I’ll health retirement/medically retired

mable27

Hi I wondered if anyone can help please as I can’t get any clear answers online.

so on Tuesday I have an ill health meeting with my employer to discuss my package to leave. 

The lump sum is non taxable.
the Pilon payment and annual leave are taxable. 

After being taxed on the pilon and annual leave it will be about £6500. Will my uc be affected? I don’t know if this will be classed as capital or earnings or if just the taxable amounts will affect it. I’m just trying be organised incase I need to live off this for a while. The plan was to buy a car as I passed my driving test last year and haven’t been able to drive. Thanks 

durhamjaide2001

Good luck for your retirement 

mable27

By the way I’m not retiring I’m 38 lol it’s just what they call it. 

durhamjaide2001

mable27 said:

By the way I’m not retiring I’m 38 lol it’s just what they call it. 

Oh ok 

calcotti

The taxable amounts will count as earnings so will result in no UC for the month you receive it. There are some complex rules about 'surplus earnings' which mean that the following month is also likely to be nil and the month after that may be affected too depending on what your maximum entitlement is.

The non taxable amount will, I think, be treated as capital. It is not treated as income, see paragraph H3108
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1087474/admh3.pdf

mable27

Thank you so much for that 

L_Volunteer

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