Will this be unearned income or savings?

Haribo1

I'm getting a payout from an insurance policy as I have cancer. I'll be getting a lump sum and know that the money i get paid on top of this every month is classed as unearned income. As it has taken a while to sort out the payout, they will backpay me 3 months worth of the monthly pay of 500 pounds, in another lump sum.
Will this still be classed as unearned income or as savings? I'm a bit confused.
Hope that makes sense

kaMelo

I think the back pay will be treated as unearned income in the period it should have been paid.

If you were in receipt of a means tested benefit for the periods which these payments were for, it's possible you may have been overpaid as those benefits may need recalculating to include the payments you should have received.

Haribo1

Oh god it's more complicated than I thought! I'll get onto my journal as soon as the money lands

sammyjammy

kaMelo said:

I think the back pay will be treated as unearned income in the period it should have been paid.

If you were in receipt of a means tested benefit for the periods which these payments were for, it's possible you may have been overpaid as those benefits may need recalculating to include the payments you should have received.

This is not correct, payments are only taken into account when they are received for means tested benefits, including Universal Credit.

Haribo1

I'm on uc, so will I have an overpayment to pay back?

sammyjammy

Haribo1 said:

I'm on uc, so will I have an overpayment to pay back?

If you've not received anything yet there is no overpayment, you need to declare as soon as you receive anything.

Haribo1

Thank you Sammy

Yamor

sammyjammy said:

kaMelo said:

I think the back pay will be treated as unearned income in the period it should have been paid.

If you were in receipt of a means tested benefit for the periods which these payments were for, it's possible you may have been overpaid as those benefits may need recalculating to include the payments you should have received.

This is not correct, payments are only taken into account when they are received for means tested benefits, including Universal Credit.

This is only the case for "earned income".

"Unearned income" does not have such a rule, and it does NOT depend on when the payment is received.

Haribo1

So I do need to declare it as unearned income? I'm confused

born_again

Just put a message in your journal advising of the amount & how it has come about.