Universal credit and company shares

em_irv79

Hi
I've recently started to claim UC. I have company shares less than £6k of which I don't have access to most of them yet. They sell some shares to cover the tax after 3 years and if I don't wish to cash them in they go right back in my shares account. This happened in October, its totally wiped my UC payment out as they're saying the shares deduction of 500 counts towards working my UC out! 
I'm trying to sort it but think I may have screwed myself further as ih didnt realise I shouldve declared the shares when I applied as they are under £6k?
Any advice? Means I can't pay my bills or buy food in December as I'm also currently on furlough:-( 

calcotti

em_irv79 said: They sell some shares to cover the tax after 3 years and if I don't wish to cash them in they go right back in my shares account. 

I am not clear from what you have posted exactly what you are describing.
It sounds possible that your payslip includes money from the sale of shares which UC have treated as income (whether earned or unearned) which I think is incorrect. Proceeds from the sale of shares would still be capital so you have simply changed the form of the capital (from shares to cash0. If the capital remains below £6,000 it would have no impact on UC. 
UC will be reliant on how the information is reported through RTI and if it appears as earnings they will take it as earnings. How does this process appear on your payslip?

em_irv79

Hi
It appears as sips gain on my payslip in the pay section then is deducted off in the main deductions section. I havent actually received the money as they only sell some to cover the tax. 
Thanks 

em_irv79

My payslip 

poppy12345

UC is based on your net earnings received during your assessment period. If you don't have the work allowance then your earnings will reduce your UC by 63%. Depending on what your maximum UC entitlement is then your earnings could reduce it to zero.

em_irv79

I have 292 work allowance. I picked up 100 less than a normal month and due to the income reported by my employer they still took my UC off me. Seems unfair that I get penalised for not actually having the share money then when i cash them in and get the money I'll get penalised again. I'm new to all this so it's really stressing me out 

calcotti

I've never come across this so I don't know what the correct way of dealing with this is - sorry. 
I can see that on the payslip the SIP gain of £731 is offset by a SIP deduction of £551 which would leave £180 taken into account. However perhaps UC has not recognised the SIP deduction as a pension deduction in which case the whole £731 will have been taken into account.
How does the net pay of £1,554.58 compare with a normal month? What figure has been used for earnings on your UC statement?

Unfortunately clever payment arrangements can result in unfortunate benefits consequences and this may be one of those but I really don't know.

em_irv79

I got paid less than a usual month by 100. The figure 2086 has been used to work my UC out. 

calcotti

em_irv79 said:

I got paid less than a usual month by 100. The figure 2086 has been used to work my UC out. 

So that means they have added back the £531 SIP gain listed in the deductions column. Payslip shows net pay £1554, difference between that and £2086 is £532.
I suggest you message them with full details of what is shown on your payslp in the payments and deductions columns and say something like. "You appear to have added back to my actual net pay the £531 SIP deduction. This deduction is for a contribution to an approved pension scheme and should be allowed. I believe the correct net earnings figure to be taken into account should be £1,554.5. Please review my entitlement for the month."

em_irv79

Thanks. I have messaged them but they arent sending a link over for me to prove it all with my payslip. I've sent so many messages and they just keep saying they take the deduction into account. It's for a company shares scheme not a pension 

calcotti

em_irv79 said:

Thanks. I have messaged them but they arent sending a link over for me to prove it all with my payslip. I've sent so many messages and they just keep saying they take the deduction into account. It's for a company shares scheme not a pension 

Sorry I read this as Self Invested Pension. I now realise it's a Share incentive Plan. Sorry for confusing the issue.

If it's not for a pension scheme then it will not be an allowable deduction in respect of earnings and your UC is probably right.

The only way it would be wrong is if the SIP movements should be treated as capital transfers rather than income but I don't know.