Client is a lone parent on IS including housing costs and CTB. She was unfairly dismissed from her job and looks likely to receive a negotiated settlement as a lump sum for 6 months loss of earnings, which would amount ot about £15000. She will have to sign a compromise agreement waiving the right to go to an Employment Tribunal. I have it in my mind that the payment would be treated for means tested benefit purposes as income spread over the time for which earnings have been lost, ie 6 months in this case. Is this correct?

The settlement may also include an amount for stress caused by sexual discrimination during the job. My understanding is that this element wouldbe treated as capital.

Just refreshing this query as no response so far. Any help would be greatly appreciated.

i've no idea, and would imagine anyone with a thought would have posted...

but i did wonder whether it would be possible to equate the harrassment damages to a pi claim damages and set up a trust.. probably not, but may be worth thinking about/consulting those who are advising her on the employment matter. see if there's a better breakdown of the sums - compensation/loss of earnings/

the compensatory part surely should be capital, not income?

generally speaking compensation payments are treated as earnings if paid other than at the termination of employment (when they are disregarded). I would have thought CPAG would have some commentary on this (I don't have a copy). Reg 93 of the JSA Regs deal with this. Some payemnts may be treaed as capital. The ruels are not identical with those for IS.

My reading of schedules 8, 9 and 10 of IS regs seems to indicate that it is simply capital, and cannot be disregarded. Because it is outwith any tribunal or other compensation award I think it would be treated as ex gratia. If it was a ET award I think I'm right in assuming that any benefit received would be offset in the final award.