Tax refund whilst on Universal Credit

Sheri_Winter_Berry

Im sorry if this has been discussed already (This is my wife's account). I have been on Universal Credit and a private pension since February 2020 I am an unpaid carer for my wife. (I was a full time Maths teacher) My wife claimed PIP and was refused, she then completed an MR, she was refused again, she is now waiting for her appeal date fully supported by CAB a social prescriber, her doctor and various other agencies.(she has Long-Covid) I left work through stress and anxiety due to bullying and then my wife became very ill. I overpaid on income tax but didn't know. I have now received a cheque for just over £1100. Can I cash this money and pay UC back the £280 I have had to borrow? I am using my credit card to make ends meet and family are also helping, my UC is only £340 a month (This includes rent) as I Get £580 private pension. Please can you advise me what to do. Many thanks.

calcotti

You need to tell UC about the income tax refund. If it relates to a tax year in which you were employed or self employed then the refund will be taken into account by UC as if it is earnings. Unless you are entitled to a work allowance there will be a deduction of 63% of the repayment (or 55% of the repayment if your assessment period ends after on or after 24th November). If you are entitled to a Work Allowance the first £515 will be ignored (£547 if your assessment period ends after on or after 24th November).

Has your wife had a Work Capability Assessment and if so has she had a decision?

UC are presumably taking the advance back in instalments by deduction from your ongoing payments. I don't know if there is a mechanism for you to pay back in one go.

Sheri_Winter_Berry

Dear calotti, thank you for your help and guidance. Could you tell me if this will only affect one months UC or more than one month? My wife hasnt heard anything from UC since she filled out the UC50 ages ago. 

calcotti

Sheri_Winter_Berry said:

Dear calotti, thank you for your help and guidance. Could you tell me if this will only affect one months UC or more than one month? My wife hasnt heard anything from UC since she filled out the UC50 ages ago. 

Given the amount involved it will only affect the UC assessment period in which you receive the refund (providing that it doesn't take your capital over £6,000, which given your debt situation I assume it won't).

May be worth your wife chasing the Work Capability Assessment (but there are long delays at the moment).

Did you told UC that you are a carer when you claimed? If not you should do so. If your wife is successful at tribunal and gets Daily Living PIP then you will be entitled to the carer element of UC but you may struggle to get this backdated if you haven't told them you are caring for her.