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TOPIC: Impact of Termination of Employment Payment on CMS

Impact of Termination of Employment Payment on CMS 3 weeks 2 days ago #101777

  • Dexx
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Hi Guys, I am a new member and would be grateful for your advice.

After my divorce in 2018 because my wife was successful in her application to the court for spousal maintenance she applied for CMS for my 16 year old son. Hence from Oct 2018 to March 2019 I was paying her maintenance from my Permanent health insurance (PHI) payment which paid me an income whilst off due to long term mental healthillness after my statutory rights to employment sick pay had ended.

From April 2019 my PHI also ended and I was forced to claim universal credit in order to sustain paying rent, bills and to look after my 19 year old daughter who lived with me permanently.

I was eventually by my annual review in August 2019 able to reduce those payments to nil by way of benefits showing a reduction of income to less than £7 a week and having shared overnight care of my son for at least 51 days per annum.

Unfortunately, at end of September 2019 my employers terminated my employment and paid me my statutory three notice and accrued holiday as a lump sum. I have appealed my dismissal with assistance from my Union so this could be reversed and Payment in Lieu having to be repaid. Although I have received my P45.

So, my kept question is how to CMS treat such statutory final termination of employment payments and is this disregarded from any future assessment? Bearing in mind my annual review was just done in August 2019.

From what I have researched it seems only regular income is looked at by CMS and not savings unless it reaches a certain threshold? In any case this lump sum would soon be used up to pay towards settlement of over 20k outstanding debts to my divorce etc if I were to fail in my appeal.

This months UC statement has reported 'Take Home Pay' of the lump sum paid which has reduced this months benefits to zero. Something I will discuss with my work coach now I have just moved back with my parents and am therefore transitioning to a new Job centre.

Thanks in advance for your help to understand how such Termination of employment may affect my current status with CMS.

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Impact of Termination of Employment Payment on CMS 3 weeks 2 days ago #101782

hi,

i think as long as you made CMS aware that you lost your job and are on benfits, then you should be fine. if your last employer gave you something like 12 months severance pay, then that sounds like something CMS would be interested in. soon as you get a new job, just tell CMS about new job.

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Last Edit: by Bill337.

Impact of Termination of Employment Payment on CMS 3 weeks 2 days ago #101783

  • Dexx
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Hi BIL337,

This is just a one off statutory payment in lieu of 3 months notice period and accrued holiday whilst off sick.

This is not severance it is purely what I am legally entitled too due to forced termination due to capability and was not tax free for that reason either.

Okay, hopefully I can continue to be free off CMS payments until I get myself well enough to resume employment.

Thanks.

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Impact of Termination of Employment Payment on CMS 3 weeks 13 hours ago #101853

Possibly you will have to tell them. But as this is a one off, in 3 months time you can re asses as your income would of gone down 25%. I think you should talk to the HMRC about this as well, as it may affect your benefits, as they may see that you are working again.

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Impact of Termination of Employment Payment on CMS 3 weeks 13 hours ago #101855

  • actd
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If it's in lieu of pay, it effectively is salary so treated as such. Any way you can come to an agreement with them to pay it as a redundancy payment instead? That is tax free and not counted as income.

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Last Edit: by actd.
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