I’ll health retirement/medically retired

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mable27
mable27 Online Community Member Posts: 6 Listener
edited January 2023 in Universal Credit (UC)
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 

Comments

  • durhamjaide2001
    durhamjaide2001 Scope Member Posts: 14,166 Championing
    Good luck for your retirement 
  • mable27
    mable27 Online Community Member Posts: 6 Listener
    By the way I’m not retiring I’m 38 lol it’s just what they call it. 
  • durhamjaide2001
    durhamjaide2001 Scope Member Posts: 14,166 Championing
    mable27 said:
    By the way I’m not retiring I’m 38 lol it’s just what they call it. 
    Oh ok 
  • calcotti
    calcotti Online Community Member Posts: 10,001 Championing
    edited January 2023
    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
    mable27 Online Community Member Posts: 6 Listener
    Thank you so much for that 
  • L_Volunteer
    L_Volunteer Community Volunteer Adviser, Scope Member Posts: 7,922 Championing
    Please don't hesitate to let us know if there's anything else we can do to support you @mable27. We are all here for you and listening to you  :)

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