attributed to that period. It is not like UC which takes income into account as it is received. If it is clear that the money was earned in 2018 I don't think it should affect your entitlement now.

Even if attributed to 2018 there is a possibility that it might affect your entitlement for a short period at the start of your claim because CA treats earnings as paid in advance (even though we all know they are usually paid in arrears). This means that if you are earning over £120/week paid monthly, stop work and claim CA there is a 4 to 5 week delay because you are treated as over the earnings limit for the first month due to your final payment. If this means that your earnings for this first period are now over the limit whereas before they were below you would affected.

There is information on how earnings are calculated here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721751/dmgch15.pdf

Para 15758 Arrears paid after the due date
Arrears paid after the due date should be treated as paid
1. on the first day of the benefit week in which they were due or
2. on the first day of the benefit week following that in which they were due.

The question therefore is when this bonus was due to be paid.
unfortunately if the way the bonus works is that it only just became due then I think it would need to be taken into account now. Para 15427 has more detail about what period of time it is attributable to - but I don't understand it.

Robot27

calcotti wrote: »

Is the information you have sent to DWP clear about the period of time the money was earned for? If not I suggest you try and get something from your employer.

The payslip I sent them clearly states 'Bonus' but it doesn't say 'Bonus for 2018' - however if need be, I could contact my ex-employer and ask them for written confirmation that this is for 2018.

Working out earnings for CA is quite complicated, however where earnings are attributable to a particular period of time they are are supposed to be attributed to that period. It is not like UC which takes income into account as it is received. If it is clear that the money was earned in 2018 I don't think it should affect your entitlement now.

Again, I may have to emphasise to the DWP that this payment was for 2018 (which Ive spent to pay debt & rent)

Even if attributed to 2018 there is a possibility that it might affect your entitlement for a short period at the start of your claim because CA treats earnings as paid in advance (even though we all know they are usually paid in arrears). This means that if you are earning over £120/week paid monthly, stop work and claim CA there is a 4 to 5 week delay because you are treated as over the earnings limit for the first month due to your final payment. If this means that your earnings for this first period are now over the limit whereas before they were below you would affected.

I understand

There is information on how earnings are calculated here

Para 15758 Arrears paid after the due date
Arrears paid after the due date should be treated as paid
1. on the first day of the benefit week in which they were due or
2. on the first day of the benefit week following that in which they were due.

The question therefore is when this bonus was due to be paid.
unfortunately if the way the bonus works is that it only just became due then I think it would need to be taken into account now. Para 15427 has more detail about what period of time it is attributable to - but I don't understand it.

I've just found out that the bonus is ALWAYS paid to employees in FEBRUARY of the following year, so basically it is due to be paid in Feb 2019, for the work carried out in 2018

I feel like I should be proactive and phone the DWP to ask if they can put my comments on my case.

But I think its probably best, just to let them continue with my case to see what the outcome is. Then to go back to them to put my case forward if need be.

Thank you so much for your help

Thank you so much for your help.

calcotti

Unfortunately I think that means that it does fall to be taken into account now. If I have understood the guidance correctly the payment would be attributed to the normally payment period so if you were still being paid monthly it would most likely be included with your pay for the month. You of course no longer have regular payments so it is unclear what your payment period will be taken to be. I see two possibilities.
1) they take it as a payment for one month and you lose CA for March, or
2) I think they is an argument you could put that it should be spread over a full year on the grounds that the bonus payment is an annual payment. If so it would be taken into account for the period February 2019 to February 2020 but £3,000/52<£120/week so would not affect CA.

When you say it is a bonus for work in 2018 is this the full calendar year 2018 or is it the tax year 2017-2018? It probably doesn't make any difference but just curious.

As an aside please remember that Carer's Allowance is taxable so if you have income from other sources which together with the Carer's Allowance takes you over the income tax personal allowance there will be income tax to pay. However you may actually be due a small tax refund for 2018-2019 because you will not have got the benefit of your personal allowance in February and March.

calcotti

If you have savings less than £16,000 have you looked at claiming Universal Credit? If you are a single person over 25 this could pay you £194.34/month on top of your Carer's Allowance (more if you have rent to pay).

Also adding to previous comments. Although you backdated your claim to beginning of February, because DWP treat earnings as paid in advance, if you received a monthly salary at the end of January this may mean that you have no CA entitlement in February depending on the size of that payment.

bigbill

calcotti wrote: »

There is information on how earnings are calculated here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721751/dmgch15.pdf

Stick in an appeal ASAP if they include ANY of your previous monthly / yearly earnings as you are no longer employed all should be ignored.

The above Regs are to calculate on-going earnings of people employed and continuing to be employed not for people who have now stopped working, look at their definition of employed earner in the very early paragraphs.

calcotti

bigbill wrote: »

Stick in an appeal ASAP if they include ANY of your previous monthly / yearly earnings as you are no longer employed all should be ignored.

The above Regs are to calculate on-going earnings of people employed and continuing to be employed not for people who have now stopped working, look at their definition of employed earner in the very early paragraphs.

It had not occurred to me to interpret it that way but I can see the logic. There is no ongoing employment therefore not in gainful employment so there is no requirement to calculate earnings regardless of any late income received. I like it but I can see a counter argument.

15026 The words“derived from” mean having their origins in. Payments made for past or present employment should be treated as earnings, unless they are excluded under DMG 15025. Work out the period for which earnings are to be taken into account before deciding the claim(see DMG 15400 et seq).

And if we go to
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721807/dmgch60.pdf
Gainful employment

A person is in gainful employment on every day in a week where the earnings in the week immediately before are greater than the earnings limit. Earnings in one week affect entitlement to CA in the following week. It does not matter whether the person is still gainfully employed in the following week.

bigbill

I should have added be ready to appeal as these rules are so complicated, however?

See Para 1 5 3 4 0 of the above Reg which are there to help people claiming Carer Allowance only and could be due to my organisation at the time appealing three identical ones in 2006-2007 on this exact issue all were won by us and I we were none to happy at having to continually appeal on the same grounds, none were challenged following the appeal.

So the DWP may well have finally accepted this and have now added the extra rule at Para 1 5 3 4 0 which I have to say I have never seen before.

calcotti

For those reading this https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721751/dmgch15.pdf

15340 Subject to DMG 15341, with effect from the first benefit week applicable to the case which starts on or after 1.10.07, any earnings paid or due to be paid from the claimant’s employment are disregarded where
1. a claim for benefit is made and
2. the claimant was in employed earner’s employment and
3. that employment ended before the date that claimant first satisfied the conditions of entitlement (except in so far as they are affected by earnings to which this disregard applies) in relation to the claim.

Paragraph 15341, which is referred, to lists some exceptions but these do not apply in this case.

That seems absolutely clear. I had completely missed it - thanks a lot bigbill.

OP, on this basis your CA should not be affected by the bonus and if DWP say otherwise challenge the decision (you could quote this paragraph to them if necessary). Big thumbs up for bigbill.

However I still think you are unlikely to be entitled to CA from 02/01/2019. I think your entitlement will be from the first day after what would have been your next normal payday following 01/02/1019 (assuming your normal pay was >£120/week).

See the two examples given following paragraph 15341 in the guidance document.