Payments in lieu of a holiday

I have a tenant who was working part time but claiming partial HB. She has just been made redundant with her employer and has to leave immediately. She does not qualify for redundancy package but she has 3 weeks holiday which she was due to take but now unable to do so. The employer will pay money to her in lieu of this holiday as she has to leave immediately, she has no choice. Will this money be classed as income/capital for HB/CTR purpose?

If she is already on HB, up to four weeks’ holiday pay is still treated as earnings.  If it was a new claim the money would be disregarded.  Seems a bit unfair but that is the effect of Schedule 4 and Reg 35 read together.  The Council will therefore treat her as if she is on holiday from work and being paid for the three weeks covered by the pay in lieu.