Can an earnings deduction for working a ‘month in hand’ be deducted for HB purposes?

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  • #39228
    adamlenton
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    I have a case where a customer is required to work a month in hand which would be repaid 30 days following end of month from the end of his employment.

    The customer had the option of not being paid for his first month’s salary or to have a quarter deducted over the next four months, with the customer selecting the latter.

    So for example, the customer will earn £1000 for the month, have £250 deducted and then the £750 will be used for PAYE and NI.

    At first we simply used the salary as the gross earnings, deducted PAYE/NI and did not consider the deduction for the month in hand. To which the customer has come back saying the earnings we are using is too high, and stated that they would have to give up the job if the assessment does not change.

    Is there a way for this to be disregarded? I hope I’m not sounding soft, but with all the talk of incentivising claimants to go back to work in the media (and especially at the IRRV conference last week), a part of me wants to disregard the amount, but another part of me says that this salary is tied to that period and should be used.

    Please help!!!

    #111374
    Anonymous
    Guest

    I think you’re correct – the date of the payment is not relevant, what matters is the period over which he earned the money. So whichever option he chose, you would still be using £1000 PM less tax/NI. Of course once he stops work, his HB/CTB will be adjusted immediately while he will continue to get paid for at least another month :glasses:

    #111376
    Anonymous
    Guest

    If he still qualifies for HB/CTB you could think about a DHP to help

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