Termination payment into workplace pension

Arun171819

My employment is ending because of my disability, and I am about to receive payment in lieu and accrued holiday pay, and I currently receive Universal Credit. Is it possible for me to instruct my employer to deposit the holiday pay and payment in lieu directly into my pension fund? Because I am contributing to a pension, will this have an impact on how much Universal Credit I receive each month? Any guidance would be appreciated.

NedS

Yes, you can ask any payment that may be due to be made into your pension, assuming you will not exceed the amount you are allowed to contribute in one tax year.

Any payments made into a pension will be deducted from income and will not be treated as income for your UC claim. This will be automatic as long as it's paid directly into the employer scheme by the employer. If the employer pays you and you then contribute those earnings into a private pension like a SIPP, you would have to notify UC and fight with them to get the pension contributions disregarded as income.

Why is your employment ending because of a disability? All employers are required by law to make reasonable adjustments for your disability, and if you are unable to continue doing your current role, they must move you into a role that you can do. Is ending your employment really the best thing for you?

Brie

NedS said:

Why is your employment ending because of a disability? All employers are required by law to make reasonable adjustments for your disability, and if you are unable to continue doing your current role, they must move you into a role that you can do. Is ending your employment really the best thing for you?

I agree with the rest that Ned says but do know that there are times that a disability cannot be supported by an employer and ending the employment is the only answer.  BUT if they can't continue with your employment and you do have a work pension has the possibility of an ill health pension been investigated thoroughly?  yes this will affect your UC if/when it is paid out as it is income.  If the amount to be paid is small then it might be best not to go down that route.  

Arun171819

Thank you for providing information. I have been moved to a Group Income Protection (GIP) scheme by my employer who will pay me from now on.The company currently does not have an alternative role for me and that there are potential redundancies on the horizon due to the company's performance. They have also carried out risk assessment which i failed. 

I will be receiving 80% of my pay through the GIP, which provides some financial support. I also have the details of the final payment, which is approximately £9,500, and my annual pension contribution allowance of £60,000. Hope paying the 9500 into workplace pension wont affect my universal credit payments.