Payment Protection Plans

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  • #22667
    Anonymous
    Guest

    Hello. After a bit of advice on a scenario I have never come across before…

    We have a claimant who is currently receiving incap as he is sick from work.

    However, he has paid into a kind of insurance policy which means that while he is sick and not receiving wages, the policy pays out to raise his income to normal levels.

    Anyone have any ideas on if these payments should be treated as income or capital, or if they should be wholly or partner disregarded???

    Thanks.

    #9071
    Anonymous
    Guest

    I would treat as income – if it was a loan or mortgage protection plan, different story but in this scenario – it is still income as regular and tied to a particular period.

    #9072
    Anonymous
    Guest

    This is covered quite extensively in the Guidance Manual:

    3.558 A claimant may take out an insurance policy to insure against the risk of being unable to

    * make mortgage payments on their home, for example because of illness or unemployment
    * repay loans, hire purchase or other credit agreements

    “HB Sch 4 Para 28
    CTB Sch 4 Para 29”

    3.559 Payments received from these insurance policies will be disregarded as income provided the policy was taken out to insure against the risk of being unable to maintain repayments

    * in respect of loans secured on the claimant’s home, and
    * under hire purchase or other credit agreements

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