Treatment of Earnings

I have a client, on Guarantee Pension Credit,  who worked for one week in November 2010. 1st to 5th. It paid very well and she got the job done (paid to her on 20th November), and she received another week’s pay in lieu of notice (on 20th December).

The Pensions Service say that in accordance with Reg 17 (1) SPC Regs, that this must be treated as a month’s income because this is salary which is paid monthly by this employer. The notice pay is also treated as 1 month’s salary and therefore she has been asked for 2 months’ worth of PC back.

The overpayments’ decisions have been backwards and forwards for tweaking and the whole thing is taking ages to resolve but that’s another story.

Have I got any chance of arguing that she owes back 2 weeks’ of PC only?

I think reg 17(1) favours your client. Where the period in respect of which payment is made does not exceed a week, the whole of that payment shall be included in the claimant’s weekly income. There is no argument here that the period was in excess of a week, so the issue of how often the employer makes those payments isn’t relevant really. I am not sure why she gets a week in lieu of notice but again, if it was identifiably for a week,  I think you can argue it is payment for a week only.

The employer may be able to show that, had your client worked for a month, she would have received £x, i.e. pro rata a much higher sum. So, if your client got £500 for a week, and the employer would have paid £2166 for a month, it is clearly a payment in respect of a week rather than any longer period

Certainly worth an argument

Thanks, that was my first reading. My colleague had noted that it was because the salary was paid monthly, that there was a problem.