Holiday pay on IRESA employed but not working

Hi

Client has been off sick for a long time but still employed. Gets IRESA and employer wants to pay holiday pay he has accrued.
Is this going to be income or capital?

Thanks in advance

I haven’t dealt with this scenario myself but from the information you have given it is likely to be capital as it would be more than 4 weeks since employment was interrupted.

Earnings of employed earners
80.—(1) Subject to paragraphs (2) and (3), “earnings” means, in the case of employment as an employed earner, any remuneration or profit derived from that employment and includes—

(a)any bonus or commission;
(b)any payment in lieu of remuneration except any periodic sum paid to a claimant on account of the termination of the claimant’s employment by reason of redundancy;
(c)any payment in lieu of notice;
(d)any holiday pay except any payable more than four weeks after the termination or interruption of employment;
(e)any payment by way of a retainer;
https://www.legislation.gov.uk/uksi/2013/379/regulation/80

Thanks UB40

I was looking at this too. Can’t see any kind of definition of what constitutes an interruption but being off sick would seem sensible.

HarlowAC - 12 May 2023 08:38 AM

Thanks UB40

I was looking at this too. Can’t see any kind of definition of what constitutes an interruption but being off sick would seem sensible.

I agree. I can’t see a definition in any of the ESA legislation but elsewhere (accoding to Social Security Legislation - Sweet & Maxwell) the phrase “interruption of employment” in other contexts such as JSA has always meant periods of incapacity for work as well as ordinary unemployment (eg s17(1)(c) Social Security Act 1975).

Perfect. Thanks Paul.