Delayed holiday pay and UC
Under legacy benefits there was a provision that holiday pay received more than 4 weeks after termination or interruption of employment fell to be regarded as capital rather than income. Thus someone on ESA could draw down accrued holiday pay at a later date without reducing their ESA. For example:
DMG para 49076 Any holiday pay that is payable within four weeks of the date employment ended, or was interrupted, should be treated as earnings for ESA(I R). If it is payable more than four weeks after the employment has ended, or been interrupted, it should be treated as capital for E S A(I R).
Want to check whether I am right in thinking that there is no such provision under UC and therefore all holiday pay, whensoever paid, will be treated as earnings for the assessment period in which it is paid.
Yep, see p.109 CPAG 2018/19 under what counts as earnings, fourth bullet down - holiday pay.
Overleaf, under payments when you stop work, also notes that final earnings when you stop work are taken into account in the assessment period in which they are paid and that this includes accrued holiday pay.
That’s because they fall within the meaning of ‘general earnings’ as defined under sec.7(3) of the Income Tax (Earnings and Pensions) Act 2003 apparently. Reg.54(1) and Reg.55(2) of UC Regs apply.
Thanks Paul, that’s what I thought (even though not what I wanted to hear).