Arrears of earnings - capital or income?

I have a cl who has just discovered that she has been underpaid by her employer since 2008. She will receive 3-4k lump sum as redress for the underpayment. She is in receipt of HB. Will this lump sum be treated as capital or income. Legislation is clear for IS, JSA & ESA, where if a payment of income is made for an identifiable period then it is taken into account for a period of that length, but I can’t find anything similar relating to HB.

Thanks

It’s income for the period to which it relates, HB has the same definition of earnings.  That leads, unfortunately, to an overpayment, but as the client is in receipt of the lump sum, it shouldn’t be so difficult to repay - and if they have other capital, it would be worth repaying as a lump sum rather than risking the LA taking it into account as capital as well & double counting.

Yeah, as above. I can’t remember where it is but somewhere in the HB regs there is something about income to be treated as covering the period it relates to had it been paid timeously.

Hi,

Is this an equal pay settlement by any chance?

Thanks

Allan

Thanks for all your replies!

I was hoping it was an equal pay settlement but sadly it was just a cock-up.

I rather suspected that it would be taken as income but, as she doesn’t currently have any capital, I thought there might be some argument that it could be taken as capital and therefore not affect her HB. Just wishful thinking though…