Permitted Work / Accrued Holiday

bubsxo

Hello, 

This will be very very long winded as I'm writing everything that happened but any help is greatly appreciated.

I currently claim ESA / PIP and do permitted work which was previously allowed, and have been doing this since April 2022.

I have never gone over my 16 hours per week / 64 hours per month and earn the maximum amount of £152. My employers are very understanding of my situation and always ensure there is never any risk of me going over the limits regarding hours/pay as they know how this could affect my situation.

In December upon receiving my payslip I checked this as I do monthly (due to the anxiousness of going even one penny over!) and noticed a payment on my wage slip for 55 hours holiday, taking my pay from £608 to £1104.20. It turns out I have accrued holiday over the last year which to be honest I was completely unaware of (as I have been out of work for so long!) and as I am on a zero hour contract I wasn't even aware I was entitled to holiday? I've also been told that their company holiday year runs from January 1st - 31st December and they pay their staff any outstanding holiday at the end of the year as they have a large staff turnover due to the nature of their work.

I received my wage slip on the 13th of December, 2 days before our pay date and rang the DWP then to see how this would affect my claim, including council tax support and housing benefit. Despite my concerns my employers believed this would not affect anything at all, as it is a legal payment they have to make but ensured me they could put a stop to it, if it would affect anything.

After waiting on hold for over an hour and a half I spoke to a guy who was extremely friendly, I explained the situation and he advised me this in fact would not affect my claim at all, as this was clearly 'accrued holiday' and not hours worked, so would not be classed as earnings. I asked him to confirm this several times as I was extremely anxious and he said "you have not worked those hours". He said to get a copy of my wage slip just incase the DWP requested this due to the different amount compared to previous wage slips, and again said as long as it clearly stated annual leave that I would be okay. My employers then obviously went ahead with the payment on the 15th of December.

I received a letter last Friday the 26th that says I contacted them on the 22nd of December (9 days after I actually contacted them) to notify them that I had been paid extra on the 15th of December as I had received payment for untaken holiday. They have stopped my claim from the 15th of December to the 14th of January. The letter states that holiday pay is classed as earnings unless it is paid 4 weeks after employment ends, or when employment is interrupted, and as I am currently still working that I was found to not have limited capability for work during that period because earnings exceed, and that work does not fall into an exempt category.

Obviously being massively concerned and anxious I contacted the DWP and was again on hold for 2 hours. I explained the situation and what I was advised of previously, and the gentlemen I spoke to said this didn't seem very fair, that all calls are recorded so this would be accessible if required, but that I would need to speak to the decision makers as the decision had already been made, despite seeing details on the system of my call and what was said and me saying I had my payslip here expecting them to request this at some point. I obviously asked how do I go about paying that month of ESA back, totalling over £800, as the letter doesn't mention any of this at all, and also how would it affect my council tax and housing benefit? He said the best thing to do would be to speak to the decision maker and that they would give me a call.

She then rang on Monday and basically reiterated what was written in the letter before I even had a chance to speak. She quite simply just read the letter back as if I had never received it. I asked her why was I given the incorrect information in the first place, as I would of never gone ahead with accepting the holiday pay if the gentleman hadn't told me it was okay, how do I pay this payment back now, why am I expected to pay a whole months worth of ESA back totalling more than my overpayment initially, and what do I do about CT and HB? She said they would write to me detailing how they expect me to pay this back, and if it wasn't financially possible (which it won't be) to give them a ring - again probably expecting me to sit on hold for 2+ hours. She would not listen to the call where I was given the incorrect information, and quite frankly was very unhelpful. She just told me to write a mandatory reconsideration. I also asked why I'd seen on another forum that a lady was paid a whole years worth of accrued holiday in a lump sump, and after explaining this to the DWP her payments were not affected - I can appreciate they can only discuss information on a case by case basis so she couldn't give me any information, but I'm unsure how my situation is any different? She just told me to make a mandatory reconsideration.

Upon reading the letter again, it says if I think this decision is wrong to please get in touch with them by telephone or in writing within one month of the date of the letter. It says I can appeal against this decision, but I cannot appeal until they have looked at the decision again. I'm not sure if they've even done this? I know I have spoken to two people now, but the first said it was above him basically, and I needed to speak to the decision maker to see if she could overturn this decision, and when I did she simply told me the contents of the letter. At no point do I feel like they've actually looked at this decision again?

My employers are quite frankly baffled, as it is a requirement by law to pay me holiday pay, and they don't feel this is only available when employment ends. They have written me a letter to send in to the DWP but I don't know how helpful this would be. I have spoken to housing benefit who want me to email them explaining I plan to appeal this decision, and send them a copy of my payslips and bank statements but I'm still none the wiser to what I'm expected to pay back, or even how.

At this point, if holiday pay IS actually classed as earnings, I'm not expecting to get very far with regards to a mandatory reconsideration. If it is earnings, I will have to make arrangements with DWP / HB to pay this back, and that is fine. But I am querying why I was told the incorrect information in the first place leading me to accept the payment, why they're saying I contacted them 9 days after our original call, basically implying that I got paid this and perhaps spent it, before asking if it was allowed, when in fact I wouldn't of accepted the payment if I was given the CORRECT information, how they can justify that for that month I do not have limited capability for work because of hours I simply did not work, almost as if my health improved for those dates, and how unhelpful the lady was on the phone, not willing to listen or even look at the decision again as stated in the letter is required before I can appeal, and also the lack of information as to how/when I am expected to pay this back. Also I was pretty much unaware that for that entire month my housing benefit wasn't being paid so I am now in arrears obviously with the fear of homelessness.

I'm now extremely anxious that for the sake of a payment of £496.20 I now have to somehow find over £1400 to pay the DWP and HB.

Again I apologise for how long winded this is. Thank you if you made it thus far! If I get a standard response of holiday pay is classed as earnings, you'll have to pay it back, then that's fine, but does anyone have any information as to how to proceed then with being told the incorrect information in the first place, which will be recorded by them, and also how you're supposed to claim any holiday pay if it is indeed classed as earnings and you always do 64 hours? If my employers policy is to pay this at the end of the year by law, then how can they ever pay me this if it will stop my benefits?

Thank you for any information. 

calcotti

bubsxo said:

I have never gone over my 16 hours per week / 64 hours per month and earn the maximum amount of £152. 

To be permitted work you have to work less than 16 hours/week. Working 16 hours/week is not Permitted Work.

16 hours/week is £69 hours/month (there are more than 4 weeks in a month).

bubsxo said:

At this point, if holiday pay IS actually classed as earnings, 

DWP are correct. Holiday pay counts as earnings unless they are paid more than 4 weeks after work has ended. Here is DWP guidance.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1034571/dmgch49.pdf
See paragraph 49016 which states that holiday pay is included as earnings unless paid more than 4 weeks after employment was ended or interrupted. Under paragraph 49017 payment of holiday pay would also be ignored if paid while the employee is absent from work due to illness.
See also 49075.

bubsxo said:

…does anyone have any information as to how to proceed then with being told the incorrect information in the first place,

https://www.gov.uk/government/organisations/department-for-work-pensions/about/complaints-procedure

bubsxo said:

…, and also how you're supposed to claim any holiday pay if it is indeed classed as earnings and you always do 64 hours?. 

The way to avoid the situation is to take your holiday.

With regards your HB and CTR those will have been suspended as soon as your local authority became aware that income based ESA had stopped. It doesn’t necessarily mean that there was no entitlement to HB or CAtR for that month. Local authority will need details of your finances and will then have to calculate whether or not there was some entitlement and, if any, how much.

calcotti

Just had a thought - but it may be a stretch.

if  you have had 11 months paid at £608 and 1 month at £1104 if you add these together and average out over 52 weeks then your weekly income is £149/week which is below the earnings limit.

i think you should ask DWP to look at
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/541182/dmgch48.pdf
You could ask them to treat the holiday pay as attributable to an identifiable period of 12 months and that they should therefore average it out over that period. 

(Don’t do this without checking all of your payslips for the whole year and doing the averaging - you don’t want to find the average is higher than £152.)

bubsxo

Hi Calcotti, First of all thankyou for your help and apologies about the duplicate posts!

I tend to say 16 hours per week as a standard but I obviously don't do that every single week, the maximum I work is 64 hours per month so perhaps I could of been a little clearer on that.

I appreciate and can understand now after reading that this is classed as earnings, my main issue is obviously when I rang the DWP to check what affect this would have on my claim (as I wasnt aware at the time it was classed as earnings!) they stated it wasn't classed as that. Perhaps the advisor on the phone was misinformed, which isn't great in all honesty as that is why I went ahead with accepting the payment. I could of saved myself a lot of worry if they had given me the correct information to begin with, I obviously wouldn't of accepted the payment.

Would you advise even going ahead with a mandatory reconsideration at this point? I feel like I will have to pay this back regardless which is fine, but now I'm not sure if I should even go down the route of an appeal, as it would probably end with the same outcome, is this more of a complaint issue? I'm under the impression that I can do either or, and not both at the same time?

After reading your latest post, I have payslips from April through to January so not quite 12 months, they are definitely all paid at £608 other than Decembers obviously. Infact thinking about it there may have been one month, potentially July where I earnt slightly less than £608 as I was unwell with covid, so I do think that I would definitely fall within those limits if I averaged it out like you said. I will need to check that payslip. I will also need to read further into that link so thank you for that, would that be something to highlight in a reconsideration?

I will be contacting my local authority over the weekend, they told me they would base their decision on what the DWP said, rather than my finances like you said? Even though they have requested this information from me. 

poppy123456

When you ring ESA you're speaking to someone from a call centre. They are not benefits advisors and not someone from DWP. They have very little benefits knowledge and mostly read from a screen.

I wouldn't advise you in the future to ring them if you need advice like this, it's always better to get advice else where, like here or an advice agency so you know that what you've been advised in correct.

bubsxo

poppy123456 said:

When you ring ESA you're speaking to someone from a call centre. They are not benefits advisors and not someone from DWP. They have very little benefits knowledge and mostly read from a screen.

I wouldn't advise you in the future to ring them if you need advice like this, it's always better to get advice else where, like here or an advice agency so you know that what you've been advised in correct.

Hi Poppy, 

Thanks for that. To be honest I don't know why I didn't think to use this site in the first place as I have used it previously. I actually looked on another forum where someone in similar circumstances hadn't had their claim stopped and they advised they'd rang ESA which is why i did the same. When I rang them the guy said he thought this was the case but wasn't certain, so went to ask someone else. Stupidly I thought it was someone in the know, but it appears it was probably just another call handler!

calcotti

They will not average all 12 months. What they may be able to do is spread the holiday over 52 weeks. You then need to check that that doesn’t push earlier weeks over the earnings limit. 

Provided your payslip clearly states the amount is for accrued holiday pay and your employers letter confirms that it is for the calendar year you could ask for an MR on the grounds that the accrued holiday should be spread out over the year and taken into account solely in the month it was paid in. If treated in this way you understand that your weekly earnings will not have exceeded the PW earnings limit and therefore your ESA should have been suspended.

Don’t know if that will work but it’s the best I can think of.

As an aside, even if you had received different advice from DWP I’m not sure you could have refused the payment because your employer must pay holiday payment (but employment rules are not something I am knowledgeable about).

bubsxo

Calcotti,

I am just looking into this now to write up my appeal. I started my employment in April 2022 and up until the 31st of December have received 6 months at £608, 1 month at £570, and 1 month at £1104.20. July was £570 due to covid, and December was obviously £1104.20. My query is can they spread it over a 52 week period, if I was only employed from April? If not that would work out at around 39 weeks plus 1 day, which would take me to £152.70. I don't know if I'm making any sense but would the 52 weeks be January 2022-2023, or April 2022-April 2023 when I started. My company holiday year runs from 1st January to 31st December.

Edit - I've completed baffled myself. I now have my payslips infront of me. Those are from April 2022-January 2023. Total earnings to date are £5434.00. Total earnings to date including the accrued holiday are £5956.50. Would this be spread out over 52 weeks (Jan - Dec 22) or 39.1 (April to Dec) because if its the first one I'd be within the limits, however if they can't spread it out from Jan as I wasn't employed until April I'd be 73p over per week. 

calcotti

They can only spread it over a period it relates to. You will need something that makes it clear what period the payment relates.

You need to check the arithmetic for yourself to match the exact period it applies to. You obviously don’t want to ask to spread the payment if that would take you over the limit for the whole of your claim.

What date did you start work?

If the holiday pay is £496 is for 39 weeks that is £12.72/week.
£608/month is £140.31/week. Add the holiday pay would make the weekly amount £153.03 which would be over the earnings limit in which case you still it alone.

It looks as if you may have to accept the loss of ESA in December. 

bubsxo

I started work in April, im sure my first day was around the 7th but my employers helped me fill my permitted work form in so I cant be sure of the exact date they put down which now isnt handy! I have a feeling they may have put the 1st. All my april work is paid on the 15th of May, and the rest of the months follow. 

The wage they added the accrued holiday to is infact Novembers wage which was paid in December. 

My total pay April 1st through to the 30th of November which was when the accrued holiday was added is £4826 without the holiday and £5348.50 with the holiday. I then paid tax, and national insurance that month.

My total pay for the 2022 year April 1st - December 31st which was paid on the 15th of Jan is £5956.50. £5348.50 + £608

So im confused exactly what the period will be. April - Nov when the accrued holiday wad added? Or april to Dec when i recieved novembers payment. Or Apr - dec 31st thats obviously when the year ends. I hope that makes abit more sense. Sorry for any confusion. Ive honestly confused myself but greatly appreciate your help.  

bubsxo

This is another thing thats confusing me. My employers letter states their holiday period runs from 1st Jan - 31st of Dec and they pay any outstanding holiday at the end of the year, should that not have been added to Decembers pay then ready for January? As thats any work done up until the 31st of Dec. However theyve added it to Novembers so its paid BEFORE january. 

bubsxo

Apologies for the multiple posts. If i have to accept the loss thats fine. I will need to contact the housing to see how to proceed with paying this back and await further information from the dwp.

Can you just confirm i understand this right, for my own sanity more than anything! The period would be the 1st of April to the 30th November as thats the pay it got added on to?

So £4826 ÷ 34.5 (1st April - 30th Nov) = £139.88 

Accrued holiday - £522.50 ÷ 34.5 = £15.14

£139.88 + £15.14 = £155.02

Im assuming you work out the figures before tax national insurance etc i think id still be over, but i just want to understand ive worked that out correctly!

bubsxo

Ive explained this to my employer and they understand it now. Theyre saying they have the option for me to pay them back and theyll resubmit payroll which would mean although a long shot that my claim should technically be reinstated for that month. Do you think thats a possibility? Obviously £522.50 is alot less than id owe dwp, housing etc. I dont know whether thatd be a reconsideration though or more of a complaint that i was told the wrong information and that it wasnt earnings. If i was to suggest paying my employer back meaning i didnt get paid holiday would that still be an appeal? 

calcotti

bubsxo said:

This is another thing thats confusing me. My employers letter was states their holiday period runs from 1st Jan - 31st of Dec and they pay any outstanding holiday at the end of the year, should that not have been added to Decembers pay then ready for January? As thats any work done up until the 31st of Dec. However theyve added it to Novembers so its paid BEFORE january. 

That’s something you would need to discuss with your employer. It is crucial to know what period of time the payment is for,

bubsxo said:

..The period would be the 1st of April to the 30th November as thats the pay it got added on to?

So £4826 ÷ 34.5 (1st April - 30th Nov) = £139.88 

Accrued holiday - £522.50 ÷ 34.5 = £15.14

£139.88 + £15.14 = £155.02

As advised you need absolute clarity about what period the holiday pay is for.

I would expect them to average out the normal pay. You have a pay cycle and the weekly amount is calculated each month.

You need to look only at the accrued holiday amount and the period it covers. That will give you a weekly amount. You would then to calculate the weekly amount in each month and then add the weekly holiday amount to arrive at a weekly amount and see whether this is over the limit.

bubsxo said:

Ive explained this to my employer and they understand it now. Theyre saying they have the option for me to pay them back and theyll resubmit payroll which would mean although a long shot that my claim should technically be reinstated for that month. Do you think thats a possibility? Obviously £522.50 is alot less than id owe dwp, housing etc. I dont know whether thatd be a reconsideration though or more of a complaint that i was told the wrong information and that it wasnt earnings. If i was to suggest paying my employer back meaning i didnt get paid holiday would that still be an appeal? 

I don’t see how the employer can not pay you the holiday pay, it is a statutory entitlement. In any case it looks messy and uncertain so you could end up even worse off.

I don’t understand where the £522.50 comes from. I thought you said your pay went from £608 to £1104 which is an extra £496.

To the best of my knowledge the limit applies to net earnings (NI, income tax and half of pension contributions can be deducted).

This is all a long shot anyway. In reality DWP have a degree of discretion about how to calculate the weekly amount and so, even they are willing to do something, we can’t be certain how they would do. 

I have suggested that if logical to average the holiday pay and then add it to the ‘normal pay’ in each month. They might do as you have done and average everything or they might take the view that holiday was paid on the correct day and taken into account in that one month.

bubsxo

Sorry the £522.50 was before the tax and national insurance deductions that month as i was obviously over the amount. That brought it down to £496. 

Ive just clarified with them again that as everyone is on a zero hour contract they base their holiday on total hours worked at 12.07%. I did a total of 508 hours between april 1st and november 30th so they gave me 55 hours holiday pay. This confirms definitely that the period is april to november.

I am going to work it out monthly like you said but i am sure either way i will still be over the limit if only slightly.

At this point im so overwhelmed and stressed by everything i dont even have the energy to complain based on wrong information etc or even ask for it to be reinstated and ill pay my employer. Like you said it could make things messier and im just going to have to accept that it was an expensive lesson to learn... take your holiday! Dont ever let it add up. 

bubsxo

Calcotti,

Ive just worked it out correctly and out of 8 months id be within my limits for 4, so definitely not worth appealing. As of yet the housing is still showing as being paid and no overpayments so im going to put my wages to one side for the next couple of months and await to hear from them and the DWP about paying back the overpayments. 

Just wanted to say thank you again for all of your help. I would of been truly worse off without your advice! Its very appreciated.

calcotti

bubsxo said:

Calcotti,

Ive just worked it out correctly and out of 8 months id be within my limits for 4, so definitely not worth appealing. 

Can’t see how that works if you received the same monthly pay in six (£608) of the 8 months.

bubsxo

Apologies then i must have incorrectly worked it out again! 

Can you tell me how you got your figure of £608/month is £140.31/week?

I took £608 and divided it by the number of days in a month, then x that by 7 to get my weekly figure. Hence why i thought some months i was within my limits i.e 30 days vs 31 or the month where i was off sick with covid so my pay was £570. Obviously im not going to go ahead with anything now but itd be handy to know exactly in future. 

calcotti

bubsxo said:

Can you tell me how you got your figure of £608/month is £140.31/week?

monthly amount x 12 / 52

The calculation isn’t varied to match the number of days in the particular month.