Tax refund

camalapen7

Hi,

Was wondering if anyone could advise. I am currently on lcwra and pip. I just received a tax refund. What do I do in this situation?

poppy123456

A tax rebate is classed as earnings for UC so you will need to report this. It will affect your next UC payment. As you've been found to have LCWRA then you'll have the work allowance. 

If you claim for help with the rent your work allowance will be £379/month, if you don't it will be £631/month. Earnings of up to those amounts are ignored, anything over this will reduce your UC by 55%.

camalapen7

Thank you. I'm really bad at calculation, I claim housing benefits which is paid in full. I got a refund of £1256. Any ideas of the calculations? Will this effect my pip payment?

poppy123456

PIP won't be affected because it's not means tested. With a refund of £1,256 there's a disregard of £379 for the work allowance. This takes it to £877 x 0.55 for the deductions, which will be £482.35 deducted from your UC.

camalapen7

Thank you. Much appreciated. 

JamesHedley1976

Hi good afternoon and sorry to jump in to this topic but I have the same issue I got a tax refund from a payment I received last may 2022 it was my annual leave payment outstanding from my job I left in feb 2022 so I get a tax refund this year I have informed UC via the online messaging. I receive UC and the LCWRA so I’d imagine this month my payments will be affected my question is in the next assessment period I assume my payments will go back to normal ?as I don’t and can’t work due to mental health I have been receiving UC / LCWRA since last July As in they UC won’t assume I work and remove the LCWRA side of things ? I also receive PIP . 

poppy123456

JamesHedley1976 said:

Hi good afternoon and sorry to jump in to this topic but I have the same issue I got a tax refund from a payment I received last may 2022 it was my annual leave payment outstanding from my job I left in feb 2022 so I get a tax refund this year I have informed UC via the online messaging. I receive UC and the LCWRA so I’d imagine this month my payments will be affected my question is in the next assessment period I assume my payments will go back to normal ?as I don’t and can’t work due to mental health I have been receiving UC / LCWRA since last July As in they UC won’t assume I work and remove the LCWRA side of things ? I also receive PIP . 

The tax rebate is classed as earnings. You have the work allowance which means a certain amount of earnings will be ignored before any deductions apply. If you claim for help with the rent it will be £379/month, if you don't it £631/month. For anything over that amount your UC is reduced by 55%.

Whether surpus earnings apply will depend on how much the rebate was. https://www.entitledto.co.uk/help/universal_credit_surplus_earnings

JamesHedley1976

Hi and thanks for the reply . I don’t claim a housing element . My main question is once this period is over my payment date is the 17th of each month. So I’m just asking if next month my payments from UC will return to normal as in UC won’t assume I now work when I don’t . Thanks for your quick reply 

poppy123456

As i advised, it will depend on how much the tax rebate was. See link above regarding surplus earnings.

They won't assume you're working because there will be no earnings reported from an employer.

JamesHedley1976

Thanks poppy and the rebate was 1937.20 so I fully expect to have deductions this period . And yes that was my main concern about my next assessment period that they somehow may assume “ I’m now employed “ but if I was I suppose the real time check they run would tell them that and I would have informed them of my work . Thanks again