One off payment from employer ...

Hello all ...
If a person receives a one off payment from their employer should this be treated as income or capital for HB / CTB calculation purposes ?
CPAG pages 903 - 907 not too clear ...
LA has quoted regulations HB41 section (3) and stated the payment is income but I’m having my doubts because I can’t find this regulation anywhere ??

Any thoughts happily and greatfully accepted ...

Reg 41(3) is in the following terms:

“Any earnings to the extent that they are not a payment of income shall be
treated as income.”

So the question is, was it a payment of earnings or had the character of earnings?  Or was it some other payment?

You need more info from the client (and/or their employer) as to what the payment is relating to.  Without that it’s hard to say, but the likelihood is it will be treated as income for the period it relates to.

Is this an equal pay settlement payment?

Thank you for you replies ...

The payment was a one off because the employer could not afford to give the cl a pay rise for this financial year.

I’m assuming this means it should be treated as income ?

Thanks again ...

@Gad - I thought Equal Pay settlement too.

As it’s in lieu of a pay rise, it should be treated as earnings for the period it’s for, i.e. the whole of this financial year & the authority should include it as a single annual figure for e.g. April 2012-Mar 2013.  You may well find you need to be very explicit with the LA to get them to do this, it’s not a common situation, so they’re more likely to mess it up.  It’s only really the same as an annual bonus/profit share, but paid in advance rather than arrears.

There could be an interesting scenario if the client finished work during the financial year, as they’ve already received a payment for the whole financial year, which would still fall to be taken into account as income, with disregards etc.  Let’s hope they stay put.