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Forum Home  →  Discussion  →  Universal credit administration  →  Thread

Is unpaid statutory sick pay treated as notional income under Universal Credit regulations? 

Simon Dally
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Welfare benefits team - Manchester District Citizens Advice Bureau

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Total Posts: 13

Joined: 12 July 2011

Wondering if anyone can help with this.

My client is a director of his own limited company and is currently unable to work due to sickness. He is not eligible to claim NS ESA, as the company is expected to pay him statutory sick pay for up to 28 weeks.

Due to his circumstances, he will be eligible for UC whether or not the limited company pays him statutory sick pay, but he will receive more if SSP is not paid.

So my question is: if he does not pay himself statutory sick pay and claims UC, will the statutory sick pay be treated as notional income under s60 of the UC Regulations, on the basis that he has deprived himself of the income for the purpose of securing entitlement to UC?

Thanks, Simon

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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This is an interesting one. I would argue that as Reg 77 is expressed as applying “for the purposes of this Part”, that includes for the purposes of considering whether he has “deprived” himself of income under Reg 60, and means he has not done so.

Simon Dally
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Welfare benefits team - Manchester District Citizens Advice Bureau

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Total Posts: 13

Joined: 12 July 2011

Thanks for this, Charles.

I think the effect of s77 is that in cases such as this, where the claimant is a director of his own limited company, the company’s income is effectively treated as his own income. I’m not sure if this would mean that he has not deprived himself of notional income, as the company would still be expected to pay him statutory sick pay.

Anyway, I will advise him to claim UC in any event, and wait and see what they decide.

Thanks, Simon

Charles
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Accountant, Haffner Hoff Ltd, Manchester

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Total Posts: 1411

Joined: 27 February 2019

Yes, I realised the main purpose of Reg 77 is for the purpose you mention. My point however is that as Reg 77 is expressed as applying “for the purposes of this Part” it should also be used for deciding whether he has “deprived” himself of income. If you look at the company’s assets and income as his own, there cannot have been deprivation!

Simon Dally
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Welfare benefits team - Manchester District Citizens Advice Bureau

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Total Posts: 13

Joined: 12 July 2011

Thanks - it’s an interesting argument, and worth submitting in support of any MR request.

I will update you when the client gets a decision!

Simon