Final salary after ill health, taxation and benefits question

PanPen

As expected I've been terminated on ill health grounds. I'm fuming because it includes a lot of accrued holiday, which I'd asked to have earlier when my SSP which they refused. So now it's all arrived in April in one hit meaning I've been taxed £2000 on it. As it's taken me over the Student Loan threshold, I've also lost £450 on that.

It's pretty gutting as it's unlikely I'll ever work again, so it's a lot to lose and could have been handled differently.

My questions - I am in the assessment phase for NS ESA now. So will this matter from their point of view?

2) Can I reclaim.any of this tax now? Or will I have to wait basically a WHOLE year to reclaim any of it? If ESA remains my only taxable income it's obvious I will be well under my personal allowance.

3) can I reclaim from Student Finance if I make clear it was a one of final salary payment and I now only have ESA money. Again can I do it now or year end yet again?

Fed up

Dazed_and_C0nfused

2) You wouldn't be claiming it back. DWP only make tax refunds when you sign off or at the end of the tax year, whichever comes first.

But if you still have your P45 and HMRC haven't been notified of your ESA claim yet (you can check this on your Personal Tax Account) you could make a P50 claim to HMRC and see if they will make a refund now.

But in doing that you need to understand you might end up owing some tax back idc (depends on your taxable ESA amount for 2026/27).

kaMelo

can I reclaim from Student Finance if I make clear it was a one of final salary payment and I now only have ESA money. Again can I do it now or year end yet again?

That will depend upon your total taxable income (salary, pension, taxable benefit payments such as ESA, savings interest etc) in the tax year in which you received the payment. If it was 2024-25 and your total taxable income in that year breached the earnings threshold for the plan your student loans are under then no, you can't reclaim anything.

If it was paid this tax year, 2026-27, then what is your total taxable income likely to be this year?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81976881#Comment_81976881

We are a few weeks into 2026/27 now 😉

Newcad

I am in the assessment phase for NS ESA now. So will this matter from their point of view?

The fact that your company has found you medically unfit for work will have no bearing whatsoever on your ESA assessment.
The DWP make their own decision, their assessment criteria are different, and what your employer decided will not even be taken into account.

I talk from experience, I had my employment terminated in 2011 on ill health grounds following a employer assessment, carried out by Atos.
I claimed ESA and had my DWP assessment, also carried out by Atos, the DWP found me fit-for-work.
(I later won my case at tribunal who found me LCW from the paperwork without even having to question me).

The point being that even though my two assessments were carried out by exactly the same assessment company, they were working for different organisations each with different criteria.
(It was in the employers favour for their assessment criteria to indicate me unfit for work, it was in the DWPs favour for their assessment criteria to indicate me fit for work).

sheramber

Student Loan payment can only be refunded after the end of the tax year as it depends on whether your income for the year is less than the repayment figure.

That will only be known after the end of the tax year.

You can check here. https://www.gov.uk/repaying-your-student-loan/getting-a-refund

PanPen

https://forums.moneysavingexpert.com/discussion/comment/81976910#Comment_81976910

Ah, I was afraid if be told that. Can't believe it. I've basically lost £2500 for almost a year then and it probably will be a year by the time they refund me.

If my employer had paid me what was accrued by March pay date as I had requested, I would have lost £1398 less so it's really gutting. Yes I'll get it back but honestly it's a long time to wait all because of the way they messed me around at the end.

PanPen

https://forums.moneysavingexpert.com/discussion/comment/81976881#Comment_81976881

It's for 2026/2027 and I am unlikely to work again due to health so I would say with ESA included maybe around £12250 and certainly no more than £15000 even if I get put into the support group after assessment. Big if!

kaMelo

https://forums.moneysavingexpert.com/discussion/comment/81977051#Comment_81977051

If that's the case then yes, as you haven't breached the annual income threshold then you should be able to reclaim your student loan deduction. I would add however, I don't think you can reclaim it until this financial year has ended.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81977094#Comment_81977094

already confirmed above.