[2024] UKUT 196 (AAC)

[Miss R] writes at length about perceived barriers to her making an appeal of the decision to deduct an assumed yield from her UC payments. I acknowledge these failings by DWP and accept her late appeal as it in the interests of natural justice to do so.

The crux of [Miss R]’s appeal is that she feels the residual capital from her award by the court should be disregarded for UC purposes as the capital is not taxable.

The court ordered [Miss R]'s previous employers to pay her, within 28 days of 17/04/2019, £6,411.60 for loss of employment, £14,142.50 for injury to feelings arising from alleged discrimination and £6,945.90 statutory redundancy payment. By the time she submitted her claim on 27/11/2020, [Miss R] reported that her capital had diminished to £10,700. It is unreasonable and likely impossible to detail how her capital amount is made up from the three separate awards.

Whether or not any of the awards are subject to tax is irrelevant for UC purposes. The key factor in determining whether any of the capital can be disregarded for UC capital purposes is whether or not it falls to be disregarded under Schedule 10 of UC Regulations 2013. The payment for loss of employment cannot be disregarded under Schedule 10 of UC Regulations 2013, nor can the redundancy payment. Regulation 75 of UC Regulations 2013 states that a personal injury payment received as a lump sum may only be disregarded if it is held in trust, administered by the court, paid in the last 12 months or has been used to purchase an annuity - none of these apply. As such, the entirety of [Miss R]’s capital amount at date of claim is to be considered for capital purposes and an assumed yield deduction of £4.35 applied for every complete and incomplete £250 of capital held over £6,000. Thus, an assumed yield deduction of £82.65 applies.

I would respectfully submit that the First-tier Tribunal dismiss [Miss R]’s appeal against the decision dated 27/12/2020, which decided that her capital is subject to an assumed yield of £82.65 per AP from 27/12/2020.