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Holiday Pay
Hi there Rightsnetters
Client has recently stopped work due to ill health.
Her payslip for the last month she worked has a payment in lieu for holiday that she had not taken (this was the January payslip so I’m not sure if this was sent to her because it was the beginning of a new annual leave year or because she had stopped working).
How should this payment be treated? Added in full as income for January or spread out across the year?
p.145 DRH 2016/17, if job ends before benefit claim made, holiday earnings are disregarded in general.
Or p.257/8 CPAG 2016/17 for more in-depth information,
Whoops, didn’t realise this was HB but same rules generally, i.e. treated as capital provided payment made after employment stopped. reg.46 HB regs.
Hi Paul, thanks for reply. Unfortunately client was already on HB as she was on low pay/not enough hrs to get WTCs/too much income for permitted work. Sorry should have been clearer about that. I was using the shelter book which suggests that if job ends when already on HB then lump sums need to be taken into account as part of change of circs. But I’m not sure of the period it should be applied for.
Reg.35(1)(d) states that for employed earners, any holiday pay is taken into account as earnings except any payable more than 4 weeks after the termination or interruption of employment. So presumably taken into account for appropriate number of weeks from when they are received.
If thel latter, then it’s back to reg.46(3) and its treated as capital.