Dear GMB Member,

Please click here, or on the Framework for Consultation text above and you will see a document outlining an offer presented to the Joint Trades Unions, specifically for HCSWs and ICA members.

We do encourage you to review the content carefully.

In the coming week, GMB Union will be holding online Q&A sessions for HCSW members to discuss the offer and address questions you may have. Should GMB Union members prefer, we will be happy to arrange face to face meetings in Derriford Hospital.

If you are receiving Universal Credit (UC) or other means-tested* benefits, receiving a compensation payout could have significant implications for your entitlements.

* Means-tested refers to a method used by the UK government to determine whether an individual or household qualifies for certain benefits, support, or services based on their financial situation. Essentially, it means that the person’s income and sometimes their savings or other assets are assessed to decide if they are eligible for assistance. The idea is to ensure that help is provided to those who need it most, based on their financial need.

For example, benefits like Universal Credit and Housing Benefit are means-tested, meaning that your income, savings, and sometimes your partner’s financial situation are taken into account when deciding the level of support you receive.

Here are some key things to consider: Impact on Universal Credit:

Income Assessment: Universal Credit is calculated based on your earnings and savings. A compensation payment may be treated as “income” for the assessment period in which it is paid, which could reduce your UC payments for that period or potentially stop them altogether. Please note the advice of options advised by the employer as part of this proposal.

Savings Threshold: If the payment increases your savings above £6,000, your UC will be reduced. If your savings exceed £16,000, you will no longer be eligible for UC until your savings drop below this level.

Means-Tested Benefits:

Income Support and Housing Benefit: Any compensation may also affect other means-tested benefits you receive. For example, if you receive Housing Benefit, the payment could be treated as income and impact the amount you receive.

Council Tax Reduction: Your local council may also reassess your eligibility for any council tax reductions.

Treatment as Income vs. Capital:

Income: If the payment is considered income, it will likely reduce your benefits in the period when it’s paid.

Capital: If the compensation is considered a one-off payment and treated as capital (rather than regular income), it will only affect your benefits if it pushes your savings over the thresholds mentioned above.

Reporting Obligations:

You are required to report any change in your financial circumstances, including lump-sum payments, to the Department for Work and Pensions (DWP) to avoid overpayments and future penalties.

Disregarded Payments:

Some types of compensation, such as personal injury compensation or payments for specific legal reasons, can be disregarded in benefits assessments. However, most employment-related compensation is likely to be treated as either income or capital.

Steps to Take:

Seek Advice: Consult with a benefits advisor or a charity such as Citizens Advice or Turn2Us. They can help you understand the specific impact on your benefits.

Plan Ahead: Consider timing the payment or adjusting your budget to mitigate any potential loss of benefits. Note the proposal section 8.2

Contact DWP: It’s essential to clarify how the payment will be treated to ensure you’re following the correct procedures for reporting and compliance.

Being proactive will help minimise the disruption to your benefits and allow you to manage the compensation payment and the increase income wisely.

Thank you for your patience and ongoing support as we navigate this process together. Stay tuned for further updates.