Employer paid more than Permitted Work allows...

nero33

Hi, a relative who is doing Permitted Work was overpaid by their employer by £7.  The maximum monthly total allowable for March 2022 was £608 and they were paid £615.

Not happened before.  Will they face some sort of punishment/sanction/stoppage of ESA etc or is it such an insignificant amount (only £7 over 12 months) that it'll be ignored?

Thanks

huckster

As long as hours are still 15 or less per week.

Permitted work weekly earnings amount is increasing to £167 from April 2023 anyway.

Up to your friend whether they want to contact ESA to ensure they are aware, if before April, the weekly limit at that time of £152 was exceeded.

Newcad

Was/is your relative paid monthly or 4 weekly?

The 2022/2023 PW allowance/limit was £152 per week.

If the wages were paid 4 weekly then as you say that's £608.

But a month is longer than 4 weeks so for monthly paid wages the DWP calculate it as: £152 x 52 / 12 = £658.67 a calendar month

Alice_Holt

If your relative does get sanctioned by the DWP, it may be worth challenging and running the case to tribunal.

I had a case where the client (on CA) was paid (incorrectly) by her employer 25p pw above the earnings limit for many months.
At tribunal it was agreed that the additional 25p represented a gratuitous payment by her employer, over and above her contractual terms so did not constitute "earnings".
The client was very relieved that she did not need to repay the thousands of pounds of CA payments demanded by the DWP, and had decided to go to her local Cit A for help.  

It helped at tribunal that the client had:
i) her original contractual agreement;
ii) a letter from her employers admitting payroll errors;
iii) proof (copy of a cheque) that she had repaid the excess payments (c.£10).

Your relative might want to bear this in mind, should any ESA problems arise due to their payroll error. 

nero33

Sorry, in error I said 2022.  It was actually March 2023, so the level has been exceeded by £7 that month.

nero33

Newcad said:

Was/is your relative paid monthly or 4 weekly?

The 2022/2023 PW allowance/limit was £152 per week.

If the wages were paid 4 weekly then as you say that's £608.

But a month is longer than 4 weeks so for monthly paid wages the DWP calculate it as: £152 x 52 / 12 = £658.67 a calendar month

Pay period is between the 6th of the month to the 5th of the next month

HillStreetBlues

nero33 said:

Pay period is between the 6th of the month to the 5th of the next month

So they are earning £141.92 a week, so under the threshold.

nero33

HillStreetBlues said:

nero33 said:

Pay period is between the 6th of the month to the 5th of the next month

So they are earning £141.92 a week, so under the threshold.

But their payslip every month shows £600 for 60 hrs (15hrs per week @ £10/hr) since April 2022.  Except March 2023 which was 45 hrs @ £10 & 15 hrs @ £11.

So £615.

Over the course of the year, it's still under what they could earn under permitted work. 

Alice_Holt

nero33 said:

HillStreetBlues said:

nero33 said:

Pay period is between the 6th of the month to the 5th of the next month

So they are earning £141.92 a week, so under the threshold.

But their payslip every month shows £600 for 60 hrs (15hrs per week @ £10/hr) since April 2022.  Except March 2023 which was 45 hrs @ £10 & 15 hrs @ £11.

So £615

       So £615 for the month.

  £615 times 12 months represents an annual pay of £7,380.

  £7,380 equals £141.92 per week (£7380 / 52).   (As HSB has posted above).  So under the PW £152 weekly amount.


  Or look at it this way:

Your relative is monthly paid. They are not paid 4 weekly (that would be 13 pay periods in each year).



Your post indicates that from April onwards they will be paid 15hrs per week at £11 phr.

This equates to £165 per week.  £8,580 per year  (£165 times 52).  £715 per month (£8,580 / 12)

The permitted work allowance increases to £167 per week for 2023/24. So, your relative remains just under the PW limit.  
 

HillStreetBlues

nero33 said:

  Except March 2023 which was 45 hrs @ £10 & 15 hrs @ £11.

As it's monthly all they can do it multiply it 12 and divide by 52 to get the weekly amount for March which is £141.92

If the person worked 60 hours a month, that person could earn £10.97ph in March and still be ok (your relative earnt £10.25)

Now it's risen to £167, a person working 60 hours a month can earn £12.06ph and be under the limit.

EDIT
Your relative wage will increase (from the £10ph) as the min wage has risen, as the figures above show, then is no need to cut the hours worked

nero33

HillStreetBlues said:

nero33 said:

  Except March 2023 which was 45 hrs @ £10 & 15 hrs @ £11.

As it's monthly all they can do it multiply it 12 and divide by 52 to get the weekly amount for March which is £141.92

If the person worked 60 hours a month, that person could earn £10.97ph in March and still be ok (your relative earnt £10.25)

Now it's risen to £167, a person working 60 hours a month can earn £12.06ph and be under the limit.

EDIT
Your relative wage will increase as the min wage has risen, as the figures above show, then is no need to cut the hours worked

Thanks for the detailed explanation.  In this instance there should be no need to contact DWP as they'll presumably do the same calculation?