× Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Housing costs  →  Thread

Period to which earnings attributed - holiday pay

MLloyd
forum member

Leonard Cheshire Disability

Send message

Total Posts: 8

Joined: 28 August 2014

Hi
I have a client who’s getting paid contractual sick pay of her full wage, she’s getting some housing benefit, but now it’s coming to the end of the year and she’s entitled to some holiday pay which she estimates will be £700. I can’t work out whether HB will take this into account over the period which it is actually paid, similar to other forms of earnings or tax credits, when arrears aren’t counted, or whether they’ll average it over the whole year. I can see an argument for either, really.

Any ideas? I’ve had a look at the regs but they don’t seem to give a clear picture.

Paul_Treloar_CPAG
forum member

Advice and Rights Team, Child Poverty Action Group

Send message

Total Posts: 550

Joined: 30 June 2014

I think that you need to look p.263 of CPAG WBH 2014/15 which covers situations where someone has stopped work but their job hasn’t ended. Refers to reg 35(1)(d) and 46(3) of HB Regs.

The former allows that someone’s earnings includes “any holiday pay except any paid more than 4 weeks after termination or interruption of employment”

Latter allows that “Any holiday pay which is not earnings under regulation 35(1)(d) (earnings of employed earners) shall be treated as capital”

So if holiday pay is paid less than 4 weeks after they finished work, it is simply disregarded whereas more than 4 weeks later means it is treated as capital.

[ Edited: 28 Oct 2014 at 10:16 am by Paul_Treloar_CPAG ]
MLloyd
forum member

Leonard Cheshire Disability

Send message

Total Posts: 8

Joined: 28 August 2014

Hi Paul

That’s great, thank you. I’ve only got access to the online version of CPAG, which I find really hard to navigate, so I keep missing things!

HB Anorak
forum member

Benefits consultant/trainer - hbanorak.co.uk, East London

Send message

Total Posts: 2895

Joined: 12 March 2013

As a general rule holiday pay is taken into account as income unless it is payable more than 4 weeks after the employment ends.  That’s what Reg 35(1)(d) says.

But there a couple of variables that might affect this.  It is vital to know:

- is the claimant working age?  (I assume yes)
- was she already on HB before she went sick?
- is she still employed (under contract and going back to work one day)?

If it does end up being taken into account as income, attribution to a period is a tricky one.  There is a recent UT decision which calls for earnings to be attributed prospectively ... but for how long in a case like this?  My suggestion would be for the same length of time as the untaken holiday to which it relates.  There are draft regs out for consultation which will reverse the effect of that UT decision and, if I have read them correctly, will attribute income paid wholly in arrears after the period in which it was earned to a period of corresponding duration ending on the day the income was paid.  So in this case, say she is owed three weeks’ holiday pay.  As the law stands I would use it as income for three weeks beginning on the day it is paid, but after the Regs are amended that would be three weeks ending on the day the money is paid.

Paul_Treloar_CPAG
forum member

Advice and Rights Team, Child Poverty Action Group

Send message

Total Posts: 550

Joined: 30 June 2014

Sorry, didn’t follow up all of the footnote references, as assumed from post that the gap was exceeding 4 weeks.

Isn’t it the case Peter, that as well as the regs quoted above, doesn’t para.1(c) of sch.4 HB Regs (sums to be disregarded in the calculation of earnings) allow for any holiday pay paid to someone who is not engaged in remunerative work but whose employment has not been terminated to also be disregarded, whether it’s paid within 4 weeks or not?

para.1(c) stipulates “In the case of a claimant who has been engaged in remunerative work as an employed earner, or had the employment been in Great Britain, would have been so engaged where before the first day of entitlement to housing benefit the employment has not been terminated, but the claimant was not engaged in remunerative work, any earnings paid or due to be paid in respect of that employment except any payment or remuneration of the nature described in paragraph 1(b)(i)  or (ii)(bb) or regulation n35(1)(i) or (ji)” - with the latter referring to variously, retainers, SSP, SMP, SAP, SPP, employers sick pay, etc.

Be interested to hear your thoughts.

HB Anorak
forum member

Benefits consultant/trainer - hbanorak.co.uk, East London

Send message

Total Posts: 2895

Joined: 12 March 2013

That’s why I wanted to know when she claimed HB: if it’s a new claim made since she went sick, para 1(c) of Schedule 4 allows a lot of earnings to be disregarded (including holiday pay).

Para 1(c) applies where she is not in “remunerative work” before her HB starts, but she is still in employment.  Reg 6 says you are not in remunerative work if you are off sick.

But if this is a change of circs in an existing HB claim, Sched 4.1(c) doesn’t apply and holiday pay can be counted as earnings

Paul_Treloar_CPAG
forum member

Advice and Rights Team, Child Poverty Action Group

Send message

Total Posts: 550

Joined: 30 June 2014

HB Anorak - 28 October 2014 09:46 AM

That’s why I wanted to know when she claimed HB: if it’s a new claim made since she went sick, para 1(c) of Schedule 4 allows a lot of earnings to be disregarded (including holiday pay).

Para 1(c) applies where she is not in “remunerative work” before her HB starts, but she is still in employment.  Reg 6 says you are not in remunerative work if you are off sick.

But if this is a change of circs in an existing HB claim, Sched 4.1(c) doesn’t apply and holiday pay can be counted as earnings

Ah, thanks for the clarification Peter, much appreciated.

eta: I’ve just seen that our handbook does indeed confirm this also, I was guilty again of not reading the whole section.

[ Edited: 28 Oct 2014 at 10:18 am by Paul_Treloar_CPAG ]
MLloyd
forum member

Leonard Cheshire Disability

Send message

Total Posts: 8

Joined: 28 August 2014

Hi guys, just followed up on this because had the client in, thanks for the info. It’s a new claim of HB from when she was off sick, which is good news in terms of the income details above.
Incidentally. I am aware of the proposed changes to the regs regarding the time for taking income into account, but I don’t know of the timescale they’re looking at here. Is it in one of the circulars? I’m having trouble tracking the draft regs down.